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The rules say that plans must pay for a medical service or item if regular Medicare would pay for it in this case. You can find this rule at 42 Code of Federal Regulations (CFR) Section 422.101.

The rules say that physical therapy (PT), occupational therapy (OT), and speech therapy (ST) services are covered only when they are medically reasonable and necessary. Therapy services are considered reasonable and necessary when: 

1. The services are specific and effective treatment for the patient's condition, 
2. The services require the skills or direct supervision of a therapist, 
3. The amount, frequency, and duration of the services is reasonable under accepted standards of practice, and 
4. The services are needed to address recovery of or improvement in function OR to establish, design, deliver, or carry out a maintenance program. 

Medicare coverage is based not on a patient's potential for improvement, but rather on the patient's need for skilled care. You can find these rules in the Centers for Medicare and Medicaid Services, Internet Only Manual, Medicare Benefit Policy Manual, Chapter 15, Section 220.2. 

The rules say reevaluation provides additional objective information not included in other documentation, such as treatment or progress notes. Reevaluations are distinct from therapy assessments. Assessments are considered a routine aspect of intervention and are not billed separately from the intervention. For example, a patient is being seen in physical or occupational therapy for shoulder pain and limited shoulder functional range of motion due to capsular tightness. Prior to performing shoulder joint mobilizations, the therapist assesses the patient's ROM and pain level/pattern to determine the effect of prior treatment and, if further mobilization is warranted, to determine the appropriate mobilizations. After the mobilizations are completed, the ROM is assessed again to determine the effects of the treatment just performed. The time required to assess the patient before and after the intervention is added to the minutes of the treatment intervention. Consider the following points when billing for a reevaluation. When reevaluations are done for a significant change in condition, documentation must show a significant improvement, decline or change in the patient's diagnosis, condition or functional status that was not anticipated in the current plan of care. When a patient exhibits a demonstrable change in functional ability, a reevaluation may be necessary to revise long term goals and interventions. The plan of care may need to be revised and recertified if significant changes are made, such as a change in the long-term goals. If a patient is hospitalized during the therapy interval, a reevaluation may be medically necessary if there has been a significant change in the patient's condition which has caused a change in function, long term goals, and/or treatment plan. Reevaluations may be appropriate at a planned discharge when documentation supports the medical necessity for the reevaluation service. You can find this information in Medicare's Local Coverage Determination (LCD): Outpatient Physical and Occupational Therapy Services (L33631).

If you want to read these Medicare rules, you can go to this website www.medicareappeal.com.