There is an entire language of terms regarding payment issues. Please refer to the Quick Reference Guide to Acronyms (Appendix 10-A) for assistance. When therapy services are received, either the person pays the therapist directly or someone else pays the bill. Generally a patient will pay directly for therapy in three circumstances: (1) having a need for skilled services and not having insurance; (2) having had therapy interventions, understanding their value, and wishing to continue beyond what insurance is willing to cover; or (3) having a preference for a specific therapist who accepts only cash payment or who is not a preferred provider of the insurance company. When someone else pays the bill, it is the third-party payer that is billed for the services. Third-party payers are usually insurance carriers who, by contract or written agreement, may determine the maximum amount of money paid and under what circumstances.

Private health insurance is either purchased by a consumer or provided to people as a benefit of employment. People may have additional coverage by paying for it or as a result of being a dependent on someone else’s insurance plan. This secondary insurance may pay for the portion of the bill that is unpaid by the patient’s primary insurance. In the case of Medicare coverage, Medicare beneficiaries can purchase supplemental insurance that will pay some or all of the charges that are not part of their Medicare benefit. As the federal government is taking on a larger role in making sure individuals are insured by setting up a National Health Insurance System, the payer for the therapeutic services may change, but the fact remains that someone or a group of insurance carriers will pay for services rendered.

Health care services, for purposes of payment, are generally divided into three groups: inpatient, outpatient, and home health services. Inpatient services are delivered to patients staying in a hospital or health care facility. Outpatient services are delivered to patients who receive service by going to a health care provider. Home health agencies (HHAs) deliver services to patients in their own homes. Medicare services are processed and paid for by Medicare Administrative Contractors (MACs). MACs are responsible for administrating Medicare programs in 15 jurisdictions comprised of two or more states. MACs are private companies that have been awarded contracts by the Centers for Medicare and Medicaid Services (CMS) for processing all Part A and Part B claims within their geographical jurisdictions. MACs have the ability to accept or deny claims made to them for payment on the basis of their interpretations of the CMS guidelines. Medicare Parts A and B are discussed in more detail later in this chapter.

COBRA (from the Consolidated Omnibus Budget Reconciliation Act of 1985) refers to short-term interim insurance coverage. It allows people whose employment benefits have been terminated to have continuing employer-sponsored group health coverage temporarily. The American Recovery and Reinvestment Act of 2009 (ARRA) has expanded premium assistance to some people who qualify.

Workers’ compensation is coverage for people who have been injured on the job. These regulations are determined at both national and state levels. Workers’ compensation is discussed in greater detail later in this chapter.

Correct billing and claims processing are also dependent on accurately communicating treatment diagnoses and interventions to third-party payers. Three primary coding systems are used to communicate diagnoses and interventions in health care. The International Classification of Diseases, Ninth Revision, Clinical Modification (ICD-9-CM) is a tabular list of medical diagnoses approved for use by CMS based on the World Health Organization’s ICD-9, originally published in 1977. Current Procedural Terminology (CPT) (a registered trademark of the American Medical Association [AMA]) is a coding system that describes health care interventions. CMS has developed its own coding system to meet the specific requirements of the Medicare and Medicaid programs. The Healthcare Common Procedure Coding System uses CPT and alphanumerical codes developed by CMS in conjunction with the AMA to describe interventions, procedures, and supplies for the Medicare and Medicaid programs.¹ Use of these coding systems is discussed in greater detail later in this chapter.

Federal programs

Medicare and medicaid

“Medicare is a health insurance program for people age 65 or older, people under age 65 with certain disabilities, and people of all ages with end-stage renal disease . . . (permanent kidney failure requiring dialysis or a kidney transplant).”² The Medicaid program provides medical benefits to groups of low-income people, some of whom may have no medical insurance or inadequate medical insurance.³ Although the federal government establishes general guidelines for the program, the Medicaid program requirements are actually established by each state. Whether or not a person is eligible for Medicaid will depend on the state where he or she lives.

“President Truman was the first President to propose a national health insurance plan.”⁴ Congressional debate about federal health care coverage continued for 20 years. In 1965, HR 6675, the “Mills Bill,” was introduced. “Congressman Wilbur Mills, Chairman of the House Ways and Means Committee, created what was called the ‘three-layer cake’ by starting with President Johnson’s Medicare proposal (Part A), adding to it physician and other outpatient services (Part B), and creating Medicaid which significantly expanded federal support for health care services for poor elderly, disabled, and families with dependent children. Medicare became Title 18 of the Social Security Act and Medicaid became Title 19.”⁴ Although HR 6675 passed the House without a single amendment, the Senate version required much more discussion and many amendments. Finally, Medicare Part A, which involves basic hospital benefits and other institutional services for the elderly; Medicare Part B, a voluntary program; and Medicaid were approved by both the House and Senate.

Medicare and Medicaid implementation did not begin until 1966. Initially, “Medicare was the responsibility of the Social Security Administration (SSA), the agency that controlled the retirement social insurance program through which most people became eligible for Medicare. Federal assistance to the State Medicaid programs was administered by the Social and Rehabilitation Service (SRS). SRS oversaw welfare programs including Aid to Families with Dependent Children (AFDC), through which many people became eligible for Medicaid. SSA and SRS were agencies in the Department of Health, Education, and Welfare (HEW). In 1977, HEW Secretary Joseph Califano reorganized the department to create the Health Care Financing Administration (HCFA). HCFA was designed to improve administration of both Medicare and Medicaid by moving both health programs together, to improve the staffing of the Medicaid program, and to create a new administrative structure to implement national health insurance. In 1980, HEW was divided into the Department of Education and the Department of Health and Human Services (HHS). In 2001, Secretary Tommy G. Thompson renamed HCFA to become the Centers for Medicare and Medicaid Services (CMS) as part of his initiative to create a new culture of responsiveness in the agency.”⁴

“Coverage for Medicare Part A is automatic for people age 65 or older (and for certain disabled persons) who have insured status under Social Security or Railroad Retirement. Most people don’t pay a monthly premium for Part A. Coverage for Part A may be purchased by individuals who do not have insured status through the payment of monthly Part A premiums. Coverage for Part B also requires payment of monthly premiums. People with Medicare who have limited income and resources may get help paying for their out-of-pocket medical expenses from their state Medicaid program. There are various benefits available to ‘dual eligibles’ who are entitled to Medicare and are eligible for some type of Medicaid benefit. These benefits are sometimes also called Medicare Savings Programs (MSPs). For people who are eligible for full Medicaid coverage, the Medicaid program supplements Medicare coverage by providing services and supplies that are available under their state’s Medicaid program. Services that are covered by both programs will be paid first by Medicare and the difference by Medicaid, up to the state’s payment limit. Medicaid also covers additional services (e.g., nursing facility care beyond the 100-day limit covered by Medicare, prescription drugs, eyeglasses, and hearing aids). Limited Medicaid benefits are also available to pay out-of-pocket Medicare cost-sharing expenses for certain other Medicare beneficiaries. The Medicaid program will assume their Medicare payment liability if they qualify.”⁵

The Balanced Budget Act of 1997 (BBA) made the most significant changes to the Medicare and Medicaid programs since their implementation. One goal was to shift some of the financial stress to the private sector, which was accomplished by allowing Medicare beneficiaries options for additional types of health plans. The BBA also reduced hospital payments, which had considerable consequences in the health care industry. This was one reason that the Balanced Budget Refinement Act of 1999 (BBRA) was introduced. The BBA was also designed to address fraud, abuse, and waste in the federal health care programs.

