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Coding and Billing FAQs

Coding and Billing FAQs

1. As an occupational therapist starting out in private practice, I know that I will have to protect myself legally, ethically, and financially. Where do I obtain information about liability and malpractice insurance?

2. I am new to private practice. How do I determine what charges to set for my services?

3. I know that there are many different types of payers that receive payment for services. Do they all follow the same rules and policies?

4. What is an NPI and do I have to obtain one?

5. What codes do I use to bill for my occupational therapy services?

6. How do I bill for a wellness/ fitness program?

7. What is the proper way to code for splints? Which codes do I use and where can I locate them?

8. How do I bill Medicare for driving evaluations?

9. I am interested in setting up a low vision program. How do I code for these services?

10. How do I code for occupational therapy services involving seating and positioning assessments and services?

11. What is a diagnosis code and where do I locate these codes to describe my services?

12. Who has the authority to assign ICD-9-CM codes for billing?

13. Do I have to become a Durable Medical Equipment (DME) supplier if I work in a physician's office ("billing incident to") or my own private practice?

14. Who can provide dysphagia services?

15. As an OT specializing in sensory integration, many of my clients have complained about no or extremely low reimbursement from private insurance companies. What CPT codes can I use to demonstrate and optimize my services? Does AOTA assist with this at all?

16. Medicare is not paying for fluidotherapy or iontophoresis. What do I do?

17. Does Medicare reimburse for assistive technology/adaptive equipment?

18. I am treating two Medicare Part B patients in the same treatment area. How do I appropriately bill for this?

19. Medicare has changed its documentation guidelines for service providers. At my facility, occupational therapy assistants (OTAs) have always done progress notes on patients. Now I am being told that I can no longer do this task. Is this true?

20. Our outpatient facility is has taken students as interns for years. A directive has come down stating that students are no longer accepted in Medicare Part B settings because of changes in Medicare regulations preventing them from working without the therapist standing along side of them. Is this true and does this mean students cannot get the training to become future professionals?

21. I work in a comprehensive outpatient rehabilitation facility (CORF). Do I have to follow the CCI edits and do they apply to the therapy services I provide?

1. As an occupational therapist starting out in private practice, I know that I will have to protect myself legally, ethically, and financially. Where do I obtain information about liability and malpractice insurance?

As a professional (private practitioner or facility employee), you will want to consider obtaining some sort of liability insurance to protect yourself in the event of unforeseen circumstances. AOTA partners with a professional liability insurance company called Proliability (https://www.proliability.com/). They provide global risk management, risk consulting, insurance broking, financial solutions, and insurance program management services for businesses, professional services organizations, and private clients. They offer information on obtaining plans.

2. I am new to private practice. How do I determine what charges to set for my services?

There is no one way to determine what you should charge for you services. There are various types of fee schedules that can provide payment information. Your charges should reflect the cost of doing business and making a reasonable profit. Charges should also reflect your costs for providing OT services consistent with community and insurer rates. However, most payers do not reimburse a practitioner’s actual charge. Every year Medicare publishes a physician fee schedule (MPFS) that contains the payment amount for CPT and HCPCS services. This is one type of fee schedule that is a good place to begin for approximating what the base charge for a particular service (Medicare or non-Medicare). The MPFS is based on the resource based relative value system (RBRVS) that looks at the work involved, skill required, and physical effort essential to perform a service. Medicare and many other non-Medicare payers use the RBRVS. Estimated calculations of annual MPFS rates per geographic region are available on the CMS website. You can also obtain official Medicare fee schedule rates from your Medicare Carrier or Fiscal Intermediary.

With regard to establishing fees for your services, as an association we can not advise on you on this as it is illegal and is in violation of antitrust laws.

3. I know that there are many different types of payers that receive payment for services. Do they all follow the same rules and policies?

No. Just as there are many different payers (e.g., Medicare, Medicaid, Worker's Compensation, Blue Cross/ Blue Shield, School Systems, Private payers), there are different rules that each payer creates for its company. The Medicare system is the only system that creates national guidelines that apply in every state. Medicaid is federally funded but the individual states oversee its operations and therefore, the guidelines for Medicaid vary from state to state. Private payers (like Horizon, Cigna, BC/BS), create their own payment rules.

