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Top 10 Medicare Compliance Strategies for Outpatient Therapy Providers

From POC establishment to proper ABN use, here are a veteran PT's top picks for must-know Medicare compliance facts. Learn more here.

Katerina Liapis
5 min read
November 15, 2017
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These days, almost everyone who works in the outpatient therapy setting has treated a patient with Medicare benefits. We have all encountered the daunting list of rules and regulations we must be follow so that:

From G-codes to POCs and FOMs to LTGs, it’s enough to make anyone’s head spin!

With that in mind, here’s a top-10 list of helpful tips for successfully navigating this complex system:

1. Get familiar with Medicare Part B regulations.

Medicare Part B is the component of Medicare that allows for the delivery of outpatient services. The general guidelines associated with billing for these services (including physical therapy, occupational therapy, and speech-language pathology) include establishing the plan of care (POC), certifying the plan of care by obtaining the signature of the referring physician or qualified NPP (non-physician practitioner), submitting progress notes at specified intervals, recertifying the POC after the expiration date if services are to be continued, including measurable short- and long-term functional goals, and completing functional limitation reporting (a.k.a. G-code reporting).

2. Establish your certification period.

You will establish your initial certification period after you conduct your evaluation. At this time, you’ll decide on the duration (number of weeks or treatment sessions) and frequency (number of times per week that treatment should occur). While the maximum certification period for any interval is 90 days, the certification period may expire prior to this time frame if the therapist selects a different duration. For example, if you evaluate a patient and decide that an eight-week period of treatment is adequate, the POC will expire in 60 days rather than 90. This means you must complete a recertification note when the POC expires (if there’s a change in the patient’s status warranting the continuation of care).

3. Learn how to write functional and measurable goals.

While we all learned how to write short and long term goals during our clinical affiliations, this remains challenging for many of us—especially when we encounter patients with complex diagnoses and needs. Goal-writing is really more of an art than a science. It requires a willingness to examine the key elements of the assessment in order to establish appropriate goals. Because we all have varied communication and writing styles, goal-writing can become an even bigger challenge when multiple therapists are treating one patient.

It is important that our goals reflect the issues we expect to resolve in the short term, as well as those we expect our patients to achieve by the conclusion of therapy. It’s also critical that we update goals to reflect any new issues or changes that pop up over the course of treatment.  For example, if a patient with a history of chronic ankle injury is receiving physical therapy for an acute ankle sprain, some appropriate short-term goals may be to:

  • resolve edema by a certain amount as measured by decreased ankle girth (to facilitate improved ankle mobility);
  • achieve 10 degrees of ankle dorsiflexion (for increased heel strike to promote a normalized gait pattern); or
  • independently perform an AROM and basic strengthening program (to facilitate improved tolerance to ADLs).

Examples of long-term goals may be to:

  • demonstrate the ability to perform five times sit to stand in under 10 seconds with symmetrical weight bearing (to demonstrate improved functional leg strength and weight bearing tolerance);
  • walk without significant gait deviations on an unlevel surface for a specified time or distance (to facilitate safe community ambulation for performance of daily tasks or to achieve an increased score on the Berg Balance test, thus denoting decreased falls risk).

Goals should always relate to the findings on the initial evaluation and subsequent progress notes. Establishing a problem list is often helpful when identifying key impairments and functional limitations—which, in turn, can help guide us in writing appropriate goals. This skill is necessary and also especially useful when it comes to justifying the need for continued care.

4. Understand functional limitation reporting (a.k.a. G-code reporting).

Medicare’s functional reporting system has been in place for a number of years, but many therapists are still unsure of how to correctly report G-codes. CMS introduced G-codes so providers could functionally categorize patients by indicating their abilities based on a percentage. As people—and their conditions—vary greatly, this has proven to be a challenging task, and one that’s not necessarily practical or valuable to the therapist or patient. However, we must input this information into our documentation in order to maintain compliance with quality data reporting requirements.

On a qualified patient’s initial evaluation, we must select the category that best represents the patient’s functional status (e.g., Mobility: Walking and Moving Around; Changing and Maintaining Body Position; or Carrying, Moving & Handling Objects). This determines which G-code we report. We then must select the severity modifier that indicates the percentage of impairment, which ranges from CN (100% impaired) to CH (0% impaired). You may determine this percentage based on a particular functional outcome measure (e.g., a Timed Up and Go [TUG] test) as well as your own clinical judgment. Functional outcome measures (FOMs) are useful for not only identifying the patient’s current level of function, but also setting goals. For example, if a patient scores 16 seconds on the TUG upon initial evaluation—a score that correlates with increased falls risk associated with decreased gait speed—the corresponding severity modifier would be CK (44.4 % impaired). You may set a long-term goal (LTG) for the patient to achieve a TUG score of 13 seconds to indicate improved gait speed and decreased falls risk with a severity modifier goal of CI (11.1% impaired).