The BBA also created the Children’s Health Insurance Program (CHIP), also known as Title XXI of the Social Security Act. “CMS administers this program, which helped states expand health care coverage to over 5 million of the nation’s uninsured children. The program was reauthorized on February 4, 2009, when President Obama signed into law the Children’s Health Insurance Program Reauthorization Act of 2009 (CHIPRA or Public Law 111-3). CHIPRA finances CHIP through fiscal year 2013. It will preserve coverage for the millions of children who rely on CHIP today and provides the resources for states to reach millions of additional uninsured children. CHIP is jointly financed by the federal and state governments and is administered by the states. Within broad federal guidelines, each state determines the design of its program, eligibility groups, benefit packages, payment levels for coverage, and administrative and operating procedures. CHIP provides a capped amount of funds to states on a matching basis. Federal payments under CHIP to states are based on state expenditures under approved plans effective on or after October 1, 1997.”⁶

At least two other federal laws affect children who may not have sufficient health care coverage. The Elementary and Secondary Education Act of 1965 (ESEA), reauthorized as the No Child Left Behind Act of 2001 (NCLB), is standards-based education reform that is directed at disadvantaged students. IDEA, the Individuals with Disabilities Education Act, provides for early intervention, special education, and related services to children with disabilities.⁷

The Patient Assessment Instrument is best known for having incorporated the Functional Independence Measure (FIM)¹⁴ along with function modifiers, quality indicators, and additional patient information. “The FIM instrument is a basic indicator of severity of disability . . . . The need for assistance (burden of care) translates to the time/energy that another person must expend to serve the dependent needs of the disabled individual so that the individual can achieve and maintain a certain quality of life. The FIM instrument is a measure of disability, not impairment. The FIM instrument is intended to measure what the person with the disability actually does, whatever the diagnosis or impairment, not what (s)he ought to be able to do, or might be able to do under different circumstances (p. III-1).”*¹⁵

Demographic, payer, medical, admission, and discharge information are included in the IRF-PAI. “The function modifiers assist in the scoring of related FIM items and provide explicit information as to how a FIM score has been determined.”¹⁵ These modifiers apply to bowel and bladder control, tub and shower transfers, and distances covered by walking or in a wheelchair. The FIM instrument specifically addresses the amount of assistance required for the functional activities of eating; grooming; bathing; upper body and lower body dressing; toileting; bladder and bowel management; bed, chair, and wheelchair transfers; toilet transfers; tub transfers; shower transfers; locomotion via walking or wheelchair; stairs; comprehension; expression; social interaction; problem solving, and memory. Each has its own algorithm to determine the FIM score. Quality indicators include respiratory status, pain, pressure ulcers, and safety (balance and falls).¹⁵

The FIM instrument has a total of seven levels of assistance. These are divided into two main categories, Independent—No Helper, and Dependent—Requires Helper. The two items in Independent—No Helper consist of Complete Independence—7 and Modified Independence—6. The highest score of 7 indicates that the patient completes the task safely, in a timely manner, and without any assistive devices. A score of 6 means that the patient requires a device or takes extra time or safety is an issue. The Dependent—Requires Helper category is further divided into two sections: the Modified Dependence—5, 4, and 3 scores, in which the patient provides 50% or more of the effort, and the Complete Dependence—2 and 1 scores, in which the patient’s effort is less than 50%. Supervision or setup, 5, denotes no physical contact with the patient; the patient requires coaxing or someone standing by, or a helper may need to set up the equipment. Minimal contact assistance, 4, includes touching; the patient is doing 75% or more of the activity. Moderate assistance, 3, indicates that more than touching is required, with the patient giving 50% to 74% effort. Maximal assistance, 2, has the patient supplying 25% to 49% of the effort. In Total assistance, 1, the patient performs less than 25% of the workload. There is a training manual available to assist the clinician in completing this form.¹⁵

Resident assessment instrument

In SNFs, the PPS is designed to cover the costs of providing care on a daily basis. This includes payment for ancillary services. The BBA required that the payments be adjusted for case mix. Case mix refers to the diversity of patients/residents on the basis of their complexity of medical problems or need for resources. This accounts for the increase in costs of complicated or involved cases. It ensures that facilities accept a variety of patients, rather than only those who require the least amount of services. In SNFs, a method of classifying each resident was developed to adjust the payments relative to the staff resources required to care for and to provide therapy to the residents. There is a higher cost associated with residents who require more resources or one-on-one care by staff. The facility should be reimbursed at a higher rate for these residents than for those who are more independent. Facilities are also reimbursed at a higher rate for residents who are receiving skilled services. All this information is acquired in the RAI, which is composed of three parts: the MDS, the Resident Assessment Protocols (RAPs), and the Utilization Guidelines. The RAI provides a structured method for the facility to create individualized care plans, to communicate on an internal and external basis, and to monitor quality performance. The MDS indicators are factored into the calculations for the Resource Utilization Groups, version III (RUG-III). RUG-III is the complex classification system used by CMS to determine the daily payment rate for the SNF PPS. RUG-III, in addition to many other categories, has a Rehabilitation category with five subcategories that describe the intensity of therapy received. The subcategories are determined by the number of minutes of therapy and the number of therapies each week.

The MDS is completed on a set schedule. After the initial 5-day, then 14-, 30-, 60-, and 90-day reports, the MDS is filed on a quarterly and annual basis. The MDS requires input from residents, their families, physicians, therapists, and dieticians. Facility staff from direct care, social services, activities, billing, and admissions is also consulted. The resident’s performance over the entire 24-hour day is reviewed and recorded to create an individual picture of strengths and needs. The MDS includes a complete review of the resident’s health, sensory systems, activity levels, behaviors, continence, activities of daily living (ADLs), physical and functional status, medications, procedures, and discharge plans. Although the MDS assesses activities similar to those of the FIM, the format is quite different. The Functional Status section is composed of Activities of Daily Living Assistance, Bathing, Balance during Transitions and Walking, Functional Limitations in Range of Motion, Mobility Devices, and Functional Rehabilitation Potential. The Activities of Daily Living Self-Performance subcategory of Activities of Daily Living Assistance includes bed mobility, transfers, walk in room, walk in corridor, locomotion on unit, locomotion off unit, dressing, eating, toilet use, and personal hygiene. The scoring system is based on an activity occurring three or more times. Use code 0 for Independent, no help or staff oversight; 1 for Supervision—oversight, encouragement, or cueing; 2 for Limited assistance if the resident is highly involved in the activity; 3 for Extensive assistance if the resident is involved in the activity and staff members provide weight-bearing support; and 4 for Total dependence if full staff performance is required every time. This section has a separate but related area to record the ADL Support Provided. In this case, the coding is 0 for no setup or physical help from staff; 1 for setup help only; 2 for one-person physical assistance; and 3 for physical assistance from two or more persons. The MDS has a training manual available to assist with completing the instrument.¹⁷

The RAPs are used to identify problems and to create individualized care plans. Certain responses from the RAPs initiate triggers, which identify potential or actual problems. From the triggers, areas of concern are further researched to determine complications and risk factors in addition to noting the need for referrals to appropriate health professionals. Utilization Guidelines are necessary to analyze the information gathered from the RAPs.

In response to providers, consumers, and others, CMS implemented the new and improved MDS Version 3.0 effective October 1, 2010. This redesigned version incorporated many significant changes. Based on a RAND/Harvard team effort, the MDS 3.0 is much easier to read and accomplishes several goals. These include improved resident input, improved accuracy and reliability, increased efficiency, and improved staff satisfaction and perception of clinical utility. A new development with MDS 3.0 is the addition of the Care Area Assessment (CAA) Process to assist with the interpretation of the information gathered from the MDS. As of October 2010, the RAI components are the MDS 3.0, the CAA process and the RAI utilization guidelines. An updated classification system, RUG-IV, was scheduled to be introduced at the same time as the MDS 3.0. However, while Section 10325 of the Affordable Care Act allowed CMS to implement the MDS 3.0 as scheduled, this same Section mandated a delay of the implementation of the RUG-IV classification system by one year. Portions of RUG-IV were implemented on an interim basis on October 1, 2010. The purpose of RUG-IV is to more accurately allocate payments. RUG-III bases payments on predicted therapy minutes from the MDS, causing inaccurate classifications and payments to SNFs in some instances. RUG-IV calculates the average daily number of therapy minutes based on the actual number of minutes provided to assign patients to Rehabilitation categories. The number of minutes of therapy received affects the reimbursement rate. This is why it is very important to correctly document the time spent treating the resident in addition to the resident’s functional status.¹⁸

Outcome and assessment information set

The home health PPS, introduced with the BBA, uses a similar system as do the acute-care facilities, IRFs, and SNFs. There is a standard base payment rate adjusted according to several variables, including geographical differences in wages, outliers, and the health condition and care needs of the patient. The latter, also referred to as the case mix, is determined by items in the Outcome and Assessment Information Set. On January 1, 2010, HHAs began using OASIS-C version 2.00 at the direction of CMS.