4. What is an NPI and do I have to obtain one?

The Health Insurance Portability and Accountability Act of 1996 (HIPAA) mandated that the Secretary of Health and Human Services adopt a standard unique health identifier for health care providers. On January 23, 2004, the Secretary published a Final Rule that adopted the National Provider Identifier (NPI) as this identifier. The enumerator system is a federal mandate of all health care providers including occupational therapists. OTs will need to apply for an NPI by either May 23, 2007, or May 23, 2008, depending upon the type and size of the health care covered entity. Once enumerated, a provider's NPI will not change. The NPI remains with the provider regardless of job or location changes. There are a number of ways to obtain an NPI. Information can be found on the CMS website at https://nppes.cms.hhs.gov. You can also visit the CMS FAQs section on the NPI .

5. What codes do I use to bill for my occupational therapy services?

Many payer systems recognize Common Procedural Terminology (CPT) codes. The American Medical Association (AMA) owns the copyright to these codes which provide common billing language that providers and payers can use for payment purposes. Most of the codes found underin the Physical Medicine and Rehabilitation Services (PM&R) (97000-97999) section can be used by occupational therapists and describe services that occupational therapists provide. In some circumstances, codes outside of the PM&R section may appropriately describe occupational therapy services. You should consult the entire manual for codes that are not listed in this section and verify the appropriateness of using the code as an OT provider with the payer for reimbursement.

6. How do I bill for a wellness/ fitness program?

You must first investigate whether these types of services are covered in the client’s health insurance contract. There is no specific treatment or procedure code for a wellness or fitness program. Instead, you will need to look at the components of such a program and bill for the occupational therapy (OT) services that you are providing as an occupational therapist. If you create a program or perform an evaluation for a client that is comprised of several procedures or treatments, it is always good practice to specifically and clearly explain what it is that you are doing that is considered occupational therapy. Ask yourself the following questions:

  • Am I performing occupational therapy services within my scope of practice?
  • What specifically am I doing with this person (e.g., self-care activities, ROM)
  • Have I stated in my documentation how the activity relates to the person’s individualized occupation-based goals?

The OT evaluation code (97003) is generally used only for the initial, overall evaluation and may not be accepted by payers for additional specific assessments that are performed during an episode of treatment. Select the treatment or procedure codes that fit the definition of a wellness or fitness plan of care as you determine using you professional clinical reasoning.

7. What is the proper way to code for splints? Which codes do I use and where can I locate them?

When applying a splint or other orthosis to a patient as well as training in its use or maintenance, a therapist will most often use the code 97760 "orthotics management and training." If a previously applied splint requires adjustments/modifications, the 97762 "checkout for orthotic/prosthetic use" is appropriate. When not otherwise specified, you may select the appropriate code from the Medicare alpha-numeric Level II HCPCS codes (Orthotic procedure codes are found in the "L" section and Medical and Surgical supply codes are found in the "A" section) to charge for the splint fabrication time and materials. Therapists may report a procedure code, such as 97760 (orthotics fitting and training) and an "L" code on the same date of service. Pre-fabricated and custom-fabricated orthotics for patients receiving services under hospital outpatient or SNF Part B benefits should be billed as Part B claims (form CMS-1450) to the provider’s fiscal intermediary. All other providers, including private occupational therapy practitioners and physician offices must obtain a durable medical equipment (DME) supplier number from their DME regional carrier (DMERC) in order to bill for splints (orthotics). Therapists may bill a procedure code (e.g., 97760) to their local carrier and an "L" code to the DMERC on the same date of service. Orthotics claims are paid the lesser of actual charge or fee schedule amount. The DMERC should be able to supply practitioners with the fee schedule rates for the codes they most often use.

All occupational therapy practitioners who provide DME and splints should have access to the current CPT book and a Medicare National Level II HCPCS code book, available from the AMA (800-621-8335) or many other publishing companies. The CPT book is updated annually, with new and revised CPT codes effective on January 1 of each year.

