Outpatient Therapy for Home Health Agencies │ Clinical Consulting Services │ Richter (2023)

With reimbursement rates and profit margins shrinking and unfunded mandates and regulations increasing, home health agencies must look for ways to diversify services all while increasing revenue. One home health service that agencies can offer is home health outpatient therapy, despite it not always being provided in a clinic, hospital or private practice.

What is Home Health Outpatient Therapy?

Home health outpatient therapy differs from therapy services provided under a home health episode of care. Therapy provided to a patient under a home health episode of care is included in consolidated billing under the Patient Driven Groupings Model (PDGM). Payment for outpatient therapy services is not paid under PDGM; instead, reimbursement is calculated using the Medicare Physician’s Fee Schedule (MPFS). In the end, patients do not need to meet the home health definition of homebound status.

Since the reimbursement is calculated using the MPFS, the agency will be reimbursed for 80% of the allowable amount, with the remaining 20% being reimbursed by either supplemental insurance or the patient.

Coverage Guidelines

Claims are submitted under Medicare Part A and reimbursed from Medicare Part B. Therefore, the patient must have both Medicare Part A and Medicare Part B.

Medicare Part B reimburses outpatient PT, OT and SLP services if the services are:

  • provided to a beneficiary who has Part B of the Medicare benefit
  • furnished under the care of a physician, who is certifying the services are medically necessary
  • reasonable and necessary to the treatment of the illness or injury, or to the restoration or maintenance of function affected by the illness or injury, and furnished under a written plan of care (POC)

It is a Medicare requirement that the therapist conduct a thorough evaluation of the patient prior to treatment and that all progress notes be signed by the treating therapist. According to Medicare guidelines, the plan of care must contain all of the following:

  • Diagnosis
  • Treatment modalities or procedures being used for each specific problem
  • Functional goals
  • The type, amount, frequency and duration of each therapeutic modality
  • Rehab potential

Billing Requirements

Outpatient therapy services furnished to a beneficiary by a provider are payable only when furnished in accordance with certain conditions. The following conditions apply:

  • Services are or were required because the individual needed therapy services.
  • A plan for furnishing such services has been established by a physician/NPP or by the therapist providing such services and is periodically reviewed by a physician/NPP.
  • Services are or were furnished while the individual is or was under the care of a physician.
  • In certifying an outpatient plan of care for therapy, a physician/NPP is certifying that the above three conditions are met. Certification is required for coverage and payment of a therapy claim.
  • Claims submitted for outpatient PT, OT and SLP services must contain the National Provider Identifier (NPI) of the certifying physician identified for a PT, OT and SLP plan of care.
  • Claims submitted for outpatient PT, OT and SLP services must contain the required functional reporting.
  • The patient functional limitations(s) reported on claims as part of the functional reporting must be consistent with the functional limitations identified as part of the therapy plan of care and expressed as part of the patient’s long-term goals.
  • The provider must document the number of minutes for each code being billed (as opposed to home health billing in which providers bill for each visit).
  • A progress report must be prepared for every 10 visits or immediately prior to the 30th calendar day (whichever is first).
  • The provider must document every treatment that is provided.
  • PTAs/COTAs can perform services, but they must be supervised.
  • The bill type to be used is 34X on a UB-04.
  • Rev codes are the same as home health.

Outpatient therapy claims are billed using the CMS-1450 (UB40) form with a type of bill – 34X – which designates the claim as a home health visit provided on an outpatient basis. The claim requires the use of a CPT/HCPCS code for each date of service.

Additionally, the therapy cap applies to home health outpatient services. The current annual per-beneficiary therapy cap amount is $2,080 for physical therapy and speech therapy services combined and $2,080 for occupational therapy services.