“The Outcome and Assessment Information Set (OASIS) is a group of data elements that represent core items of a comprehensive assessment for an adult home care patient and form the basis for measuring patient outcomes for purposes of outcome-based quality improvement. The OASIS is a key component of Medicare’s partnership with the home care industry to foster and monitor improved home health care outcomes. The goal was not to produce a comprehensive assessment instrument, but to provide a set of data items necessary for measuring patient outcomes and essential for assessment—which home health agencies (HHAs) in turn could augment as they judge necessary. Overall, the OASIS items have utility for outcome monitoring, clinical assessment, care planning, and other internal agency-level applications.”¹⁹

The OASIS includes sections on patient demographics, clinical record items, patient history and diagnoses, living arrangements, sensory status, integumentary status, respiratory status, cardiac status, elimination status, neuro/emotional/behavioral status, ADLs and instrumental activities of daily living (IADLs), medications, care management, and therapy need and POC. The ADL/IADL category is divided into grooming, upper body dressing, lower body dressing, bathing, toilet transferring, toileting hygiene, transferring, ambulation/locomotion, feeding or eating, ability to plan and prepare light meals, ability to use telephone, prior functioning ADL/IADL, and fall risk assessment. In the OASIS format, choices to describe patient function vary with the activity. Grooming, upper and lower body dressing, and toileting hygiene scales are 0 for independent; 1 for setup, no assistance; 2 if someone must help with the activity; and 3 if the patient is totally dependent. With bathing, the range is from 0, or independent, to 6, bathed totally by another person. For transfers, 0 is independent and 5 is bedfast, unable to move self. Ambulation/locomotion scores are from 0, able to independently walk on even and uneven surfaces, and negotiate stairs with or without railings and no device, to 6, bedfast, unable to ambulate or be up in a chair. Feeding or eating starts with 0 for able to independently feed self and extends to 5, unable to take in nutrients orally or by tube feeding. Ability to plan and prepare light meals (make cereal or sandwich or reheat delivered meals safely) ranges from 0 for independent or was able to but did not before this admission to 2 for unable. Ability to use telephone is 0 for able to dial numbers and answer calls appropriately and as desired to 5, totally unable to use the telephone. Prior functioning requests information about self-care, ambulation, transfer, and household tasks. Finally, the fall risk assessment asks if the patient is at risk for falls. A score of 0 means that no multifactor fall risk assessment was conducted, 1 indicates that the fall assessment was completed but does not indicate a risk for falls, and 2 indicates that the patient is at risk for falls. The care management section assesses the level of caregiver ability and willingness to provide assistance if needed in activities ranging from ADL assistance to patient advocacy. Note that although the OASIS is very precise, it also makes it difficult to measure progress. For example, in the ambulation category, a score of 4 indicates “chairfast, unable to ambulate but is able to wheel self independently”; 3 indicates “able to walk only with the supervision or assistance of another person at all times”; and 2 indicates “requires use of a two-handed device (e.g., walker or crutches) to walk alone on a level surface and/or requires human supervision or assistance to negotiate stairs or steps or uneven surfaces.”²⁰ This is another example of the importance of documentation to report significant improvement in therapy.

Documentation recommendations

Documentation is communication of the professional judgment used to establish a patient’s POC. Documentation should demonstrate the integration of the elements of patient management that determine the services that, in the professional opinion of the therapist, will provide the best possible outcome for the patient.

Medicare guidelines provide the minimum context standards required for adequate documentation. Satisfying minimum guidelines is not sufficient for the therapist who is thinking critically. This therapist should always be asking determinative questions (Box 10-1).

BOX 10-1 DETERMINATIVE QUESTIONS

Is there any therapy-related skilled service that this patient requires?

If yes, what is the unique professional contribution to this person’s rehabilitation?

Are therapy services medically reasonable and necessary and able to be correctly administered in a timely and beneficial way?

What are the therapy services and on what schedule will they be administered?

When the answer to whether therapy is necessary is “no,” document the reason why services will not be rendered. This will explain the therapist’s perspective. Generally this is an obvious decision because the therapist is unable to establish any goals.

When the answer is “yes,” the therapist must be able to answer the additional questions in Box 10-1. These important questions justify treatment and payment. The patient may have insurance or may be receiving federal, state, or county aid. Either way, the therapist must not forget that someone is responsible for paying the bill and that someone deserves a meaningful and beneficial product in return.

The American Physical Therapy Association (APTA) has published Guidelines: Physical Therapy Documentation of Patient/Client Management.²¹ These guidelines can be found on the APTA website (www.apta.org) under About Us—Policies and Bylaws—Board of Directors Positions and Policies, Section I—Practice. Although the general guidelines in Box 10-2 were written as part of an APTA document, they set a standard for therapists in the health care industry.

BOX 10-2 GENERAL GUIDELINES

Documentation is required for every visit or encounter.

All documentation must comply with the applicable jurisdictional and regulatory requirements.

All handwritten entries shall be made in ink and will include original signatures. Electronic entries are made with appropriate security and confidentiality provisions.

Charting errors should be corrected by drawing a single line through the error and initialing and dating the chart or through the appropriate mechanism for electronic documentation that clearly indicates that a change was made without deletion of the original record.

All documentation must include adequate identification of the patient/client and the physical therapist (PT) or physical therapist assistant (PTA) (or occupational therapist or occupational therapist assistant):

The patient’s/client’s full name and identification number, if applicable, must be included on all official documents.

All entries must be dated and authenticated with the provider’s full name and appropriate designation ^*:

Documentation of examination, evaluation, diagnosis, prognosis, plan of care, and discharge summary must be authenticated by the PT who provided the service.

Documentation of intervention in visit or encounter notes must be authenticated by the PT or PTA who provided the service.

Documentation by PT or PTA graduates or other PTs and PTAs pending receipt of an unrestricted license shall be authenticated by a licensed PT, or, when permissible by law, documentation by PTA graduates may be authenticated by a PTA.

Documentation by students in PT or PTA programs must be additionally authenticated by the PT, or, when permissible by law, documentation by PTA students may be authenticated by a PTA.

Documentation should include the referral mechanism by which physical therapy services are initiated. Examples include:

Self-referral or direct access

Request for consultation from another practitioner

Documentation should include indication of no shows and cancellations.²¹

^*OT or occupational therapist assistant should use the same documentation system and protocol. Space prohibited using all professionals’ initials.

In addition to following APTA’s Guidelines: Physical Therapy Documentation of Patient/Client Management, the medical record must follow requirements set forth by other agencies and regulating bodies. CMS sets minimum standards for documentation that are implemented on the local level by fiscal intermediaries or Medicare carriers, as appropriate. Fiscal intermediaries and Medicare carriers are responsible for acceptance or denial of claims made to them by the acknowledged provider of services. The standards pertaining to “reasonable and necessary” are available from individual fiscal intermediaries and Medicare carriers as local coverage determinations (LCDs).

The LCD standards and other helpful information are available through specific websites or through the Medicare Coverage page of the CMS website (www.cms.gov). Nongovernment third-party payers can follow guidelines of their own design. These may or may not be similar to Medicare guidelines. In general, when a therapist’s documentation meets Medicare requirements, it satisfies the expectations of other third-party payers as well.

There are other regulating organizations, such as The Joint Commission, licensing boards, or state departments of health services, that set documentation standards to protect consumers of health care services. It is important that therapists be aware of all documentation required by the regulatory agencies associated with their patients when documenting in the medical record. Because of the unique requirements of payers at the various state, county, and local levels, this section of the chapter primarily addresses CMS guidelines for inpatient facilities.

Medicare requires specific information with bills that are submitted for payment. Following these rules will facilitate reimbursement for services because any deviation may be used as a reason for denial of payment. Proper documentation is always necessary for the appeals process when a claim has been denied. Medicare billing must include the following, which are appropriate for both inpatient and outpatient settings.

