In Skilled Nursing Facilities (SNFs), therapy services—physical, occupational, and speech therapy—play a vital role in resident recovery, rehabilitation, and quality of life. However, beyond achieving clinical outcomes, therapy departments must navigate a complex landscape of regulatory requirements and compliance standards. Failing to align therapy services with these regulations can lead to survey deficiencies and denied reimbursement.

In this first of two articles, we will explore the value of therapy compliance in SNFs, and the steps that can be taken to decrease future risk.

Skilled therapy services are still the primary reason for skilled services. The Patient-Driven Payment Model (PDPM) significantly changed how therapy services are reimbursed under Medicare Part A. Rather than basing reimbursement on the volume of therapy minutes, PDPM emphasizes resident clinical characteristics and outcomes.  However, the rationale for skilled therapy and documentation standards has not changed.

Understanding Therapy Compliance in a Regulatory Context

The Centers for Medicare & Medicare Services (CMS) states that skilled therapy services must meet the following conditions:

• The services must be directly and specifically related to an active written treatment plan;
• The services must be of a level of complexity and sophistication or the condition of the patient must be of a nature that requires the judgment, knowledge, and skills of a qualified therapist;
• The services must be considered under accepted standards of medical practice to be a specific and effective treatment for the patient’s condition; and,
• The services must be reasonable and necessary for treating the patient’s condition; this includes the requirement that the amount, frequency, and duration of the services must be reasonable.

Documentation must support these conditions through the plans of care and further sources of documentation and billing, or it may put your facility at risk.

Some of the risks involved with poor documentation:

• Billing Denials and Payment Recoupment: CMS may deny claims retroactively if documentation doesn’t support the services billed.
• Survey Citations: Inaccurate care plans or gaps in therapy delivery can lead to deficiencies, potentially lowering a facility’s CMS Five-Star rating.
• Increased Audit Risk: Inaccurate billing or poor billing standards may trigger a CMS audit through a Medicare Administrative Contractor, Recovery Audit Contractor, or other external reviews.
• The Office of Inspector General (OIG) continues to monitor SNFs for improper billing, and insufficient documentation. Facilities may be flagged for further investigation or subject to repayment demands if noncompliance is detected.

By aligning therapy practices with regulatory expectations, SNFs can safeguard reimbursement, minimize risk, and—most importantly—provide residents with the skilled, effective care they deserve.

An external therapy audit can be an integral part of a comprehensive compliance plan.  Blue & Co. will complete audits, review findings, and train and educate staff as part of an improvement plan.

Blue & Co. offers a team of highly knowledgeable consultants dedicated to supporting your Post-Acute Care needs. Whether you require assistance with Therapy Operations, Clinical Reviews, Payroll-Based Journal (PBJ) reporting, 5-Star ratings, regulatory surveys, Value-Based Purchasing (VBP), or MDS support, our experts are here to help. Please contact a member of our Post-Acute Care team below or reach out to your local Blue & Co. advisor for personalized guidance.

Landon Hackett, CPA, MSA, Director

Liz Barlow, RN, CRRN, RAC-CT, DNS-CT, QCP, Senior Consultant