Good News; Healthcare Reform and Changes in Medicare

Thursday, June 6th, 2013
Last modified on April 2nd, 2019

As clinicians, our ability to provide therapy services to clients is influenced by federal laws and regulations, administrative laws from agencies, and sometimes case law. It becomes challenging to keep track of all the changes that occur in the laws, rules, and regulations that impact our practice. More often, we are aware of changes that negatively impact our ability to provide comprehensive and medically necessary skilled services to achieve optimum client outcomes, such as therapy caps. We are also aware of changes in regulations that impact what we document and the way we document.

As discussed in the prior blog, clinicians are now required to include non-payable G codes and severity/complexity modifiers that provide information about a client’s functional status. Be aware that the testing period for this comes to an end on June 30/13 and therapy services started on or after July 1/13 will need to report this information in the clinical documentation. This requirement applies to Medicare B outpatient therapy, Comprehensive Outpatient Rehabilitation Facilities (CORF’s), Critical Access Hospitals (CAH’s), Skilled Nursing Facilities (SNF’s), rehabilitation agencies, Home Health Agencies (when the client is not under a home health plan of care) as well as therapists in private practice. Are you ready?

On a positive note, a recent landmark settlement agreement in the case of Jimmo v. Sebelius in January 2013, and spearheaded by the Center for Medicare Advocacy (CMA), a national non-profit organization, will change the need to document functional improvement, or potential thereof, in order to justify skilled therapy services. How many times have we had to discharge clients, who still needed skilled services, but due to their condition, were no longer making significant functional improvements? How many of those clients deteriorated and had a decline in functional status due to being discharged? This decision will allow beneficiaries to continue to receive skilled therapy services deemed medically necessary in order to prevent, or slow deterioration, as well as maintain optimum level of function. Continued coverage depends on whether skilled services are still required not if functional improvements have occurred. . It will be critical for clinicians to provide sufficient documentation to support the need for skilled care and that the services are reasonable and medically necessary. For further information visit

Lastly, The Patient Protection and Affordable Care Act (Public Law 111-148) signed into law in March 2010, was intended to expand healthcare coverage to over 31 million uninsured Americans as well as maximizing quality care, cost efficiency, and client outcomes. The states were mandated to establish insurance exchanges to offer cost effective small business and individual insurance plans within each state. They were asked to identify and adopt “a benchmark plan” that included ten categories of required Essential Health Benefits (EHB’s). Rehabilitation, habilitation, and devices are on the list of required EHB’s.

Habilitation Services

Health care services that help a person keep, learn or improve skills and functioning for daily living. Examples include therapy for a child who isn’t walking or talking at the expected age. These services may include physical and occupational therapy, speech-language pathology and other services for people with disabilities in a variety of inpatient and/or outpatient settings.

Rehabilitation Services

Health care services that help a person keep, get back or improve skills and functioning for daily living that have been lost or impaired because a person was sick, hurt or disabled. These services may include physical and occupational therapy, speech-language pathology and psychiatric rehabilitation services in a variety of inpatient and/or outpatient settings

This is great news for clinicians, as historically, “habilitative” services have been denied and since more individuals will now have coverage for rehabilitation AND habilitation, potentially more individuals will be seeking therapy services.

With the changes in Medicare associated with the need to no longer document “functional improvement” and habilitation services being included as an essential health benefit, more individuals should be able to receive the essential and medically necessary skilled services that they need to optimize and maintain function. We can now take the word “maintain” off our list of “dirty words” as long as we can justify and appropriately document the skill that clinicians bring when providing services to clients.


Shannon Scott, OTR/L, is the Clinical Assistant Professor at Stony Brook University Southampton. She is a graduate of the University of British Columbia in Vancouver, Canada and is currently pursuing her doctorate in OT through Quinnipiac University. She has over 23 years of clinical experience, specializing in Neurorehabilitation. She is Level One Brain Injury Certified and is NDT trained. Shannon was one of the first 10 therapists trained in the use of Saebo. Prior to teaching at Stony Brook, Shannon was the Director of Clinical Services at Saebo.


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