The patient must be eligible for therapy services on the basis of an active written POC. The POC must be ordered or certified by a physician or by another licensed independent practitioner. Time periods for certification and requirements for return physician visits may vary. These requirements may be different in states with direct access to physical therapy.

In addition, therapy must be a reasonable and necessary treatment for the particular illness or injury. Reasonable and necessary allows a broad interpretation, which is why documentation becomes so important. The following are components that establish medical necessity:

1. Intervention, as related to the specific profession, is an accepted standard of care for this diagnosis. There are specific and effective interventions (evidence-based practice) successfully used to treat the condition.

2. The treatments require the skilled services of a professional. Knowledge and judgment are required because of the complexity of the problem and sophistication of the therapist’s unique body of knowledge.

3. Therapeutic intervention creates significant improvement, demonstrated by measurable gains in range of motion, strength, function, level of assistance, and so on.

4. The amount, frequency, and duration of treatment are reasonable. This is clarified by a POC with short- and long-term goals, predicted end of treatment, and reasonable potential to achieve the stated goals. Weekly reassessments or changes in the patient’s condition will require the plan to be modified as necessary.

Reasonable and necessary are key words for therapists to synthesize as part of the critical thinking process. Two examples are given to assist the reader to further analyze the meaning of these words.

CASE STUDY 10-1

A 60-year-old active, independent woman who falls and fractures her humerus may be, understandably, a little wobbly from the trauma, but she will not need therapy to achieve independent mobility. However, the situation changes completely when the same woman has an existing right hemiparesis, requires the use of a cane for balance, and then fractures her left humerus. Now therapy would be appropriate to address ADLs, safety, and gait to assist her in regaining her independence. Both physical and occupational therapists may be treating this patient, and each professional needs to be following similar processes for thorough documentation.

CASE STUDY 10-2

A patient who lives independently and is admitted to the hospital with a ruptured appendix would not usually require therapy services. The patient would need to spend time out of bed and to ambulate in the hallways to regain endurance, but this may be done with nursing staff or family. If the same patient had comorbidities such as multiple sclerosis or Parkinson disease that were exacerbated by the hospitalization, then therapy would be warranted. Therapy would establish a POC to address the issues that prevent a return to the prior level of function.

Recovery audit contractors

As part of the Medicare Modernization Act of 2003, Congress initiated a Recovery Audit Contractor (RAC) demonstration project to fight fraud, waste, and abuse in the Medicare system. “The demonstration resulted in over $900 million in overpayments being returned to the Medicare Trust Fund between 2005 and 2008 and nearly $38 million in underpayments returned to health care providers.”²² The RACs were so effective that Congressional legislation made them permanent in Section 302 of the Tax Relief and Health Care Act of 2006. This Act expanded the RAC program to cover all 50 states in January 1, 2010. These audits were designed with three purposes in mind: first, to protect Medicare beneficiaries; second, to protect taxpayer dollars used to make payments; and third, to ensure that claims were paid only for services that met Medicare requirements. The RAC teams, which are required to include nurses and therapists, are paid on a contingency fee basis in which the fee is returned if the provider wins at any level of appeal.

“The goal of the recovery audit program is to identify improper payments made on claims of health care services provided to Medicare beneficiaries. Improper payments may be overpayments or underpayments. Overpayments can occur when health care providers submit claims that do not meet Medicare’s coding or medical necessity policies. Underpayments can occur when health care providers submit claims for a simple procedure but the medical record reveals that a more complicated procedure was actually performed. Health care providers that might be reviewed include hospitals, physician practices, nursing homes, home health agencies, durable medical equipment suppliers and any other provider or supplier that bills Medicare Parts A and B.”²² Because a complex review requires the medical record, documenting comprehensible reasonable and necessary skilled services is critical.

Skilled services

People who have experienced trauma or a disease process that affects their ability to move or function would be readily labeled candidates for therapy services. Therapy intervention should be easy to justify. The challenge is twofold. The therapist must (1) be able to identify and then substantiate the need for skilled services and (2) be sure that the documentation allows other parties to follow and understand what has been provided. The following example of documentation compares two sentences that a reviewer might read: “Gait training to facilitate weight shifting onto the affected extremity with minimal assistance required for safety” versus “The patient ambulated down the hall.” The first sentence conveys the need for the unique and necessary skills of a PT. The second fails to even suggest the presence of a therapist. Avoid referring to skilled physical or occupational therapy, which then infers that unskilled therapy is also available. Unskilled therapy, for which a reviewer should deny payment for services, could easily be represented by “The patient ambulated down the hall.” Skilled services, on the other hand, reflect therapy provided by qualified therapists with clinical expertise and knowledge.

A list of the interventions provided does not demonstrate skilled care. A therapist must include the level and type of skilled assistance given, clinical decision making or problem solving involved, and continued analysis of patient progress. An explanation of why specific interventions are chosen and what makes them still necessary is also required. Documentation of the therapist’s observations of the patient’s movement and activity before, during, and after an intervention, the patient’s specific response to the intervention, and the relationship of progress to goals are additional examples of skilled service.

Duplication of services is also a concern when there is collaboration across the disciplines. Many patients will benefit from treatments in which both OTs and PTs are present. However, if both therapists document, “Sat patient at edge of bed to work on balance,” reviewers could easily question whether both therapists did the same thing at the same time. The reviewers might then have a problem approving payment for the care provided, with a possibility that both services would be denied payment. There are no questions of duplication when the medical record states that the PT treatment session included “instruction and demonstration of strategies for dynamic postural adjustments” and the OT treatment session was directed toward “ADL training with emphasis on dressing.” The same is true for speech pathologists, OTs, and/or PTs in a multidisciplinary approach. A treatment session may have one therapist facilitating head control and midline orientation, another addressing upper extremity function and coordination, and a therapist from a third discipline focusing on the ability to swallow. Be sure the documentation reflects the specific skills and knowledge related to each therapy.

Documentation: a legal document

The medical record is a legal document that is read by many people who are not therapists. Patients have much greater access to and interest in their medical records today than ever before. The medical record is available to insurance case managers and medical reviewers who are outside the medical facility. Patients may share their records with their families, new physicians and therapists, or even attorneys. Because of the various interests and needs of these diverse groups, it is necessary to be concise, legible, objective, and professional when documenting. Remember that no documentation can be released to others without a patient’s signed release of information form on file in the patient’s medical record.

Therapists should realize that it is very possible that their notes may be subpoenaed in the future as part of a lawsuit. The person who is the keeper of the records at the time of the case may have to go to court and explain, via another’s documentation, what was done for the patient, or it is possible that the therapist may be reading her own notes several years later while sitting in the witness box.

When documenting, be aware of the following important and sensitive areas. Remember that therapists receive a long and expensive education to enable them to write in the official legal record. Reviewers are basing their decision to pay for therapy on what has been recorded; be mindful of the need to meet criteria for skilled services. Patients and their entire medical team appreciate professional interventions and professional documentation.

Patient advocacy

The therapist is the patient’s advocate. As such, the therapist should champion the best care for the patient. This may mean consulting professionals in other disciplines or facilitating transfers to other facilities. It is the clinician’s responsibility to ensure that the record reflects the patient’s best interests. Do not let therapy notes hinder the patient’s forward progress in any way. Patients with neurological conditions may have deficits that affect their orientation, judgment, initiation, ability to respond or comprehend, or insight. They may have visual-perceptual or other sensory problems that affect their ability to participate in therapy. Their ability to process information may be delayed. None of these components are reasons to withhold treatment, but they may affect the time required to achieve appropriate goals. These patients can and will progress with a creative, patient, and knowledgeable therapist.

Timeliness

Whenever possible, document immediately after seeing the patient. This ensures that the session is recorded accurately. It is better to report the results of consultations, test results, or phone calls rather than writing that the therapist intends to take action. The latter leaves the reader wondering if anything happened until the relevant findings are included in the medical record.

Motivation

A therapist should believe that a patient is motivated to improve. Sometimes there is damage to the brain that affects initiation, insight, or judgment; sometimes there is depression, pain, or another medical reason. It is the therapist’s responsibility to find the key to unlock the patient’s ability to participate. Do not record that the patient is unmotivated. The lack of motivation usually belongs to the therapist. (See Chapter 5 for additional information.)