5. Be able to apply the definition of “reasonable and necessary.”

The term “reasonable and necessary” often invites some confusion when it comes to documentation, as there are indeed some gray areas here. CMS defines this term as follows: “the service is considered, under accepted standards of medical practice, to be a specific and effective treatment for the patient’s condition.” While this is a fairly clear definition, the manner in which we apply it as therapists can vary widely based on our training and experience. For instance, one therapist may initiate treatment for a patient who presents with edema around the knee and decreased knee flexion by implementing ultrasound and PROM, while another therapist may perform edema massage and instruct the patient in an AROM program with a TENS unit in place to manage pain during exercise. Both approaches are valid, and both can be viewed as specific and effective. Is one approach superior to the other? While some cases (e.g., a patient s/p rotator cuff repair) may require a therapist to follow a specific protocol as outlined by a physician, most situations allow us the freedom to select the most beneficial techniques and treatments for our patients. As a result, outcomes may vary greatly from one practitioner to another and could be affected by a number of other variables (e.g., patient attendance, motivation, and presence of co-morbidities). According to CMS, the other factor at play with the “reasonable and necessary” standard is that the patient must require a type of service that only a therapist—or qualified professional working under the supervision of a therapist—can safely and effectively perform.

6. Know the consequences of delayed certification.

What happens if certification is delayed? Under the current guidelines, it is the therapist’s responsibility to submit the POC to the prescribing physician in a timely manner. The therapist should also document all attempts to contact the physician to request POC signature in case there is a significant delay in obtaining it. If you ever end up submitting an appeal following a technical denial (i.e., a denial that occurs after certification is not obtained within the appropriate time period), it is crucial that you have this documentation. Some facilities may have a system in place in which a certain individual monitors POCs and follows up on those that have not been certified. This is a more common practice in hospital settings, where there is usually a specific person or people appointed to implement and oversee compliance measures. Regardless, it is in every practice’s best interest to monitor the certification process in order to ensure that this requirement is met.

7. Understand how to modify the POC.

POC modification is necessary when a patient’s status changes. The therapist must then obtain physician signature for the updated POC. So, what constitutes a status change? Typically, there is a disruption to care (e.g., the patient is hospitalized for a medical issue unrelated to the current condition for which he or she is being treated) or a new issue or event arises that you feel requires prompt attention and treatment (e.g., the patient is receiving treatment for a lumbar diagnosis and is now complaining of shoulder pain, or the patient was receiving treatment for knee pain when he or she sustained a fall, and he or she now presents with an ankle fracture that does not require surgical intervention).

If there is a disruption to care or an event that caused the patient to sustain a new injury, a re-evaluation may be necessary. In this case, the assessment section would need to include (1) an updated overview of how the patient was progressing up until the point that care was disrupted and (2) details on any decline in, or changes to, the patient’s status. Additionally, the therapist would address existing goals and add new goals accordingly. The therapist would also need to decide if care should continue to be implemented for the initial diagnosis as well as a new diagnosis—or if the new diagnosis should take precedence.

Depending on the rules of the facility, the therapist may also need to obtain a new prescription to indicate the new diagnosis. Some EMR systems allow for the therapist to select a therapy diagnosis, in which case the re-evaluation or progress note may contain this new treatment diagnosis and subsequent notes may contain the additional medical diagnosis (as the prescription does not always match the therapy diagnosis). This may also vary by state, so refer to your LCD (local coverage determination) to review the policies for the state in which you practice. You can obtain this information here. Keep in mind that a re-evaluation/re-examination is not the same as a progress note. However, the 10-visit rule still applies (read on for more information about this).

8. Be aware of the 10-visit rule for completing progress notes and recertifications.

A number of years ago, Medicare updated its policy regarding the required frequency for progress note completion. The 10-visit rule replaced the 30-day rule, meaning therapists must submit a progress note on or before the patient’s 10th visit in order to comply with this regulation. Otherwise, Medicare may deny reimbursement for that visit or set of visits. For example, if you see a patient 13 times before you complete a progress note, payment for the 11th, 12th, and 13th visits is subject to denial. The other issue to consider is that there are times when you may need to complete a progress note with recertification before the 10th visit—namely, if the certification period is approaching expiration or has expired.

Let’s consider a scenario in which a patient has received treatment over a two-month period. The initial POC recommended treatment twice a week for eight weeks from August 1 through September 25. The patient attended therapy regularly throughout August, completing a total of 10 visits by the end of the month. The patient is progressing well, and the therapist recommends that he or she continue for three more weeks, in accordance with the initial plan of care. The therapist completes a progress note on August 31, which marks the patient’s 10th visit. The patient subsequently misses his or her next visit during the first week of September due to being ill; attends another visit; and then misses two additional visits due to being on vacation the following week. The patient returns on September 19 for his or her next visit, which is only visit 12; however, the original POC will expire on September 25. So, the therapist must either (1) discharge the patient by that date in order for the visits to be accepted as part of the current POC, or (2) complete a recertification on or just before that date to indicate the reason for extending the POC. The new POC must specify a new end date for that duration of care, and the therapist must send it to the physician for certification. This is an example of when a therapist would need to complete a progress note with recertification prior to the 10-visit limit.