8. How do I bill Medicare for driving evaluations?

Medicare does not directly reimbursement for Driver rehabilitation programs. There currently is not billable code that recognizes or pays specifically for "driver evaluations". Medicare will reimburse for an evaluation and services or occupational performance areas that would be found in a driver rehabilitation program. A few questions that you should ask are:

  • What is the reason for conducting a behind the wheel driving evaluation?
  • Is it being done to assess self care issues, community reintegration, neurological deficits, adaptive equipment instruction, or etc?

You can perform these interventions (which all have current CPT codes in place) keeping in mind that the medium used for instruction in assessing these focus areas is driving behind the wheel. For this you would use the regular CPT codes for billing and documenting your services. Make sure documentation indicates exactly what you are doing and how the goals of the patient reflect the necessary medical treatment for driving rehabilitation.

AOTA has a listserv network available to members. It is a forum where your colleagues can communicate with each other on this issue. The Physical Disabilities Special Interest Section (PDSIS) has an SIS Driving/Driver Rehabilitation Network.

9. I am interested in setting up a low vision program. How do I code for these services?

Under Medicare, a therapist should describe these services as occupational therapy for a person with low vision deficits. Therefore, the appropriate Physical Medicine and Rehabilitation (PM&R) CPT codes should be billed based on the treatment goals and the activities performed. The Centers for Medicare and Medicaid Services (CMS) published a provider education program memorandum in May 2002 that addresses Medicare coverage of rehabilitation services with vision impairments (http://www.cms.hhs.gov/Transmittals/Downloads/AB02078.pdf).. AOTA has produced a self-paced clinical course titled “Low Vision: Occupational Therapy Intervention With the Older Adult.” This item is available through the AOTA online bookstore at www.aota.org.

10. How do I code for occupational therapy services involving seating and positioning assessments and services?

CPT code 97112 is generally the most appropriate code for positioning because the code descriptor includes interventions designed to enhance posture and balance. You should analyze why positioning of the patient is needed. CPT code 97760 can be used with patients requiring trunk orthosis that require lumbar or trunk pad supports, which are components of seating systems prevalent in skilled nursing facilities. If positioning in a wheelchair, bed, or chair is needed to enhance functional performance in ADLs, then CPT codes 97535 or 97537 would also be appropriate. Wheelchair management/propulsion (97542) is intended for use with patients whose goals include the ability to self propel in a wheelchair.

11. What is a diagnosis code and where do I locate these codes to describe my services?

Diagnosis codes, more commonly referred to as ICD-9-CM (International Classification of Diseases, 9th revision, clinical modification) codes are used to classify illness, injuries, and patient encounters with health care practitioners for services. The codes are updated annually and can be found in a manual called the ICD-9-CM manual. There are several distributors of the manual where you can obtain a copy. The AMA is one distributor and can be contacted at or 800-621-8335. The Centers for Medicare and Medicaisd Services also has valuable ICD-9-CM coding resource information on its Web site at http://www.cms.hhs.gov/ICD9ProviderDiagnosticCodes/ at http://www.cms.hhs.gov/medlearn/icd9code.asp.

12. Who has the authority to assign ICD-9-CM codes for billing?

Occupational therapists should NOT diagnose and treat anyone without a referral or certification for treatment from a physician unless permitted by state law. In general, OTs do not initially diagnose a condition, but may identify a treatment diagnosis for the purpose of billing. Check with your state's practice act to verify whether or not a referral must be obtained prior to the initiation of services. The primary diagnosis or condition should be obtained from the physician, social worker, nurse practitioner, psychologist, etc. Examples of this type of diagnosis would be developmental delay or cerebral palsy. While this is the diagnosis that opens the case for occupational therapy services, it might not be the reason that a child is referred for occupational therapy. An occupational therapist would list a treatment (ICD-9-CM) code on the billing form in addition to the medical diagnosis. The documentation (and subsequent CPT codes) should reflect this secondary diagnosis.

