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[Blog Series] A Deep Dive into 2018 Changes for Therapy: Week 3

February 02, 2018
Documentation, Billing, & Coding By Kay Hashagen, Senior Consultant

On January 1, 2017, The Centers for Medicare & Medicaid Services (CMS) rolled out a set of new codes for PT and OT to record the medical complexity of initial evaluations. The definition of the re-evaluation code for both PT and OT was changed, and new codes were applied. Although definitions changed, the reimbursement rates for the varying complexities stayed the same.  



The expectation was that CMS would be collecting data on the use of the codes during the 2017 roll out. There was anticipation in 2018 that there would be a rate adjustment for these codes. Rates would be adjusted based on the complexity in the definitions for High, Moderate and Low, and the percentage of use demonstrated in 2017. 

The 2018 Fee Schedule

Now that the 2018 fee schedule has been released, CMS continues to surprise providers. Reimbursement was not adjusted for the variability in complexity; rather, the reimbursement for a Low complexity evaluation matches the reimbursement for a High or Moderate complexity evaluation. However, from 2017 to 2018, there was a slight increase in the majority of overall rates for PT evaluation codes. In 2017, the reimbursement for OT evaluations was higher than PT evaluations. And in 2018, reimbursement for OT codes decreased slightly, but is still higher than PT reimbursement. For re-evaluation codes, reimbursement increased slightly for PT and OT. However, the re-evaluation reimbursement for OT is still higher than PT.  Download the rate file for complete details.

What the Rate Change Means for Providers

There is no word from CMS on why the fee schedules remained the same for the varying complexity levels. One can speculate that CMS is giving providers another year to make sure their documentation supports the criteria required for each code before they change the reimbursement amounts according to the complexity. Or, perhaps CMS decided that they needed another year of data collection to really see the practice patterns across the continuum of care.

What we do know is that CMS requires that documentation support the code that is billed (Medicare Benefit Policy Manual Chapter 15, §220.3 Documentation Requirements for Therapy Services). Reviewers determine that claims have insufficient documentation when the medical record documentation does not support that the services billed were actually provided at the level billed.

Criteria for Choosing Complexity Levels

In the case of PT and OT evaluation codes, there are very specific documentation requirements to support the elements for choosing either High complexity, Moderate complexity or Low complexity evaluations. These criteria are different for both PT and OT.  During 2017 audit rounds, an auditor identified documentation and coding errors in PT charts, specifically related to whether the case was evolving, stable or unstable. The documentation was missing even though it is a required element for the use of Moderate or High evaluation codes for PT. There was a lack of documentation related to the therapist’s clinical decision making for both disciplines.

Therapy providers should be thankful that in 2018, regardless of the choice of code and the documentation to support it, reimbursement will be the same. This does not diminish the requirement for training. It is even more critical to review with therapists the components for the complexity and revisit the documentation requirements to support the choice of code. Habits that are ingrained are more difficult to break. We continue to anticipate that CMS  will eventually change the reimbursement rates and start auditing to ensure that documentation supports the codes that are billed. Providers should be prepared!


To ensure your therapists are properly coding for medical necessity, let LW Consulting, Inc. perform an audit of your medical record documentation.

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