The Agency's Responsibility

The provider must assume professional responsibility for the services, whether the services are provided by a staff or contracted therapist. The provider must:

  • Accept the patient for treatment in accordance with its admission policies
  • Maintain a complete and timely clinical record on the patient which includes diagnosis, medical history, orders and progress notes relating to all services received
  • Maintain liaison with the attending physician or non-physician practitioner with regard to the progress of the patient and to assure that the required plan of treatment is periodically reviewed by the physician
  • Secure from the physician or non-physician practitioner the required certifications and recertifications
  • See to it that the medical necessity of such service is reviewed on a sample basis by the agency’s staff or an outside review group


  • Check the patient’s eligibility in the common working file to make certain that they are not in an active home health episode. Remember that even if a patient is no longer receiving home health services, the agency must discharge and close the episode of care or outpatient therapy services will be denied as not covered.
  • Always check eligibility and benefits. Medicare has caps on benefits, so make sure your staff knows about them and understands the key details.
  • Therapists should always ask their patient if they are currently receiving home health services or if they have received these services in the recent past. If so, call the HHA to make sure it has completely discharged the patient.
  • Although there is no Medicare requirement for an order, when documented in the medical record, an order provides evidence that the patient both needs therapy services and is under the care of a physician.
  • Most Part B services come with copays, so it’s important to have a process in place to collect. It is easier to collect up front, and doing so reduces the risk of bad debt.
  • Copays will create additional work and bills, so educate and train your staff on how to handle this.

There are several possible reasons why home health outpatient therapy has not been widely pursued in home health care. Many agencies are unaware that they can provide these services. There are also those who are aware but do not understand the reimbursement and billing procedures, because they are completely different from traditional home health episodic billing. Additionally, many home health care agencies may be avoiding providing this Medicare Part B service because the reimbursement is based on the MPFS and is considerably lower than the home health episode per visit rate.

Many agencies do not have therapists on staff and must use contracted therapists; therefore, those agencies cannot afford to pay the same rates for outpatient therapy visits as they do for home health episode visits. Nevertheless, if an agency seeks a way to expand and diversify its service offerings, outpatient therapy is an option worth exploring.

A patient does not have to be homebound and there is no face-to-face requirement. Remember that the patient must be completely discharged from Part A home health care services. This means that they cannot be receiving nursing or any therapy or aide services through their home health benefit.

Home Health Outpatient Therapy Coverage Guidelines


Beneficiary Fact Sheet on Medicare Limits on Therapy Services


Medicare Benefit Policy Manual


Outpatient Therapy for Home Health Agencies │ Clinical Consulting Services │ Richter (2)

Contact Richter Healthcare Consultants:

Do you have questions about home health outpatient therapy, or other clinical challenges? Call Richter’s clinical education consultants at 866-806-0799 to schedule a free consultation.

Deborah Collum is the Manager of Home Health and Hospice with Richter.



When Should rehabilitation take place in an outpatient setting? ›

You will often need outpatient rehab if you have a serious illness like a heart attack, stroke, or cancer. In these cases, your treatment will usually start in the hospital. When you start to get better, you will likely change to a program of occupational and physical therapy.

What is inpatient physiotherapy? ›

The inpatient service provides expert physiotherapy assessment, treatment and advice for all inpatients that require physiotherapy to facilitate recovery following acute illness or surgery and to facilitate discharge home or onward referral for rehabilitation.

What is the purpose of outpatient therapy? ›

Outpatient treatment offers a variety of non-residential services and programs to meet the client's treatment needs. Services involve case management, treatment planning, individual and group counseling, family therapy, patient education, crisis intervention, recovery services and discharge planning.

What are the 4 types of physiotherapy? ›

Some of the modes of treatment in physiotherapy are:

Manual therapy. Transcutaneous electrical nerve stimulation (TENS) therapy. Magnetic therapy. Dry needling and acupuncture.

What are the 5 types of physiotherapy? ›

Sports physiotherapy is a special branch of physiotherapy that deals with sports professionals and athletes.
Musculoskeletal physiotherapy can increase mobilisation, decrease pain, rectify injuries, and treat soft-tissue damage.
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Is a physiotherapist a real doctor? ›

No, Physiotherapists can not use the prefix 'Dr'. The physiotherapists are rehabilitation professionals who are registered with the Rehabilitation Council of India.

What are the three types of outpatient? ›

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9 Common outpatient surgeries you may encounter in your career
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What is another name for outpatient care? ›

Ambulatory patient services, also called outpatient care.