Personal opinion

The therapist’s documentation must be absolutely objective. The PT or OT may provide direct quotations or accurately record an event that happened during a therapy session to allow the reader to make his or her own judgment. It is very important to never let personal feelings about the patient enter the medical record. Bias and antagonism on the part of the therapist may leave the medical record open to speculation and become a problem if litigation occurs. If the reader of the documentation senses animosity, certainly the patient will too! The validity of the comments and the therapy provided become questionable. Always keep personal opinions out of official documentation.

Abbreviations

Be careful with abbreviations because the individual documenting may be the only one who understands what is being stated. Most facilities have an approved abbreviations list; use it! The meaning of what has been written will change according to the reader’s interpretation of the abbreviations used. It is possible that a reviewer will read the medical record and either find it incomprehensible or completely misunderstand the original intent. The purpose of documentation is to provide information. Claims may be denied because the reviewer does not understand the abbreviations used.

Pain

The Joint Commission has brought the patient’s pain level to the forefront, making a patient’s pain level the “fifth vital sign.” It is required that a comprehensive pain assessment appropriate for the patient’s age and condition be recorded at regular intervals. The most common pain scale is 0 to 10, with 0 signifying no pain and 10 signifying the worst pain the patient can imagine. To further explain the scale to the patient, the numbers 1 to 3 correspond to minimal pain, 4 to 7 to moderate pain, and 8 to 10 to severe pain. A score of 4 or higher requires immediate attention. It is important to explain to the patient that his or her pain scale response is accepted at face value and belongs only to the patient; the patient’s numbers are not compared with those of anyone else. For children ages 3 years and older, the Wong-Baker FACES Pain Rating Scale ²³ may be easier to understand. The purpose of a pain scale is to ascertain the effectiveness of pain medication or pain-reducing modalities. It is important to document the pain number at rest and during treatment, whether pain interferes with or prohibits participation in therapy, and what the therapist has done to remedy the painful situation. (See Chapters 5 and 32 for additional information.)

Reassessments

Reassessments are done on a weekly basis or sooner if short-term goals have been met or there has been a change in status. The reassessment should describe the patient’s situation and address the short-term goals, either explaining why the goals have not been met or setting new goals when the previous ones have been achieved. In addition to addressing the short-term goals, the reassessment provides the opportunity to clarify the treatment plan, treatment frequency, and duration of treatment.

Patient, family, and caregiver training

The education provided must be appropriate to the patient’s abilities. It is important to assess the learning style and barriers to learning, then adjust the teaching accordingly. The patient or caregivers must be able to understand the information. For example, documenting that the patient is blind and that he was given written handouts would be inappropriate, unless it was also documented that the family was trained with the materials provided. With any teaching, it is important to record what was taught, the response, and how well the new information was comprehended, either by return demonstration or by correct responses to questioning. Indicate whether the patient will be safe alone or with the specified caregivers after the training or whether additional education is necessary.

Patient rights

Patients have many rights, including the right to be treated with respect and dignity. Use terms that focus on the patient as a person; avoid labeling patients by their diagnosis. Informed consent, risks and benefits of treatment, and confidentiality are extremely important, both ethically and legally. Patients always have the right to refuse treatment. Therapy cannot be forced on individuals against their will. Therapists offer a service that medical and health care professionals know will be beneficial, but patients are responsible for paying for their health care and they must be given a choice.

Accountability

Whenever possible, include references to other health care team members in order to demonstrate an interdisciplinary approach to patient care. Perform a thorough review of the medical record. Information from other team members can aid therapists in their understanding of the patient’s situation. Inquire about the patient’s goals for therapy treatment to incorporate into the POC. Each case must be examined individually. No two cases should be assumed to have the same problems and the same plans for resolution. What appears to be a routine assessment may present subtle and intricate challenges to both the patient and the therapist. Be sure to take a critical look at what has already been entered into the medical record. Question any findings that do not make sense, especially if previous documentation does not correspond to all the information and clinical symptoms present. Take the initiative to solve problems and investigate inconsistencies. Patients depend on the skills and knowledge of their therapists. Therapists must be accountable for their own documentation.

Continuum of care

Acute care

Different settings require a change in the focus of documentation. It is important for the therapist to understand this concept and to modify documentation as necessary. In the acute-care setting, discharge planning begins as soon as the patient is admitted. The primary role of the therapist is to assess the patient to determine the next level of care and to introduce therapeutic interventions to expedite that process. Time is of the essence; the therapist may have only one or two visits to make a discharge recommendation and fewer than five visits to achieve initial short-term goals.

Depending on various circumstances, patients may transfer from the acute-care hospital to home either directly or indirectly by way of acute inpatient rehabilitation or an SNF. Although the primary goal is to return the patient home and continue therapy there or in an outpatient setting, some patients may never leave the SNF. The emphasis is on safety. The patient must be safe in her or his own environment. Caregivers, if necessary, must be capable of safely assisting the patient. It is important to realize that patients may not access every level of care, or they may require a combination of settings. In each location, the treatment techniques may vary and the short-term goals will be different, but the same documentation guidelines apply. The following paragraphs assume that the patient is initially admitted to an acute-care hospital and then describe the possible discharge options.

Subacute care

A patient who is admitted to the hospital and then requires the use of both a ventilator and a feeding tube may benefit from a subacute setting before moving on to acute inpatient rehabilitation. In the subacute setting, respiratory therapists and the nursing staff have key roles. Patients who have had respiratory failure in addition to their neurological deficits require a much slower pace to achieve their rehabilitation goals (see Chapter 3). These patients, with extremely impaired endurance and low functional levels, may stay in subacute settings for several months before they develop sufficient strength to progress to acute inpatient rehabilitation or return home. Short-term goals are set month to month, in contrast to acute-care hospitals, where short-term goals may be met in a matter of visits or days.

Acute inpatient rehabilitation

The Commission on Accreditation of Rehabilitation Facilities (CARF) monitors quality standards for acute inpatient rehabilitation care and is respected at an international level. Patients admitted to rehabilitation facilities accredited by this commission must meet several requirements. First, the patient must be medically stable and able to participate in at least 3 hours of therapy throughout the day. The overall medical stability must still require 24-hour nursing care and physician monitoring for medical diagnoses such as hypertension or diabetes. Second, the physical disability is such that the patient must need at least two of the three rehabilitation disciplines of speech, occupational, and physical therapy. Finally, the patient must have a community discharge plan. The discharge plan is imperative because acute inpatient rehabilitation is a dynamic process and patients will be discharged from this setting. A patient who was living alone before hospitalization but whose long-term goals do not include independence may not be eligible for acute inpatient rehabilitation care.

Skilled nursing facility

If the patient does not meet the requirements for acute inpatient rehabilitation or if the patient does not have financial, family, or other resources to enable him or her to live at home with assistance, then an SNF may be a better option. The patient benefits by receiving rehabilitation services and having a place to live. The facility is able to bill the third-party payer at a higher rate than for someone who is not receiving therapy services. The patient is allowed to receive therapy at a slower pace for a longer period of time. As the patient improves, acute inpatient rehabilitation may then be considered.

Home health

Patients who are discharged from hospitals and facilities may still require additional therapy. They may not have the ability or the endurance to travel to an outpatient setting and then also participate in the various therapies. In these cases, home health therapists provide the solution. To receive home therapy, a patient must be homebound. According to CMS, the definition of homebound is “Normally unable to leave home unassisted. To be homebound means that leaving home takes considerable and taxing effort. A person may leave home for medical treatment or short, infrequent absences for nonmedical reasons, such as a trip to the barber or to attend religious service. A need for adult day care doesn’t keep you from getting home health care.”²⁴ Documentation must explain why the patient is homebound. As the patient improves, this becomes more difficult and facilitates a decision for outpatient therapy or discontinuation of therapy services altogether.

