Billing and Coding: Therapy Evaluation, Re-Evaluation and Formal Testing

Therapy evaluation and formal testing services involve clinical judgment and
decision-making which is not within the scope of practice for therapy
assistants. These services can only be provided by qualified clinicians i.e.,
a physician, non-physician practitioner (NPP), therapist or speech-language
pathologist (SLP).  
  
Therapy evaluation, re-evaluation, and formal testing codes can only be billed
when the medical record supports the completion of a medically  necessary
comprehensive evaluation or formal test. Documentation must support that the
service was based on the patient's current clinical status or condition.
Medicare does not reimburse for services related solely to workplace skills
and activities. Additional evaluative services may be necessary when an
episode of care is interrupted by a short-stay inpatient hospitalization or
outpatient surgery that could reasonably impact the patient's therapy
progression. Note that routine continuous assessment of the patient's expected
progress in accordance with the plan of care is not separately reimbursable as
a re-evaluation or formal testing service.  
  
 **Initial Evaluations** \- (i.e., CPT  97161-97163, 97165-97167)  
Providers may simultaneously receive multiple physician referrals for multiple
medical conditions for one patient. When this occurs, it is expected that one
qualified clinician from each appropriate discipline i.e., physical therapist
(PT), and/or occupational therapist (OT), and/or SLP, will complete a thorough
initial evaluation that encompasses each of the identified medical conditions.
Following completion of the initial evaluation, other staff therapists
specializing in specific medical conditions may treat the patient as needed.
When medical necessity is supported, an initial evaluation is appropriate for:  
  
 A new patient who has not received prior therapy services.  
 A patient who has returned for additional therapy after having been
discharged from prior therapy services for the same or for a different
condition. Time spent evaluating this returning patient should not be coded as
a re-evaluation. Prior discharge may have been due to one of the following:  
  

    * Patient no longer significantly benefited from ongoing therapy services or;
    * Patient no longer required therapy services for an extended period of time or;
    * Patient experienced a significant change in medical status that necessitated discharge.

  
 A patient who is currently receiving therapy services and develops a newly
diagnosed unrelated condition. Example: A patient is currently receiving
treatment following a total knee arthroplasty (TKA). During the therapy
episode of care for the TKA, the patient develops an acute rotator cuff injury
from an accident at home. The clinician determines that the rotator cuff
injury is not related to the TKA. Therefore, it is reasonable for the
clinician to provide and code for a new evaluation of the rotator cuff injury
since it is a newly identified diagnosis for an unrelated condition.  
  
For additional information, see the attached _" Medical Necessity of Therapy
Services"_ article in the Related Coverage Documents link below.  
  
**Re-Evaluations** \- (i.e., CPT  97164, 97168)  
Re-evaluations are separately reimbursable when the medical record supports
that the patient's clinical status or condition required the additional
evaluative service. When medical necessity is supported, a re-evaluation is
appropriate and is separately billable for:  
  
 A patient who is currently receiving therapy services and develops a newly
diagnosed related condition e.g., a patient that is currently receiving
therapy treatment for TKA. During the episode of care, the patient develops
wrist pain. The clinician determines that the wrist pain is due to use of a
walker which the patient is using as a result of the TKA. In this scenario,
the wrist pain is a condition that is related to the TKA. Therefore, it is
reasonable for the clinician to provide a re-evaluation of the patient due to
this related condition.  
 A patient who is currently receiving therapy services and demonstrates a
significant improvement, decline, or change in condition or functional status
which was not anticipated in the plan of care and necessitates additional
evaluative services to maximize the patient's rehabilitation potential.

Note that routine continuous assessment of the patient's expected progress in
accordance with the plan of care is not considered to be a medically necessary
service and is not separately reimbursable as a re-evaluation. Limited routine
assessment (e.g., for progress reporting) is a component of ongoing therapy
services and is included in services and procedures.  
  
 **Formal Testing** (i.e., CPT  97750, 95851-95852)  
Formal testing services are considered inclusive (not separately reimbursable)
when they are provided on the same day as an initial evaluation or re-
evaluation service. Formal testing services are separately reimbursable when
the medical record supports that the patient's clinical status or condition
required the additional testing service. Formal testing services should not be
billed using therapy service or procedure codes. When medical necessity is
supported, a formal test is appropriate and is separately reimbursable when
documentation supports the completion of a formal, date signed, distinctly
identifiable findings report which includes:  
  
 Testing and/or measurement results with comparative values for specific
standardized grading scales.  
 Provider's interpretation of results.  
 Support of how the findings were incorporated into the therapy plan of care,
when applicable.

Note that routine continuous assessment of the patient's expected progress in
accordance with the plan of care is not considered to be a medically necessary
service and is not separately reimbursable as a formal test. Limited routine
assessment (e.g., for progress reporting) is a component of ongoing therapy
services and is included in services and procedures.  
  
**_Sources_** :  
 _Current Procedural Terminology (CPT) Manual_  
 CMS Internet Only Manual (IOM), [Medicare Benefit Policy
Manual](https://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/Downloads/bp102c15.pdf), Publication 100-02, Chapter
15, Sections 220(A), 220.3.5(A), 230.1  
 IOM, [Medicare Benefit Policy Manual,](https://www.cms.gov/Regulations-and-
Guidance/Guidance/Manuals/Downloads/bp102c16.pdf), Publication 100-02, Chapter
16, Section 150