RA-documentation-com Occupational Therapy Reimbursement in a Payer-Driven ModelAs our national healthcare policies undergo debate and face the potential for change that could further affect the way occupational therapists (OTs) practice, one variable that consistently threatens our viability is increasingly strict payer regulation of reimbursement for occupational therapy services. In this climate of uncertainty, how can occupational therapists successfully justify their services and advocate for their patients’ needs?

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Defining Medical Necessity

The term “medical necessity” is not an unfamiliar one to rehab therapists. With the concept borne from insurers’ attempt to contain rising healthcare costs, rendering therapy services that are medically necessary has become a cornerstone of our professional practice: without clearly documented justification for treatment, we risk claims denials, a failure to be reimbursed, and, consequently, the ability to continue providing our patients the care they need.

While medical necessity is theoretically a reasonable concept, in the everyday practice of determining which services a patient needs it’s much more difficult to apply. Perhaps the largest and most debatable issue with our current healthcare reimbursement system being based on “medical necessity” is the fact that a standard industry definition for the term does not exist. Prior to the passing of the Affordable Care Act (ACA), multiple definitions and defining criteria were independently established by major entities including the American Medical Association and Centers for Medicare & Medicaid Services, and more variably yet amongst private insurers. With such variability, a sort of tug-of-war emerges where providers, patients, coders, billers, and payers all have differing rationales for which treatments are necessary and warrant payer reimbursement. When the ACA passed, it did not provide a standardized definition of “medical necessity” and so the debate between payers and providers and their patients continues.

Justifying Occupational Therapy Services

For occupational therapists, proving medical necessity poses a unique challenge. Generally, the more common criteria amongst payers defining medical necessity consider treatment whose cost justifies the potential for a desired outcome and whether treatment will reduce the risk of further decline of a patient’s condition if untreated. Professionally, occupational therapy’s central premise is maximizing quality of life; from a payer perspective, however, treatment interventions surrounding quality of life are not reimbursable, being undefinable by payers’ criteria for medical necessity.

So how can occupational therapists meet payer definitions of medical necessity while maintaining sound clinical and ethical practice, upholding those tenets that drive who we are as clinicians? The most primary, practical action we can take is consistently documenting defensively; that is, providing documentation of patient treatments that clearly justifies the need for services rendered to prevent claims denials and raising red flags for audits. Defensive documentation includes:

  • Using appropriate ICD treatment codes
  • Demonstrating evidence-based practice with the use of relevant standardized assessments
  • Setting functional goals consistent with treatment codes, evaluation results, and OT scope of practice
  • Written assessments that include barriers to progress, plans to address barriers, and an explanation of why skilled services are needed
  • Clearly documenting patient progress (e.g., show progressive advances in exercise programs; set progressively higher goals as prior goals are met)

As a daily act, strong documentation can become easy enough. When considering OT goals and desired patient outcomes, however, this can be more challenging to navigate. Being now in an environment where coverage determination and reimbursement decisions flow from the insurer to the provider, versus a past practice of providers’ expertise determining patient needs, occupational therapists are faced with framing unreimbursable improved quality of life goals in a reimbursable context.

While we can’t abandon our professional ideals that look to optimal quality of life as the ultimate patient outcome, we can certainly focus on our equally significant value of maximizing function. If we approach collaborative goal setting with the immediate aim to improve a patient’s functional status in relation to a particular life skill, we can continue to practice as we’re meant, knowing that by maximizing our patients’ functional abilities we are inherently helping to improve their quality of life.

Implications of the Medical Necessity Debate

By painting a holistic picture of each patient’s case from evaluation to discharge and demonstrating why occupational therapy is medically necessary, we are not only ensuring reimbursement for services, we are, in effect, advocating for our patients’ needs and the value of our services. But that our current healthcare system necessitates such careful, intentional action on our part highlights the lack of a fuller understanding in the healthcare industry of what occupational therapy is, how people benefit from it, and it’s integral role in overall health and well being.

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Certainly, thorough documentation and patient/professional advocacy are driven foremost by a natural sense of integrity. Yet, it is undeniable that today we are urged to be especially conscious of engaging in such activities precisely due to the larger misperceptions of occupational therapy. The implications this has on our profession is significant: if we are unable to successfully justify the need for our treatments, or if occupational therapy services are not more often perceived as “necessary,” more claims denials would only signify a decreased perceived value of occupational therapy, thereby threatening our viability as clinicians and denying our patients much needed care.

These challenges to our practice as occupational therapists are understandably calls for concern but, are equally calls to action. If we can enter and contribute to a collaborative conversation within and outside our profession, we can promote a more complete and accurate understanding of occupational therapy within the healthcare industry and the broader community.

It’s important that we encourage a reconsideration of what constitutes a “medical” and “necessary” nature, what’s necessary to fully improving a person’s state of health, and how improving quality of life fits directly into this picture. Doing so will not only help our profession and the people we serve, it will help healthcare provision as a whole grow into a more balanced system. Medical necessity, as it stands, definitely carries its difficulties but does offer great potential as a bridge between what’s wanted and what’s needed.

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