Transitional living centers

Some communities are fortunate to have a transitional living center (TLC) available for clients to move beyond IRFs and into “real-world” situations. TLCs are community-based neurocognitive rehabilitation programs where the standard of care includes occupational, physical, and speech therapy; case management; and neuropsychology services. This treatment team pulls weekly documentation into a combined, goal-oriented individualized rehabilitation plan with summaries prepared for the payer source, physicians, family, and team. TLCs provide “custom-designed” life plans to facilitate reentry into home, school, or vocational settings. TLCs have been extremely successful as a way for older adolescents and young adults with neurological problems to progress from a rehabilitation center back into society.

Outpatient therapy

Patients who have progressed to a level where they can easily leave home usually prefer to travel to therapy departments or offices for treatment. Once in outpatient therapy, patients receive the fine-tuning necessary to maximize their potential function. Usually these patients benefit from a gradually decreasing frequency with an increasing emphasis on independent home programs. Although the guidelines for outpatient and inpatient documentation are the same, the payment systems for outpatient services are quite different and will be covered in detail later in this chapter.

Therapy and discharge planning

Therapists in hospitals have the tremendous responsibility of seeing patients just a few times and making recommendations that may affect the patients for the rest of their lives. These decisions are not made in a vacuum; other members of the health care team are involved and initial plans may be amended. Often, however, the team looks to the therapists to determine the best discharge plan.

When discharge options are considered, there are questions a therapist should ask as part of the critical-thinking process (Box 10-3).

BOX 10-3 CONSIDERING DISCHARGE OPTIONS

The questions a therapist should consider before making a discharge recommendation may include the following:

Is the patient capable of being successful at home, either alone or with selective assistance?

If selective assistance is still needed, is outpatient therapy appropriate or would home health care be a better choice?

Is the patient medically and physically stable enough to proceed to an acute inpatient rehabilitation facility?

Is the patient’s medical condition at a level that warrants a skilled nursing facility?

There are no simple answers to any of these questions, but the questions need to be asked to arrive at the best discharge plan for the patient. When trying to ascertain the best solution, the therapist should remember that cognition is a major concern, as is the length of time expected for the patient to meet the long-term goals. The wishes of the patient and the family must always be involved in the decision-making process because sometimes they do not agree with each other or with the therapist’s recommendations.

There are many aspects to consider. The patient’s prior level of function is essential information, followed closely by the situation at home. The medical and surgical histories are also pertinent factors. Contemplate the questions listed in Box 10-4.

BOX 10-4 POINTS TO PONDER ABOUT DISCHARGING A PATIENT

To home

Was the home environment safe before the patient entered the hospital?

Did the patient rely heavily on family, friends, or neighbors for assistance?

Does the patient have a history of falls? (Some patients know the paramedics by name.)

Are there stairs with rails or elevators available?

Are the rooms and halls wheelchair or walker accessible?

What kind of assistive equipment will need to be in the home?

Are there healthy and available family members willing to assist on a continuing basis?

Is there any money available to hire caregivers in the home, and will the patient consent to this?

Are there cultural factors in the family unit that may affect caregiving?

Does the patient need dialysis, and if so, how will this be accomplished?

How compliant will the patient be with an independent exercise program?

Will it be possible and easy for the patient to travel to an outpatient program?

To a retirement community

How far must the patient walk to reach the dining area, or can meals be delivered to the room?

Are assistive devices allowed in public areas of this community?

If not, what options have been provided or recommended by this community?

The therapist should consider the level of responsiveness, the ability to follow commands, the prior level of function, and the patient’s support system before making a recommendation. To further challenge the therapist, insurance coverage may affect the discharge plans. There will be cases where particular insurance carriers will contractually mandate the patient’s discharge disposition. In rare instances, patients must wait in an acute-care hospital until they become eligible for state or federal funding before moving on to the next level of care.

In situations such as multiple fractures with non–weight bearing on bilateral lower extremities, the patient only needs time to heal before being able to participate in a rehabilitation setting. Although the best-case scenario is for the patient to return home while recuperating, this is not always possible. The patient would then transfer to a facility for custodial care.

Another possible discharge option is that of a retirement housing community. This plan usually includes three levels of care: the independent living setting, assisted living, and a health center or SNF. People purchase a contract for a secure and predetermined health care future in the retirement community. The contract specifies receiving care at any and all of these levels. The members stay in independent living until they require medical intervention. They may slowly decline and move into assisted living for a few years before finally settling into the skilled nursing level of care, or they may have a medical emergency and be admitted to acute care. The hospital will then transfer them back to the community’s health center for rehabilitation. These patients may stay in the assisted living facility temporarily before returning to their independent living setting.

Be careful! The therapist may adversely affect a patient’s disposition on the basis of the POC. For example, a therapist in an acute-care hospital might routinely treat postoperative patients with orthopedic problems who elect to have surgery. These patients are expected to make major functional changes in just a few days. If a different patient arrives with a new subarachnoid hemorrhage and a maximum assist functional level, that same therapist may underestimate the amount of assistance and the duration of care that will be needed for this severely involved patient. The therapist’s short-term goals might project independent mobility within a 2-week time frame. If the therapist does not amend the POC, then the discharge planner, insurance case manager, and physicians may decide that the patient is not making any progress at all. The patient is judged to have little to no rehabilitation potential, when, in reality, the therapist’s POC was inappropriate. This kind of error could essentially end the patient’s chances for acute inpatient rehabilitation and affect the patient’s ultimate recovery level.

Less dramatic and possibly more common is the case of a patient who undergoes total hip arthroplasty for a hip fracture after an unwitnessed fall. The patient does not progress as quickly as the therapist would expect. The therapist must consider the possibility that this patient had a mild stroke and then fell and fractured the hip. The patient underwent workup for the obvious fracture, but the neurological symptoms went undetected by the orthopedic surgeon. Sometimes the patient’s subtle medical problems are realized only during evaluations that identify mismatches between the medical diagnosis and the anticipated functional skills and limitations. Open and clear lines of communication must be established between individuals working within the medical disease or pathology model and therapists working on impairments, activity limitations, and participation restrictions. The therapists have the opportunity to assist the patient and influence the discharge plan by advocating for a facility that offers both orthopedic and neurological rehabilitation.

The third-party payer also has a say in the disposition of the case. Occasionally the discharge choice of the insurer, on the basis of the case manager’s review of the medical records and the patient’s coverage, is not the therapist’s first choice for the patient. It may be possible to affect the decision regarding the patient’s future only if the therapist has been a strong patient advocate and has consistently documented appropriately and thoroughly.

CASE STUDY 10-3

The following case illustrates the interaction of therapy on the continuum of care and the various assessment instruments used in different settings.

Ysabella D. is a 66-year-old woman, independent and healthy, who has been diagnosed with atypical Guillain-Barré syndrome. She is admitted to the acute-care hospital, and subsequently respiratory failure, flaccid quadriplegia, and cardiac arrhythmias develop.

Over the course of 5 months in the acute-care hospital, with more than one visit to intensive care, Ysabella undergoes tracheostomy and receives a feeding tube and a pacemaker. In the meantime, she also acquires pneumonia, dysphagia, and a decubitus ulcer. Although Ysabella receives occupational, physical, and speech therapy while in the acute-care hospital, she remains dependent in all areas. Because of the presence of the tracheostomy and percutaneous endoscopic gastrostomy tubes, Ysabella is transferred to a subacute setting, where she stays for another 8 months. Here she gradually improves in strength, endurance, and function.

After her tracheostomy and feeding tubes are removed, her skin has healed, and she has progressed to a regular diet, Ysabella is strong enough to meet the criteria for an acute inpatient rehabilitation facility and she is transferred there. She stays in the short-term rehabilitation facility for another 6 weeks before she reaches a minimal-assist level of care. At this point, she and her very supportive family have been trained and she is able to be discharged home. Because she lives in a second-story apartment, is still using a wheelchair, and continues to require occupational and physical therapy, Ysabella is eligible for home health therapy.

