min read

Habilitative vs. Rehabilitative Therapy Billing Differences

Learn the difference between habilitation and rehabilitation, when to use modifier 96 vs 97, and how to meet provider reporting requirements.

Table of Contents
Book a Demo

Habilitative vs. Rehabilitative Therapy Billing Differences

For physical therapy providers, navigating the habilitative vs. rehabilitative billing process can be tricky. Just when you thought things couldn’t become any more complicated, you learn that habilitative and rehabilitative services must be billed separately. There's a lot to sort through when billing, from ever-evolving claims modifiers to ongoing updates to federal regulations.

To ensure proper reimbursement from payers, physical therapists and therapist assistants alike must understand the differences between rehabilitative vs. habilitative services, including how to meet provider reporting requirements. Here’s what you need to know about habilitative vs. rehabilitative care and when to use the appropriate claims modifiers.

What is the Difference Between Rehabilitative and Habilitative?

Though the two may sound similar, there is a difference between habilitation and rehabilitation pertaining to physical therapy. A thorough comprehension of the distinct difference between the two is essential to navigating the documentation and billing processes properly.

Rehabilitative Therapy

Rehabilitative therapy consists of various services that aid in the restoration and improvement of health functions and skills necessary for daily living following an illness or injury.

A quick way to think about this is that rehabilitative therapy helps patients RESTORE functions.

Habilitative Therapy

Habilitative therapy refers to services used to help patients learn, maintain, and improve common skills that have not been acquired at the age-appropriate level, despite being necessary for daily living.

A quick way to think about this is that habilitative therapy helps patients DEVELOP skills.

Rehabilitative and Habilitative PT Services Can Involve the Same Interventions

When discussing habilitative vs. rehabilitative physical therapy services, it’s important to note that the two can involve the same interventions. Both rehabilitative and habilitative PT services can address the same functional outcomes, even in patients with drastically different diagnoses.

However, the difference between the two care plans would be that the treatment goals for each differ due to the specific injuries and conditions the patients are dealing with. Therefore, though the interventions are the same, one is habilitative in nature, while the other is rehabilitative.

How Does the CPT Code Apply To Rehabilitative and Habilitative Physical Therapy?

Despite a comprehensive understanding of how habilitative vs. rehabilitative treatment services work, therapists must also understand how CPT codes apply for reimbursement. To best understand why these services are billed separately, the key is to review the 2017 federal law that mandated separate visit limits for habilitative and rehabilitative services to provide equal coverage.

On January 1, 2018, the Centers for Medicare & Medicaid Services (CMS) introduced modifier 96 and modifier 97 to replace the SZ modifier, which was previously used by PTs to indicate habilitative services.

The differences between modifier 96 vs. 97 are as follows:

  • Modifier 96 is used to identify habilitative services and procedures.
  • Modifier 96 is also to be used in the event that habilitative services rendered can be considered either habilitative or rehabilitative.
  • Modifier 97 is used to identify rehabilitative services and procedures.
  • Modifier 97 is also to be used in the event that rehabilitative services rendered can be considered either rehabilitative or habilitative.

Insurances are increasingly requiring the use of these modifiers so keep your eye out for these changes as time goes on.

When reporting these modifiers to a health plan provider, PT practices should also provide documentation that the services rendered are to help a patient either learn something new or regain a function that was lost. Supplying appropriate reasoning to the modifier listed helps better communicate the patient's treatment plan and reduces billing slowdowns and errors.

Reflecting Type of Service in Your Documentation

As always, proper documentation is key to compliance. Because there can be crossover and even patients who are receiving both types of services, it important to clearly document what you are providing and the intent behind that care. As more insurances ramp up usage of these modifiers, that will be even more important.

Can a Patient Receive Both Types of Services?

It’s also important to note that, in some instances, patients CAN receive rehabilitative and habilitative physical therapy services.

Who Does This Apply To?

The last thing to note when navigating habilitative vs. rehabilitative billing is that not all health plans will utilize separate visit limits for billing as listed above. Only individual and small group plans in compliance with the Affordable Care Act (ACA), Medicaid managed care, and individuals recently eligible for Medicaid due to expansion are required to provide separate visit limits.

The visit limit requirement does not apply to self-funded small group or large group health plans, grandfathered health plans, traditional Medicaid, and Medicare. With such a division in requirements, PT professionals should always communicate with payers to understand visit limits for each type of service as well as their individual protocol for modifiers 96 and 97.

The Bottom Line

Ongoing changes in coding can be quite a challenge. To help avoid costly errors with your billing documentation processes, invest in trusted EMR billing software that works hand-in-hand with scheduling modules to ensure each patient visit is billed correctly. With MWTherapy, all necessary tools are housed under one product suite to make full compliance a total breeze.

Don’t slow down your reimbursement with confusion over habilitative vs. rehabilitative billing processes. Learn how MWTherapy’s robust billing software can help simplify and safeguard your billing and documentation by scheduling a demo today.

Related Resources

No items found.
No items found.

Join us for a fast demo

The path to an automated PT practice starts right here, right now. We invite you to join us for a personalized demo.