What are the five main types of outpatient services? ›

What are the five main types of hospital-based outpatient services?
Terms in this set (25)
  • Wellness and Prevention (counseling)
  • Diagnosis (lab tests)
  • Treatment (surgery)
  • Rehabilitation (PT)

Is outpatient the same as therapy? ›

Standard outpatient treatment involves regular visits to the outpatient clinic, treatment center, or hospital, as outlined by the patient's personalized care plan. Therapy sessions are scheduled around the patient's work, school, and other responsibilities.

What is considered an outpatient? ›

You're an outpatient if you're getting emergency department services, observation services, outpatient surgery, lab tests, X-rays, or any other hospital services, and the doctor hasn't written an order to admit you to a hospital as an inpatient.

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6 Common Types of Physical Therapy You Should Know
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What is the most common type of physical therapy? ›

The most popular physical therapy specialty is orthopedic physical therapy, which involves treating conditions of the bones, muscles, ligaments, tendons and joints.

What is the highest paying physical therapy specialty? ›

Here are five types of high-paying specialties for physical therapists:
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What body parts do physical therapist treat? ›

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What is OT vs PT? ›

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Is a physiotherapist better than a doctor? ›

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Why are physiotherapists not called Doctors? ›

In view of the above, it is stated that the physiotherapist is not allowed to practice medicine and / or to prescribe drugs especially the Scheduled Drugs as mentioned in the Drugs and Cosmetics Act on their own as they do not possess recognised qualification as mentioned in Indian Medical Council Act, 1956, Indian ...

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Physiatrists and physical therapists treat patients with the same types of conditions. However, physiatrists are physicians who have completed medical school plus four years of residency training. A common misconception of physiatrists is that they are the ones who are actually performing the therapies.

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In an ideal world, rehabilitation begins as soon as the survivor is medically stable. No patient should be kept in an acute hospital setting or a nursing home any longer than necessary. Combining the brain's natural healing process with rehabilitative therapy is crucial to the success of one's recovery.

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The process of rehabilitation should start as early as possible after an injury and form a continuum with other therapeutic interventions. It can also start before or immediately after surgery when an injury requires a surgical intervention.

When should rehabilitation services begin? ›

Rehabilitation services begin: 1. When the patient enters the health care system.

When should you start your rehabilitation Programme? ›

By starting proper physical therapy as soon as it is safe and possible after an injury occurs, patients can dramatically reduce their risk of further complications and, in some cases, even speed up their recovery period.

What are the 4 types of rehabilitation? ›

Introduction to Rehabilitation
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  • 3.3 Supportive Rehabilitation.
  • 3.4 Palliative Rehabilitation.

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How many days a week should you do rehab? ›

For a frequency of 2 or 3 days per week, a standard doctor's prescription or reference to physical therapy. Although due to diagnosis and degree of injury or illness, each person's frequency can vary, you can usually count on being asked to attend therapy with this consistency.

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The 60% Rule is a Medicare facility criterion that requires each IRF to discharge at least 60 percent of its patients with one of 13 qualifying conditions.

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According to Hayward, the most difficult part of the rehab process was mental, not physical. “The hardest part of the whole process has been the mental challenge… I think you find the fight within yourself.”

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Principles of Rehabilitation
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  • Time.
  • Educate.
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Common situations where a rehabilitation hospital is the best choice for patient care include: Recovery from a stroke, brain injury, or related incident. Recovery from major surgery such as a hip replacement or knee replacement. Recovery from amputations.

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What are the three types of rehabilitation? ›

The three main types of rehabilitation therapy are occupational, physical and speech. Each form of rehabilitation serves a unique purpose in helping a person reach full recovery, but all share the ultimate goal of helping the patient return to a healthy and active lifestyle.

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A short term stay could just be 5 to 7 days of detox and physical stabilization. Long term inpatient treatment translates to anywhere from 60 to 90 days or longer. The average length of a stay in an inpatient treatment center is about 28 days.

Should rehab be done everyday? ›

Your body needs time to rest and heal, and going through your exercises every day doesn't provide the break your body needs. On the other hand, if you have a few different exercises, your provider may allow you to split them up and do them on alternating days.

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3 “P's” for Recovery: Passion, Power and Purpose.

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