01-308 Outpatient Therapy Notification of Medical Review

Noridian Healthcare Solutions, LLC, as the Supplemental Medical Review Contractor (SMRC) for the CMS, is conducting post-payment review of claims for Medicare outpatient therapy billed on dates of service from January 1, 2019 through December 31, 2019. This notification includes the reasons for the review, documentation that will be requested in the Additional Documentation Request (ADR) letter, and resources providers/suppliers may wish to consult when submitting claims.


A series of Medicare laws defined payment rules for physical therapy (PT), occupational therapy (OT) and speech-language pathology (SLP). Beginning in 2015, the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act, (MACRA) allowed providers to apply for exceptions to the PT, OT and SLP legal limits on behalf of beneficiaries. MACRA additionally repealed mandatory manual review requirement and instead required that claims submitted after a beneficiary’s claims have already reached a specified total in excess of the caps be subject to targeted medical review described in the SSA §1833 (g)(5)(E).

In January 2018, The Bipartisan Budget Act (BBA) of 2018 amended Section 1833(g) of the Social Security Act (SSA) by repealing the Medicare expense threshold for therapy services and creating limitations to ensure appropriate therapy services are furnished. The BBA of 2018 is applicable for PT, OT, and SLP services furnished after January 1, 2018. The law creates a Medical Review (MR) expense threshold of $3,000 for PT and SLP services combined and $3,000 for OT services.

The SMRC was directed to perform data analysis on outpatient therapy claims below the 2019 therapy threshold and recommend codes to be selected for review, recommend a sampling strategy, and identify an MR strategy for this project.

Reason for Review

The SMRC is tasked with performing claim review on a sample of outpatient therapy claims from January 1, 2019 through December 31, 2019. The SMRC will conduct medical record reviews in accordance with applicable statutory, regulatory, and sub-regulatory guidance.

Claim Sample Detail

TOB Place of Service Revenue Codes
  • 13x: Outpatient Hospital
  • 22x: Inpatient SNF Part B
  • 23x: Outpatient SNF
  • 74x: Outpatient Physical Therapy Provider
  • 11: Office
  • 0420: Physical Therapy Services
  • 0430: Occupational Therapy Services
  • 0440: Speech Language Pathology Services

Access related project details below.

Documentation Requirements

Below is a list of specific documentation requirements that will be included in each ADR to obtain the necessary documentation to perform the review. Documentation requested has been made specific to assist the provider in collection and submitting pertinent information to decrease provider burden.

Providers/suppliers are requested to submit each of the Documentation Requirements outlined below, if and as applicable to the claim on review.

  1. Physician/Non-Physician (NPP) order or evidence of intent to order
  2. History and Physical reports (include medical history and current list of medications)
  3. Beneficiary’s medical records (which may include; practitioner medical records, hospital records, nursing home records, home care nursing notes, physical/occupational therapy notes) that support the item(s) provided is/are reasonable and necessary
  4. Documentation to support National Coverage Determination (NCD), Local Coverage Determination (LCD) and/or Policy Article
  5. Initial evaluation/re-evaluation signed by ordering physician or practitioner
  6. PT/OT/SLP – Initial evaluation, plan of care, progress reports, treatment encounter notes, therapy minute logs, and discharge summary
  7. Physician/Non-Physician Practitioner (NPP) certification of Plan of Care for Claim Period Including Justification when the Certification is Delayed More than 30 Days
  8. Signed and dated overall plan of care including, short and long-term goals with any updates to the plan of care
  9. Progress reports written by the clinician – services related to progress reports are to be furnished on or before every 10th treatment day
  10. Specific Skilled Procedures and Modalities
  11. For all therapy services rendered submit attendance/treatment records for the claim period – must include total treatment time and identify each specific skilled modality provided
  12. Therapy logs that show services, dates and times for code billed
  13. Records of Aide Visits, Times and Dates
  14. List of all personnel billing services under your NPI. List credentialing, training, licensure, etc., of all personnel
  15. Signature log or signature attestation for any missing or illegible signatures within the medical record (all personnel providing services)
  16. Advance Beneficiary Notice of Non-Coverage (ABN)/Notice of Medicare Non-Coverage (NOMNC)
  17. Any other supporting documentation
  18. If medical record documentation is submitted via esMD: Beneficiary identification, date of service, and provider of the service should be clearly identified on each page of the submitted documentation
  19. PLEASE NOTE: It is the responsibility of the supplier/provider to obtain all documentation from the ordering/referring provider to ensure medical necessity criteria have been met


Social Security Act (SSA) Title XVIII

  • SSA § Payment to Provider of Services
  • SSA 1833(e). Payment of Benefits
  • SSA 1833(g)(7)(A and B[ii]). Payment of Benefits
  • SSA 1833(g)(5)(E). Payment of Benefits
  • SSA 1835(2)(C, D, E). Procedure for Payment of Claims of Providers of Services
  • SSA 1861(g). Outpatient Occupational Therapy Service
  • SSA 1861(p). Outpatient Physical Therapy Services.
  • SSA 1861(s)(2)(D). Medical and Other Health Services
  • SSA 1862(a)(1)(A). Reasonable and Necessary
  • SSA 1862(a)(20). Exclusions from Coverage and Medicare as Secondary Payer
  • SSA 1879(a)(1). Limitation on Liability of Beneficiary where Medicare Claims are Disallowed