Ysabella has Medicare Part A and B insurance coverage. This enables the acute-care hospital to be reimbursed on the basis of her diagnosis-related group. In this case, her long and complicated stay would qualify her for the outlier adjustment, allowing the hospital to receive more money than it would have received for a patient with an uncomplicated Guillain-Barré diagnosis. At the subacute facility, the initial Resident Assessment Instrument Minimum Data Set (MDS)is completed after 5 days. The MDS is again completed after 14 days, 30 days, 60 days, 90 days, and then quarterly until her transfer to the short-term inpatient rehabilitation setting. Here the Inpatient Rehabilitation Facility–Patient Assessment Instrument (IRF-PAI), including the Functional Independence Measure (FIM) score, is completed after 3 days and at the time of discharge. When Ysabella finally returns home, the home health therapist opens the case using the Outcome and Assessment Information Set (OASIS). Each facility will be reimbursed after the submission of the appropriate information gathered from each assessment and outcome instrument, assuming these tools were completed correctly and there was no reason for payment to be denied. Proper documentation by the therapists would justify all her therapy if there were to be an appeals process.

Medical and functional diagnosis and intervention coding: diagnosis coding

Payment for rehabilitation services is dependent not only on the quality of the medical record produced during the course of care but also on the accuracy of the codes used to describe medical and functional diagnoses and therapeutic interventions used in treatment. Third-party payers and other health care system stakeholders rely on the accuracy of coding so that the appropriate payment policy can be applied during the claims adjudication process. This section will introduce the reader to the basics of diagnosis coding using ICD-9 codes and intervention coding using CPT codes.

The ICD-9-CM, or ICD-9 for short, is based on the official version of the World Health Organization’s Ninth Revision of the International Classification of Diseases. ICD-9 classifies diagnosis, morbidity, and mortality information to allow systematic codification and standardized naming of diseases and injuries and allows indexing of data for outcome studies and for use in various payment, billing, and electronic information formats. Health care insurance companies and government agencies require the use of ICD-9 for billing and payment processes and for medical records as a result of HIPAA. To track outcomes, especially functional outcomes, standardized diagnosis nomenclature is absolutely essential. In rehabilitation settings the treating therapist is responsible for accurate identification of the physical therapy (treating) diagnosis and any comorbidities that could be factors during the course of care. Accurately identifying these diagnostic codes is an essential part of the advocacy role of the treating therapist because these coding decisions can have significant effects on third-party payer decisions for paying claims for patients and clients with potentially life-altering diseases and injuries.

Organization and characteristics of ICD-9-CM

ICD-9-CM is organized into two volumes. Volume 1 is the tabular list of ICD-9 codes and five appendices. Codes from Volume 1 are not usually used for medical and functional diagnoses involved with rehabilitation. Volume 2 is an alphabetical list of ICD-9 codes. This listing contains a large number of medical and functional diagnoses that incorporate most of the diagnostic terms currently in use. A group composed of the American Hospital Association, CMS, National Center for Health Statistics, and American Health Information Management Association regularly updates ICD-9 codes, resulting in annual editions that are updated throughout each calendar year. When ICD-9 resources are consulted, it is important to always be sure that the most current edition is used.

ICD-9 codes can be up to five digits long: at least three digits are to the left of the decimal and up to two digits to the right of the decimal. The three digits to the left of the decimal define the diagnosis category, and the two available digits to the right of the decimal define more specific characteristics of the diagnosis by further defining site and location. We will look at several examples to illustrate the coding process (Box 10-5).

BOX 10-5 ICD-9 CODING EXAMPLES

Following are two examples of common neurological conditions. You will need an ICD-9-CM book to do this exercise.

The name of the condition is the best place to begin. For example, code the diagnosis complete paraplegia.

Go to Volume 2 (alphabetical index) and look up “Paraplegia, complete.”

Review the listings under 344 of Volume 2 under “Paraplegia.” There is no listing that matches the term “complete.”

Go to “344.1 Paraplegia” in Volume 1 (tabular index). The main entry is “344 Quadriplegia and Paraplegia.”

Read the entries under 344 and find “344.1 Paraplegia.” Note what conditions are included and excluded by the listed codes. Read the note under “344.1 Paraplegia” that says “paralysis of both limbs.” This represents the closest match to “complete paraplegia.”

“344.1 Paraplegia” is the diagnostic code.

Coding nonspecific encephalopathy:

Go to Volume 2 (alphabetical index) and look up “Encephalopathy.”

Review the listings under “Encephalopathy.” There is no listing that matches the term “nonspecific.”

Go to Volume 1 (tabular index) and look up “348.30 Encephalopathy.”

Read the notes and descriptions under “348.3 Encephalopathy.” Note what conditions are included and excluded by the listed codes.

“348.30 Encephalopathy, unspecified” matches nonspecific encephalopathy most closely.

“348.30 Encephalopathy, unspecified” is the diagnostic code.

Two terms need to be kept in mind when using ICD-9 codes. The first is Not Elsewhere Classified (NEC). This term is used when the ICD-9-CM does not provide a code that may be as specific as the diagnosis the therapist is trying to code, or when the clinician may not have enough information to code to a more specific diagnosis requiring the fourth-digit subcategory. The second term is Not Otherwise Specified (NOS). This term is used when the diagnosis is unspecified. Again, the reader will have an opportunity to look at examples of both abbreviations for illustration purposes.

Assigning ICD-9-CM codes

In most cases the therapist will start with the name of a medical or functional diagnosis and will have to convert that name to the numerical ICD-9 code. In rare cases the opposite occurs; a diagnostic code is provided and the code will need to be converted to a name. For the purposes of this discussion it is assumed that a codebook is being used; however, readers will find that many software and Internet applications embed ICD-9 information within the application. When using embedded resources, it is important that the reader refer to the text included in the codebook because most of these applications use the “short language” form of the code and do not tell you whether fourth- or fifth-digit modification is required.

ICD-9 coding is a five-step process

The following five-step process will guide the reader through the ICD-9 coding process:

Step 1: Start by consulting the alphabetical index (Volume 2) to identify the diagnostic category before using the tabular index (Volume 1). By identifying the correct name of the diagnostic category in the alphabetical index, therapists will avoid coding errors that will result in denied services.

Step 2: Identify the main medical or functional diagnostic term or category. The alphabetical index is arranged by condition. Conditions can be expressed as nouns, adjectives, and eponyms. Some conditions have multiple entries under their synonyms. Be sure to read any notes listed with the main term or category because these categories will help the reader identify the specific diagnostic code he or she is trying to identify.

Step 3: Interpret abbreviations, cross-references, and brackets. Cross-references used are “see,” “see category,” and “see also.” The abbreviations NEC and NOS follow main terms or subterms. Identify a tentative code and locate it in the tabular index.

Step 4: By reading the entry in the tabular list, clinicians will be able to determine whether the code is at its highest level of specificity. Assign three-digit codes (category code) if there are no four-digit codes within the code category. Assign four-digit codes (subcategory codes) if there are no five-digit codes for that category. Assign five-digit codes (fifth-digit subclassification codes) for these categories where they are available.

Step 5: Assign the code.²⁵

Box 10-5 provides two ICD-9 coding examples.

Depending on the treatment setting, patients/clients may come to the therapist with diagnoses that are already coded. In other situations, such as in acute-care facilities and IRFs, ICD-9 codes will be assigned by certified ICD-9 coders in the medical records department. In many outpatient settings the therapist will be required to “match” ICD-9 codes for Medicare patients with specific CPT codes to establish medical necessity for the rehabilitation interventions according to the Fiscal Intermediary or Carrier Local Coverage Decisions. In any case, the treating therapist should be absolutely clear in the medical record about the treating diagnoses and comorbidities that define the treatment program and POC of the patient or client.

The future of diagnosis coding: ICD-10-CM

In 2013, changes in HIPAA regulations will replace ICD-9-CM with an updated diagnostic coding set: ICD-10-CM. This updated system will enhance accurate payment for services and facilitate evaluation and tracking of medical diagnoses and outcomes. ICD-10-CM will provide improvements through more detailed diagnostic information and increased specificity of location and pathologies and will have expanded ability to capture additional advancements in identification of pathology, diagnoses, and patient problems.

The ICD-10-CM classification system has been used in other countries since the mid-1990s; it has been adapted by the Centers for Disease Control and Prevention for use in the United States. The diagnostic coding under this system uses three to seven alphabetical and numerical characters and full code titles for each entry. Organization and format are very similar to those of ICD-9-CM.