It is appropriate for an occupational therapist to provide a treatment diagnosis that reflects the reason for occupational therapy services. This treatment diagnosis is not a substitute for the initial/primary diagnosis, but is a further clinical judgment by the professional of the functional deficit related to the primary diagnosis. In reporting the services for billing, it may be appropriate to use one or both diagnoses.

13. Do I have to become a Durable Medical Equipment (DME) supplier if I work in a physician's office ("billing incident to") or my own private practice?

If you submit payment claims for durable medical equipment to the Medicare Part B program using your own Medicare provider number, then you will need to obtain a DME supplier number. If you are billing your services as incident to a physician, you should ascertain whether the physician owned practice currently maintains a DME supplier number. If the answer is yes, then you can bill for orthotics and prosthetics under the facility DME number. If the answer is no, then you will need to obtain a separate DME supplier number.

14. Who can provide dysphagia services?

Occupational therapists and occupational therapy assistants, by virtue of their academic training and fieldwork experience, are prepared to intervene at a basic or entry level with adults experiencing difficulty in the passing of food, liquid, or medicine and impairments in swallowing safely and independently. This is a reimbursable service by Medicare and many other 3rd party payers. Always check with your state practice act and individual insurance companies to verify that your services will be covered.

15. As an OT specializing in sensory integration, many of my clients have complained about no or extremely low reimbursement from private insurance companies. What CPT codes can I use to demonstrate and optimize my services? Does AOTA assist with this at all?

This is a concern that is commonly seen by providers billing sensory integration (SI) services to 3rd party payers, including insurance companies. As an OT, you are using your clinical reasoning and judgment to bill for OT services. The methods of treatment or procedure are sensory integration techniques. There are several CPT codes to describe the services you are providing, i.e., neuromuscular reeducation : 97112; therapeutic activities: 97530; Self -care (ADLs): 97535; the SI code: 97533; etc. The dilemma comes from not knowing what procedures insurance companies will and will not reimburse OT providers. As an association, we can only suggest solutions on how to correctly bill services, not how to optimize payment. How you decide to bill for the OT services is subjective and will change depending upon the clinical reasoning for providing a service to a particular patient. The duration and payment amount the insurance companies reimburse is up to the payer's discretion.

16. Medicare is not paying for fluidotherapy or iontophoresis. What do I do?

CMS hires contractors to oversee Medicare reimbursement of provider regulations and reimbursement. There is a Medicare Part A and a Medicare Part B contractor for each state. These contractors create policies called Local Coverage Determinations (LCDs). The LCDs provide further explanation of Medicare services under various settings, conditions, or providers. To see the contractor LCDs for your state, go to the CMS Web site at http://www.cms.hhs.gov/MedicareProviderSupEnroll/
downloads/contact_list.pdf
.

If it is clear that the Medicare contractor restricts OT from providing the services, then contact your state association Reimbursement/Regulatory liaison and they will assist you with next steps. You should also contact AOTA so we can provide you with the support and resources you need. If there are no obvious restrictions, contact the contractor for additional information about the basis for denials.

17. Does Medicare reimburse for assistive technology/adaptive equipment?

Medicare (and most insurance companies) has never reimbursed separately for "adaptive equipment" such as reachers and adaptive kitchen utensils. In general, only those items considered durable medical equipment, orthotics, or prosthetics that can properly be coded using Level II HCPCS codes can be billed for reimbursement. At one time, many hospitals, SNFs and other providers bought adaptive equipment, or the supplies necessary to construct these items, in bulk, documented the expenses in their cost reports, and supplied them to patients. However, due to recent Medicare reimbursement changes, many facilities can no longer supply these items "free" to patients because these costs can not be reimbursed separately.

Occupational therapists can recommend certain pieces of equipment to patients, demonstrate how to use them, and suggest where they or families can purchase equipment. Alternatively, a facility or therapist may sell directly to patients. Community agencies that supply adaptive equipment to individuals who meet specific income criteria also should be investigated. OT treatment related to the fitting, training and proper use of these items is a covered service.

