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It is each Medicare provider’s responsibility to read and fully understand the rules and regulations that have been established for their specialty in Local Coverage Determination (LCD’s) and other official communications. In the event of an audit or other review of your claims, it is prudent for a practice owner to expect that Medicare’s auditors will follow these policies to the letter; in every case. The old adage “If you did not write it, you did not do it” clearly applies.

In this series, we will explore several areas that a practice must consistently address if their goal is to meet the standards established by Medicare. Having complete, legible documentation that establishes MEDICAL NECESSITY, the need for SKILLED THERAPY SERVICES and confirms that the services are REASONABLE and NECESSARY should greatly improve your chances of coming through an audit unscathed.


Section 1862(a)(1)(A) of the SSA states:

“No Medicare payment shall be made for expenses incurred for items or services which … are not reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member.”

Services related to activities for the general good and welfare of patients, such as general exercises to promote overall fitness and flexibility, and activities to provide diversion or general motivation, do not constitute covered therapy services for Medicare purposes. Services related to recreational activities such as golf, tennis, running, etc., are also not covered as therapy services.


Services that do not require the professional skills of a therapist to perform or supervise are not medically necessary even if they are performed or supervised by a therapist. If a patient’s therapy can proceed safely and effectively through a home exercise program, self management program, restorative nursing program or caregiver assisted program, payment cannot be made for therapy services.

Patients must require the unique skills of a therapist to realize improved function. The key issue is whether the skills of a qualified therapist are needed to treat the illness or injury. Can the service(s) be carried out by non-skilled personnel, or are they so sophisticated and complex that they can only be safely and effectively performed by a qualified clinician, or therapists supervising assistants? If they can be done by the patient, aides or other caregivers without the active participation of a therapist they are considered unskilled and not covered.

If at any point in the treatment of an illness or injury it is determined that the treatment does not require the unique skills of a therapist, the services are non-covered.

The use of therapy equipment such as therapeutic pools or gym machines alone does not necessarily make the treatment skilled.


There must be an expectation that the patient’s condition will improve significantly in a reasonable (and generally predictable) period of time.

If an individual’s expected rehabilitation potential would be insignificant in relation to the extent and duration of therapy services required to achieve such potential, therapy would not be covered. This does not apply to the limited situations where rehabilitative therapy is reasonable and achieving meaningful goals is appropriate, even when a patient does not have the ability to comprehend instructions, follow directions or remember skills. Examples include sitting and standing balance activities that help a patient recover the ability to sit upright in a seat or wheel-chair, or safely transfer from the wheelchair to a toilet. This also does not apply to those patients who have the potential to recover abilities to remember or follow directions, and treatment may be aimed at rehabilitating these abilities, such as following a traumatic brain injury.

All services provided must be specific and effective treatments for the patient’s condition according to accepted standards of medical practice; and the amount, frequency, and duration of the services must be reasonable.

Services not provided under a therapy plan of care, or provided by staff that are not qualified or appropriately supervised are not covered, payable therapy services.

Medicare and other agencies are actively auditing therapy providers across the country. The consequences of non compliance can be severe. The information set out in this blog is intended to be a starting point toward building a compliant billing and recordkeeping process.

In future blogs we will explore the role of each of the required documents (Initial Evaluation, Plan of Care, SOAP Notes, Discharge Summary) plays in building a medical record that meets the Medicare standard.

Genco Healthcare helps practices achieve and maintain a culture of compliance. We also assist Healthcare Attorneys in defending their clients who have been audited or subject to pre payment review. Consequently, we have our finger on the pulse of precisely what Medicare’s expectations are when it comes to medical documentation.

For more information contact David Alben at or 914-713-3606.

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