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Reimbursement involves the healthcare provider, the patient, and the third-party payor. The third-party payor is an individual, insurance organization, or governmental agency that is responsible for paying the patient's bill for the healthcare encounter.

Reimbursement Process

The reimbursement process in health care is officially known as the revenue cycle. The process begins when the patient is scheduled for a skilled therapy service. Next, the insurance is validated and the patient is registered into the billing system where the service will take place. The next three steps are crucial for reimbursement. These steps are care documentation or documentation of services provided, charge capture, and coding.

Care Documentation

Care documentation, or documentation of services provided, is written by the care provider or therapist providing the service to the patient. The key to reimbursement is good documentation. For services to be reimbursed to their fullest extent, the documentation must support the services and demonstrate that the services provided were skilled, reasonable, and necessary. It is your responsibility as the licensed provider to justify the level of services being provided.

The Centers for Medicare & Medicaid Services (CMS) provides definitions for skilled, reasonable, and necessary physical therapy services.

Skilled Therapy Service

The documentation in the health record should indicate that the patient's condition requires the knowledge, judgment, and skilled rehabilitation techniques of a licensed therapist. In other words, only a licensed therapist can provide the services safely and effectively. In a 2007 transmittal, CMS also noted that documentation should indicate if skilled treatment could be provided by a licensed physical therapist assistant under the direction of the licensed physical therapist.1

Reasonable and Necessary

Defining “reasonableness” in terms of reimbursement remains a challenge. Documentation must include clear evidence that the services being provided to the patient are reasonable with regard to the amount, frequency, and duration of services1 for the condition being evaluated and treated. If the amount, frequency, and/or duration of services provided deviate from what would be considered the current best practice standard, documentation should support this. For example, a patient may require additional time for treatment for a new hip fracture due to effects from a previous stroke that results in the patient requiring an increased amount of time for completion of basic functional tasks, such as moving from sit to stand. Another example is a patient who required additional time for the completion of her initial evaluation due to increased time for translation of questions and answers, as the patient does not speak English.

Charge Capture

Every healthcare organization has a database called a charge master. The charge master is a listing of items that can be billed to a patient or third-party payor, such as a ...

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