18. I am treating two Medicare Part B patients in the same treatment area. How do I appropriately bill for this?

If the two patients are considered a group, the therapist should use the group therapy code (97150), which denotes that therapeutic procedures were performed in a group of two or more individuals. Keep in mind that 97150 is not a time-based code and should only be reported once per treatment session for each individual being treated in the group.

In a situation where a therapist is providing one-on-one treatment to 2 or more patients in the same area, the OT may bill one-on-one CPT code, which describes the therapeutic intervention(s) being performed, for each patient. Each patient may be receiving the same or different treatments. Since most of the therapeutic procedure codes are reported in 15-minute increments (or units), the therapist must report only the number of units that reflects the time that the therapist had direct one-on-one contact with each patient. For example, a therapist working with 3 individuals for one hour on specific ADLs (97535) described on each of their plans of care would attribute to each individual in the group only that portion of the hour in which direct one-on-one contact took place (e.g., Patient A--2 units or 30 minutes; Patient B--1 unit or 15 minutes; and Patient C--1 unit or 15 minutes). The therapist may not allocate the full hour to each individual in the group, nor should the total time add up to more than the hour the therapist spent in treatment. NOTE: These guidelines should not be used for reporting units of time for SNF PPS patients under Part A of Medicare, which requires reporting of total time for each patient in a group session. Therapy provided in a group setting should always address the patient's individualized goals, as set forth in the plan of care. For payers other than Medicare, check directly with them to ensure that you are adhering to their rules and policies.

19. Medicare has changed its documentation guidelines for service providers. At my facility, occupational therapy assistants (OTA) have always done progress notes on patients. Now I am being told that I can no longer do this task. Is this true?

CMS provided additional clarification regarding the documentation of therapy services as it relates to rehabilitation personnel in transmittal R63BP. Transmittal 63 does not state that an OTA can not participate in the treatment and written documentation of a patient's status. CMS has indicated that for Medicare payment purposes, the clinician (OT) is responsible for writing information required in the Progress Reports and that the minimum Progress Report period shall be at least once every 10 treatment days or at least once during each certification interval, whichever is less.

The transmittal also states the reports written by assistants are not complete Progress Reports. OTAs may write elements of the Progress Report between clinician reports. An OTA may provide elements to the progress note, either in separate documentation or a treatment note which is required with every patient visit. Both forms can become part of the patient's record and supplement the report of the clinician.

20. Our outpatient facility is has taken students as interns for years. A directive has come down stating that students are no longer accepted in Medicare Part B settings because of changes in Medicare regulations preventing them from working without the therapist standing along side of them? Is this true and does this mean students cannot get the training to become future professionals?

The Medicare program does not and has not ever allowed the services of students to be billed directly to the program. The only professionals who can enroll as a provider and directly bill the Medicare program for services provided are Occupational Therapists (OT). This does not mean that students cannot provide services under Medicare; it means that they cannot bill the program directly-—they will require supervision since they have not met the Medicare qualifications to enroll as a provider. Occupational therapy assistants and students can provide services and have various levels of supervision across different settings but the signature of the supervising Occupational Therapist must be applied for billing purposes to the Medicare program to validate that the occupational therapist has overseen and is aware of the beneficiary’s services.

21. I work in a comprehensive outpatient rehabilitation facility (CORF). Do I have to follow the CCI edits and do they apply to the therapy services I provide?

The Correct Coding Initiative (CCI) edits were established in 1995 in an effort to reduce the number of unbundled services, standardize claims coding and payment on a national level, and to cut down on abusive coding practices with Medicare claims by identifying inappropriate CPT code combinations. During this time, physicians, occupational therapists in private practice, and outpatient hospitals were required to follow the CCI edits. On January 1, 2006, occupational therapists who work in CORFs, skilled nursing facilities (SNFs), rehabilitation agencies, home health agencies (HHAs) in addition to the settings prior to this time, were required to follow CCI rules. Today, many other payers besides Medicare follow the guidelines of the CCI edits and require them for proper payment of services. Always check with your payer to see if CCI edits are being implemented. For additional information on CCI, visit the AOTA Reimbursement section at www.aota.org or the CMS Web site at http://www.cms.hhs.gov/NationalCorrectCodInitEd/ .