Is your practice ready for a Medicare Audit | Initial Eval

Physical Therapy Documentation_Audit-ChecklistIn this second in our series of Blogs asking the question “Is your practice ready for a Medicare audit?” we discuss the critical importance of the PT/OT Evaluation.

Without question, The Initial Evaluation is your first and best tool in establishing and documenting the medical necessity for skilled therapy services.  It is your opportunity to paint a picture of the patients’ medical, physical, psychological, social and living conditions and how their current functional impairment has impacted on their prior level of function in some or all of these areas.

IN LCD L26884 Medicare includes the following description of the Initial Evaluation:

“The initial evaluation establishes the baseline data necessary for assessing expected rehabilitation potential, setting realistic goals and measuring progress.
Initial evaluations need to provide objective, measurable documentation of the patient’s impairments and how any noted deficits affect ADLs/IADLs and result in functional limitations.
Functional limitations refer to the inability to perform actions, tasks and activities that constitute the “usual activities” for the patient.
Functional limitations must be meaningful to the patient and caregiver, and must have potential for improvement. 
In addition, the remediation of such limitations must be recognized as medically necessary.”

In a Review or Audit the Initial Evaluation is an auditor’s introduction to the patient.  It will generally set the tone for all the documentation of treatment that follows.  Therefore, the documentation of the Initial Evaluation should:

Paint a picture of the patient’s impairments and functional limitations requiring skilled intervention.

Describe the prior functional level to assist in establishing the patient’s potential and prognosis.

Document the medical necessity of a course of therapy through objective findings and subjective patient self-reporting.

List the conditions being treated and any complexities that make treatment more lengthy or difficult.

Identify the impact of the conditions and complexities so that it is clear to a medical reviewer that the services planned are appropriate for the individual.

Describe the needs of the patient that require the unique skills of a therapist, including the expertise, knowledge, clinical judgment, decision making and abilities of a clinician that assistants, qualified auxiliary personnel, caretakers or the patient cannot provide independently.

The initial evaluation must be performed by a clinician.  CLINICIAN refers to a physician, non-physician practitioner (physician assistant, clinical nurse specialist and nurse practitioner) or a therapist (but not to an assistant, aide or any other personnel) providing a service within their scope of practice and consistent with state and local law.

“Only a clinician may perform an initial examination, evaluation, reevaluation and assessment or establish a diagnosis or a plan of care.  The clinician may include as part of the evaluation or reevaluation, objective measurements or observations made by a PTA or OTA within their scope of practice, but the clinician must actively and personally participate in the evaluation or reevaluation.  The clinician may not merely summarize the objective findings of others or make judgments drawn from the measurements and/or observations of others.”

In our next Blog we will explore the specific items that must be present in the documentation of an Initial Evaluation (97001 or 97003)
to support medical necessity.   

Genco Healthcare helps practices achieve and maintain a culture of compliance.  We also assist Healthcare Attorneys in defending their clients who have been audited or subject to pre payment review.  Consequently, we have our finger on the pulse of precisely what Medicare’s expectations are when it comes to medical documentation.

For more information contact David Alben at  or 914-713-3606.