Medicare Documentation Requirements for Physical/Occupational Therapy

To receive payment from any insurer for occupational or physical therapy services, the documentation must accurately report medically necessary service. It must also support the charges submitted on the claim.

Medicare, however, has some other rules that you should understand to help you comply with CMS and others that are following their lead. Ensure your documentation:

• Conforms to state and local laws
• Conforms to professional guidelines offered by the APTA or AOTA
• Supports time spent
• Supports any billed CPT code
• Complies with all Medicare regulations

Initial Evaluation

The first step in any therapy care plan for Medicare is the initial evaluation. To perform this accurately, a licensed therapist needs to

1. Examine the patient.
2. Confirm/deny Physician Medical Diagnosis through subjective and objective observation.

Once this is completed, the therapist must create the POC (Plan of Care). The minimum Medicare requires for this is:

• Medical Diagnosis
• Assess and apply Long-term Functional Goals (FLR CODES)
• Detail Types of Service/Interventions Performed
• Provide quantity and frequency of treatment (decide on 3 x 4, etc.)

POC Certification

Once this POC has been established, a licensed physician or nurse practitioner must sign and date it within 30 days of the evaluation. The information of the signing provider needs to be submitted on the HCFA 1500 claim form in the order/referring physician field for Medicare to recognize the claim as clean.

POC Recertification

When completing the evaluation, you established the frequency and duration that you planned for therapy. If treatment must continue after this period of time, then a re-certification is required. Complete a re-evaluation that includes the same elements as in an initial evaluation. Then, forward the re-evaluation results to the referring physician for their updated POC signature. You must do this re-certification every 90 days, regardless of what was presented in the evaluation.

Physical / Occupational Therapy Daily Note

According to the CMS Coverage Manual, IOM Pub. 100-02 Chapter 15, 220.3, the

“purpose of a daily note is to create a record of all treatments and skilled interventions that are provided and to record the time of the services in order to justify that use of the billing codes on the claim form. Documentation is required for every treatment day and every therapy service… the treatment note is not required to document medical necessity or appropriateness of the ongoing therapy services.”

Based on this information, the daily note must contain:

• The Date of Service
• All services provided
• How much time was spent for each service
• Any changes made to treatment from the last visit
• Any observations of the patient made during treatment

If a Therapy Assistant provides treatment under the direct supervision of a licensed therapist, you must also include the following in the daily note:

• Documentation of review of POC
• Notes of regular patient progress review with Assistant
• A brief explanation of treatment changes or advancement based on reviews
• A co-signed note with documentation that the assistant provided services “under direct supervision”

Physical / Occupational Therapy Progress Note

Every tenth visit, a licensed therapist must complete a physical therapy or occupational therapy progress note. This report must include:

1. An evaluation of patient’s progress
2. Professional judgement about Continued Care
3. Goal/treatment modifications

This isn’t considered a re-evaluation; services should not be billed as such. This note is specifically necessary to justify the medical necessity of continued treatment. If it isn’t justifiable, you must complete a discharge.

Discharge Summary Note

A Discharge Summary Note is the final document in the treatment of a therapy patient. This note must include a detailed statement that explains:

1. The course of treatment
2. Discharge notification
3. Objective summary of patient status referencing the condition at the start of treatment

This information may seem a bit overwhelming if you are just starting out or struggling to comply with other Medicare guidelines. However, understanding what needs to be done can save you time, minimize audit possibilities, and improve your chances of capturing the highest level of reimbursement.