Keep in mind that while some EMR systems have built-in prompts to indicate the 10th visit, there may not be any indicator of the POC expiration date. It is very easy to treat beyond this date and fail to obtain the recertification at the proper time period. Thus, it’s crucial that you establish your own system personally and/or within your clinic to ensure that you meet this requirement.

9. Have a handle on the therapy cap.

Update: The therapy cap has been repealed as of February 9, 2018. Learn more here.

For many years, Medicare has imposed a cap on therapy services. In 2017, this cap was set at $1,980 for physical therapy and speech-language pathology combined and $1,980 for occupational therapy. Additionally, there is a second-level cap threshold of $3,700. There are several important factors to understand with respect to these limitations. First, I believe wholeheartedly that patients should be made aware of the cap upfront. Depending on the setting in which you work, there may be a written document you can provide to the patient that details the parameters of the cap and how the practice or facility handles it. Some practices inform their patients that they can receive services up until the initial cap is reached, at which point they must be discharged unless continued care is medically necessary or they want to continue on a self-pay basis. If a patient decides to pay out-of-pocket for Medicare-covered services that are not medically necessary beyond the cap, the patient must sign an Advance Beneficiary Notice of Noncoverage (ABN). Please note that it is only necessary for an ABN to be signed when the patient wishes to continue to receive therapy under the Medicare benefit but the therapist does not feel that this is warranted. This situation may occur at any interval—even well before the cap is reached.

In contrast, there are individuals for which continued care well past the cap limitations is easily justified based on their conditions. Some EMR systems include a built-in alert that notifies the therapist when a patient is about to exceed the initial cap, thus prompting the therapist to add the KX modifier. In this case, documentation must clearly support the reasons for continued care. A hospital facility may employ the billing department staff to handle the KX modifier rather than have the individual therapist add it. Either way, the therapist should be aware of this modifier and what it means.

What is the best way to determine the necessity of continued treatment? This presents another layer of confusion, as there is a provision for covered maintenance services. If a patient has a long-standing or chronic condition that warrants treatment by a skilled therapist, the therapist can recommend transition to maintenance care. Despite the fact that maintenance is associated with ongoing therapy, the therapist must define a finite time period with appropriate goals, after which point the patient would be discharged to home with the expectation that the caregiver(s) would implement the HEP. I have found that the best approach to explaining the cap is to notify the patient that it is an arbitrary limit Medicare sets as part of the agency’s effort to control costs, and that the average number of visits patients can receive under the cap is about 12 to 16, depending on the units billed for each treatment session (this estimation is based on a roughly 30-minute treatment session). It’s the therapist’s responsibility to maintain an open dialogue with the patient to determine the most appropriate plan of care. It is useful to explain to the patient that certain criteria must be met in order for Medicare to consider care necessary—and thus, to pay for it. Therefore, the therapist should continue to communicate clinical findings and adjust goals accordingly to justify the need for skilled services.

Some therapists and practice owners do not fully understand the guidelines associated with the cap or ABNs. It is critical that all clinicians educate themselves on these matters, as they impact both the patients and the quality of care delivered. Most patients are overwhelmed or confused by these provisions, even when they receive clear explanations. Considering that these explanations also take time—a luxury we often do not have—I’d recommend seeking assistance from support staff, if possible, to ensure that every patient is properly informed (but doesn’t lose valuable treatment time).

10. Know how to find resources.

Indeed, all of these parameters can be overwhelming. When in doubt, ask questions and seek resources to clarify any confusion you may have. Understanding what needs to be done at the outset can save time, minimize frustration, and improve your chances of capturing the highest level of reimbursement possible for the services delivered. For more information on the topics covered above, check out this fact sheet. For more information on Medicare guidelines for therapy benefits, visit this Medicare page. It’s important for all therapists, managers, and practice owners—regardless of their setting—to understand Medicare documentation guidelines. Many private practice owners are unaware that consistent errors in documentation present a red flag to Medicare that may put those providers at risk for an audit. There are various degrees of automated and deliberate review that you may not know about, and those reviews can be financially detrimental to your practice’s bottom line. As therapy practitioners, it’s our responsibility to use the tools available to educate ourselves on the rules.

Katerina Liapis is a physical therapist who has dedicated her career to helping people achieve a higher state of healing and wellness. After 15 years in the field, she’s excited to share clinical pearls of wisdom with fellow therapists and WebPT Blog readers. She has also contributed to and


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