Because of the impact this change will have on electronic data interchange and computer systems, the transitional plan for this significant change is already underway. Therapists and other health care providers should be aware of this impending change and participate in training opportunities as they become available.

Intervention coding

Just as ICD-9 codes allow therapists to communicate to payers and other health care stakeholders the conditions and injuries being treated, CPT codes allow therapists to identify and communicate the interventions being used in the course of patient care. In a world where most billing information is transmitted electronically, it is essential for therapists to use the most appropriate CPT codes to communicate the breadth, depth, and complexity of the treatment plans required in the care of patients/clients. Appropriate intervention coding is also essential to the billing and claims adjudication process and to maximize the health care benefits available to the patient with complex neurological conditions and injuries.

Current procedural terminology

Current Procedural Terminology,²⁶ Fourth Edition, is maintained, updated, and published by the AMA and is a registered trademark of the AMA. It is a code set designed to identify the interventions and other services performed by health care providers. Each intervention or service is described by a five-digit code. CPT is mandated by HIPAA as the appropriate code set for use in health care transactions in the United States.

CPT is used to report health care provider services to public and private or commercial insurance companies and payers. CPT codes are also used to report treatment encounter information to government agencies and private companies for the purposes of research, outcome tracking, and education.

The AMA first published the fourth edition of CPT in 1977. CPT is continually updated to keep the codes current with the community standard of practice by a process led by the AMA CPT Editorial Panel.²⁶ For the rehabilitation disciplines, the Health Care Professional Advisory Committee develops CPT coding changes and updates. The Committee consists of representatives from 16 nonphysician provider groups, including physical therapy, occupational therapy, and speech and language pathology.

The CPT code set is organized into six major sections: Evaluation and Management, Anesthesiology, Surgery, Radiology, Pathology/Laboratory, and Medicine. Each section is divided into subsections based on anatomical, procedural, condition, and descriptor headings as appropriate to that specialty section. The AMA, in publishing the CPT code set, recognizes that there may be significant overlap in the interventions, procedures, and services performed by health care providers and makes the following statement in the introduction:

It is important to recognize that the listing of a service or procedure and its code number in a specific of this book does not restrict its use to a specific specialty group. Any procedure or service in any section of this book may be used to designate the services rendered by any qualified physician or other qualified health care professional.²⁶

Typically, most codes used by rehabilitation professionals to describe treatment of neurological conditions are in the 97000 series of the CPT; however, any code that adequately represents the interventions or services performed by a provider with the appropriate qualifications may be used.

Using the CPT codes

Selecting the correct CPT code that most adequately describes the intervention performed is often very challenging because most therapists have not had formal CPT training. Although in-depth coding training is beyond the scope of this text, this section will help the reader develop some basic skills in applying sound coding techniques to practice.

Most of the codes used to describe therapy interventions are found in the Physical Medicine section of the CPT code. Although therapists use these codes, so do a large number of other health care professionals and providers. For this reason it is important for therapists to be able to adequately describe their use of interventions using the correct CPT codes so the codes reflect the complex nature of the treatment plans implemented with their patients.

Physical medicine CPT codes

The Physical Medicine codes are located in a subsection of the Medicine section of the CPT code set. Some CPT codes in the Physical Medicine section represent interventions that occur in specified time intervals (e.g., 15 minutes) and are considered “timed” codes. Timed codes generally require constant attendance or direct (one-on-one) patient contact. Other codes are considered “occurrence” codes and do not have a time period associated with them. Some occurrence codes require direct contact, whereas others do not. Occurrence codes are billed only one time during a visit or treatment, but timed codes can be billed in multiple units as justified by the time it takes to provide the intervention. Consult a current CPT codebook for specific details, because these codes and their associated descriptions can change each year.

The Physical Medicine codes are organized into six groups of codes. The codes in these subsections have specific attributes.²⁶

Each year therapists should review the codes and sections commonly used for changes and additions that will better describe the interventions performed with their patients. All therapists should consult the CPT codes directly and avail themselves of training specifically designed to help them accurately describe their interventions. CPT coding resources are available from a number of sources, including the AMA and professional associations such as APTA.²⁷

Outpatient payment policy

The processes involved with billing, payment, and payment policy for outpatient services remains distinctly different compared with inpatient services. Although inpatient rehabilitation services are primarily paid on a prospective basis, outpatient rehabilitation services continue to be paid primarily on a retrospective basis. This means that, although services may have been authorized before delivery of care, the decision to pay for the services is made after care has been delivered and subject to reviews of medical necessity, appropriateness, and other policies. Financial class largely determines the types of policies and regulations that apply to any particular payer. There are four primary financial classes: Medicare, Medicaid, and government programs; commercial insurance and private coverage; automobile and accident insurance companies; and workers’ compensation. To be effective advocates for patient care, therapists must be vigilant regarding regulations and payment policies that determine how care is approved, billed, and paid.

Medicare and medicaid

Both the Medicare and Medicaid programs are overseen and regulated by CMS. Medicare, as a federal program, is heavily regulated. These regulations are readily available to providers through a number of resources, but the primary access to information is through the Internet at http://cms.gov. As previously discussed, Medicare pays for outpatient services through MACs. Each of these entities must maintain a website for beneficiaries and providers to allow for ready dissemination of pertinent information. MACs use Medicare’s national policies to process and adjudicate claims. Although Medicare has national policies, MACs have some discretion in how these policies are implemented locally. Any MAC regulations or policies specific to particular services, interventions, or provider types are contained in LCDs that must go through a lengthy draft and approval process before they are made available to providers and implemented. Most MACs have LCDs specific to physical rehabilitation providers (physical therapy, occupational therapy, and speech and language pathology) as well as specific services or interventions such as wound care, biofeedback for incontinence, vestibular problems, and cardiac rehabilitation. Because MACs have defined geographic coverage areas, it is advisable for therapists to be sure they are familiar with Medicare’s payment policies in the areas where they practice.

Medicaid, as discussed earlier, is a health program for the economically disadvantaged. Although it is partially funded with federal dollars, it is also funded at the state level. Because Medicaid is implemented at the state level, states have significant leeway in how their programs operate, approve care, and pay for services. Consequently there are large variations in the Medicaid program from state to state. Therapists should be aware within their individual work settings of the regulations and policies that may apply to them as a result of their employer’s possible participation in the Medicaid program.

Medicare and other payers often attempt to mitigate their financial risk for costly episodes of rehabilitation by imposing arbitrary limits on care. These limits are often referred to as “caps.” One example of such a limit is Medicare yearly cap on rehabilitation services. This cap was created as part of the BBA and went into effect in 1999. The cap was $1500 in payments per year for physical therapy and speech therapy and a separate $1500 cap for occupational therapy services. The cap applies in all outpatient settings except outpatient hospital rehabilitation units. The therapy cap is adjusted annually as a consequence of changes in the Medicare Economic Index that tracks health care costs and inflation.

Another way Medicare and Medicaid attempt to mitigate their financial risk is to use outpatient service programs that are prospectively paid. These programs operate by use of capitation, a system by which health care providers are paid in advance of rendering care to a defined group of beneficiaries. In this payment system the capitated health care providers provide care out of the prepaid pool of funds. These programs use contracted insurance companies, using large groups of health care providers representing a wide array of specialties, to provide the anticipated health care needs of the covered patients. Capitation agreements must be carefully negotiated. If the negotiated prospective payment is too low, or, if the therapist overtreats, the payment for services rendered will be inadequate to cover the cost of providing care to the covered patient population.

A number of smaller government programs also may have specific regulations and policies similar to those of Medicare. An example of such programs is CHAMPUS/TRICARE. This program provides health care insurance coverage for members of the military and their dependents and for military retirees. Other federal health care programs, such as the Veterans Administration, may vary significantly from Medicare and Medicaid in their policies.

Coverage programs for children with congenital or acquired conditions requiring extensive rehabilitation are financed through a number of federal, state, and local programs. Because of the huge diversity in the payment policies related to these programs, therapists should be aware of the particular program covering the care and should work closely with parents and agencies involved to ensure that proper coverage for services is achieved.