Bipartisan Budget Act (BBA) 2018

  • BBA Division E, Title II, 50202. Repeal of Medicare payment cap for therapy services; limitation to ensure appropriate therapy

Code of Federal Regulations (CFR) Title 42, Subpart B

  • CFR 409.17. Physical therapy, occupational therapy, and speech-language pathology services
  • CFR 409.32. Criteria for skilled services and the need for skilled services
  • CFR 410.100(b)(1)(ii). Included Services
  • CFR 410.102. Excluded Services
  • CFR 410.105(b)(1) and (c). Requirements for coverage of CORF services
  • CFR 410.26. Services and supplies incident to a physician’s professional services: Conditions
  • CFR 410.59. Outpatient occupational therapy services: Conditions
  • CFR 410.60. Outpatient physical therapy services: Conditions
  • CFR 410.61. Plan of treatment requirements for outpatient rehabilitation services
  • CFR 410.62. Outpatient speech-language pathology services: Conditions and exclusions
  • CFR 424.24. Requirements for medical and other health services furnished by providers under Medicare Part B
  • CFR 424.27(a)(1 and 2). Requirements for comprehensive outpatient rehabilitation facility (CORF) services
  • CFR 485.713. Condition of participation: Physical therapy services
  • CFR 424.516(f). Additional provider and supplier requirements for enrolling and maintaining active enrollment status in the Medicare program
  • CFR 424.535. Revocation of enrollment in the Medicare program

Medicare Benefit Policy Manual (MBPM), Publication 100-02

  • MBPM Chapter 15, 60. Services and Supplies Furnished Incident to a Physician’s/NPP’s Professional Service
  • MBPM Chapter 15, 220. Coverage of Outpatient Rehabilitation Therapy Services (Physical Therapy, Occupational Therapy, and Speech-Language Pathology Services) Under Medical Insurance
  • MBPM Chapter 15, 230. Practice of Physical Therapy, Occupational Therapy, and Speech-Language Pathology
  • MBPM Chapter 16, 20. Services Not Reasonable and Necessary,
  • MBPM Chapter 16, 110. Custodial Care

Medicare National Coverage Determinations (NCD) Manual, Publication 100-03

  • NCD Chapter 1, Part 3, § 170.3. Speech-Language Pathology Services for the Treatment of Dysphagia

Medicare Claims Processing Manual (MCPM), Publication 100-04

  • MCPM Chapter 5, 20. HCPCS Coding Requirement
  • MCPM Chapter 5, 30. Special Claims Processing Rules for Outpatient Rehabilitation Claims Form CMS-1500
  • MCPM Chapter 5, 40. Special Claims Processing Rules for Institutional Outpatient Rehabilitation Claims

Medicare Program Integrity Manual (PIM), Publication 100-08

  • PIM Chapter 3, Review Guidelines for Therapy Services
  • PIM Chapter 13, 13.5.4. Reasonable and Necessary Provisions in an LCD

Local Coverage Article (LCA)/Determination (LCD)

CGS Administrators, LLC
  • LCD L34046, Speech Language Pathology
  • LCD L34049, Outpatient Physical and Occupational Therapy Services

First Coast Services Options, LLC
  • LCA A57675, Billing and Coding: Dysphagia/Swallowing Diagnosis and Therapy
  • LCD L34043, Dysphagia/Swallowing Diagnosis and Therapy

National Government Solutions Inc
  • LCD L33580, Speech Language Pathology
  • LCD L33631, Outpatient Physical and Occupational Therapy Services

Noridian Healthcare Solutions, LLC
  • LCA A52773, Billing and Coding: Billing and Coding: Therapy Evaluation, Re-Evaluation and Formal Testing
  • LCA A52775, Billing and Coding: Medical Necessity of Therapy Services
  • LCA A52776, Billing and Coding: Therapy Students and Aides
  • LCA A53304, Billing and Coding: Medical Necessity of Therapy Services
  • LCA A53339, Billing and Coding: Therapy Students and Aides

Novitas Solutions, Inc
  • LCA A54111, Billing and Coding: Speech Language Pathology (SLP) Services: Communication Disorders
  • LCD L35036, Therapy and Rehabilitation Services (PT, OT)
  • LCD L35070, Speech – Language Pathology (SLP) Services: Communication Disorders

Palmetto GBA
  • LCA A53064, Billing and Coding: Outpatient Occupational Therapy
  • LCA A53065, Billing and Coding: Outpatient Physical Therapy
  • LCD L34427, Outpatient Occupational Therapy
  • LCD L34428, Outpatient Physical Therapy
  • LCD L34429, Outpatient Speech Language Pathology

Last Updated Feb 16, 2022