CORF & Rehab Agencies Part II: Billing Guidelines

The terms CORF and rehab agency are sometimes confusing and can even be mistaken for one another. In Part One, we examined what is CORF (comprehensive outpatient rehabilitation facility) and what is a rehabilitation agency (sometimes called an ORF). In this article, we’ll discuss the billing requirements for both.

The CMS (Centers for Medicare & Medicaid) chose the HCPCS (Healthcare Common Procedure Coding System) as the uniform coding system to be used when reporting CORFs and Rehab agencies. As of January 1st, 1999, the Medicare Physician Fee Schedule (MPFS) became the method of payment for outpatient physical therapy services furnished by CORFs and rehab agencies.

Please Note: The Medicare allowed charge for the services is the lower of the actual charge or the MPFS amount. The Medicare payment for the services is 80 percent of the allowed charge after the Part B deductible is met. Coinsurance is made at 20 percent of the lower of the actual charge or the MPFS amount. The general coinsurance rule (20 percent of the actual charges) does not apply when making payment under the MPFS. This is a final payment. The MPFS does not apply to outpatient rehabilitation services furnished by critical access hospitals (CAHs). CAHs are to be paid on a reasonable cost basis.

While CORF’s and rehab agencies are different provider types and submit claims on different types of bills, the physical therapy services that are
considered reimbursable are much the same. Neither CORFs nor rehab agencies are part of an outpatient hospital therapy department.


A CORF’s purpose is to permit the beneficiary to receive multidisciplinary rehabilitation services at a single location in a coordinated fashion. Section 1861 (cc) of the Social Security Act specifies that no service may be covered as a CORF service if it would not be covered as an inpatient hospital service when provided to a hospital patient. (This does not mean that the beneficiary must require a hospital level of care or meet other requirements unique to hospital care), but rather only that the service would be covered if provided in a hospital.

CORFs use a 75x type of bill when submitting claims to Medicare. The CORF services are subject to the Medicare Part B deductible and coinsurance provisions. The CORF may bill the beneficiary only for the unmet portion of the deductible and 20 percent of the fee schedule amount for covered services.

Certification is required for coverage and payment of a therapy claim. CORF claims must contain the National Provider Identifier (NPI) of the certifying physician identified for a PT, OT, and SLP POC.

To become a patient of a CORF, the beneficiary must be under the care of a physician who certifies that the beneficiary needs skilled rehabilitation services. The referring physician must advise the CORF of the beneficiary’s medical history, current diagnosis and medical findings, desired rehabilitation goals, and any contraindications to specific activity or intensity of rehabilitation services. If the rehabilitation goals for physical therapy, occupational therapy, speech-language pathology or respiratory therapy services are not specified by the referring physician, the CORF physician must establish them.

The CORF physician or the referring physician for physical therapy, occupational therapy and speech-language pathology services, must review the plan of treatment at least once every 90 days certifying that the patient needs or continues to need skilled rehabilitation services, the rehabilitation plan of treatment is being followed and that the patient is making progress in attaining the established rehabilitation goals. The 90-day period begins with the first day of rehabilitation therapy. For respiratory therapy services, the CORF physician or the patient’s referring physician must review the rehabilitation plan of treatment at least every 60 days. The 60-day period begins with the first day of respiratory therapy treatment. (For survey and certification the plan of treatment review must meet the requirements at 42CFR 485.58(b)). When the patient has reached a point where no further progress is being made toward one or more of the rehabilitation goals, or the skills of a therapist are no longer required, Medicare coverage ends with respect to that aspect of the rehabilitation plan of treatment.

The payment basis for CORF services is 80 percent of the lesser of: (1) the actual charge for the service or (2) the physician fee schedule amount for the service when the physician fee schedule establishes a payment amount for such service.

Payment for CORF services under the physician fee schedule is made for physical therapy, occupational therapy, speech-language pathology and respiratory therapy services, as well as the nursing and social and/or psychological services, which are a part of, or directly relate to, the rehabilitation plan of treatment.

Payment for covered durable medical equipment, orthotic and prosthetic (DMEPOS) devices and supplies provided by a CORF is based upon: the lesser of 80 percent of actual charges or the payment amount established under the DMEPOS fee schedule; or, the single payment amount established under the DMEPOS competitive bidding program, provided that payment for such an item is not included in the payment amount for other CORF services.

If there is no fee schedule amount for a covered CORF item or service, payment should be based on the lesser of 80 percent of the actual charge for the service provided or an amount determined by the local Medicare contractor.

Payment for CORF social and/or psychological services is made under the physician fee schedule only for HCPCS code G0409, as appropriate, and only when billed using revenue codes 0560, 0569, 0910, 0911, 0914 and 0919.

Payment for CORF respiratory therapy services is made under the physician fee schedule when provided by a respiratory therapist as defined at 42CFR485.70(j) and, only to the extent that these services support or are an adjunct to the rehabilitation plan of treatment, when billed using revenue codes 0410, 0412 and 0419. Separate payment is not made for diagnostic tests or for services related to physiologic monitoring services which are bundled into other respiratory therapy services appropriately performed by a respiratory therapist, such as HCPCS codes G0237, G0238 and G0239.

Payment for CORF nursing services is made under the physician fee schedule only when provided by a registered nurse as defined at 42CFR485.70(h) for nursing services only to the extent that these services support or are an adjunct to the rehabilitation plan of treatment. In addition, payment for CORF nursing services is made only when provided by a registered nurse. HCPCS code G0128 is used to bill for these services and only with revenue codes 0550 and 0559.

Rehab Agencies

The majority of Part A providers are rehab agencies. With a rehab agency, the facility agrees that they will not charge the beneficiary for covered services that Medicare should pay. Rehab agencies use a 74x type of bill when submitting claims to Medicare. Medicare covers rehab agency services when:

  • A physician or non-physician practitioner (NPP) clinically certifies the plan of care (POC), ensuring:
    • The patient needs the therapy services
    • A POC is:
      • Established by a physician/NPP, or a qualified therapist providing such services
      • The patient is under physician care while getting services
    • Claims include the POC’s certifying provider’s NPI

Note: You must establish the treatment plan/POC before treatment begins, with just a few exceptions to this rule. At a minimum, the POC needs to contain:

  • Diagnoses
  • Long-term treatment goals
  • Type of rehabilitation therapy services (PT, OT, or SLP) – where appropriate; the type may be a description of a specific treatment or intervention
  • Therapy amount – number of treatment sessions in a day
  • Therapy frequency – number of treatment sessions in a week
  • Therapy duration – total number of weeks or number of treatment sessions

When reporting service units for untimed HCPCS codes (the procedure is undefined by a specific time frame), report “1” in the unit field (for example, HCPCS codes for therapy evaluations, group therapy, and supervised modalities). You will have to report other untimed codes (for example, “add on” codes) based on the number of times the health care professional performed the procedure.

Some HCPCS codes are defined by direct (one-on-one) time spent in patient contact for each 15 minutes. The number of units for these timed codes reported per discipline for each date, regardless of the number of different treatments furnished, is determined by the total treatment time for the timed codes.

Document the total minutes under timed codes in the medical record for each date of service to support the number of units and codes billed. Also, report the total active treatment services minutes, including timed and untimed procedures/modalities.

CMS requires that when you provide only one 15-minute timed HCPCS code in a day, you should not bill that service if performed for less than 8 minutes. When providing more than one unit of service, the initial and subsequent service must each total at least 15 minutes, and the last unit may count as a full unit of service if it includes at least 8 minutes of additional services. Do not count all treatment minutes in a day to one HCPCS code if more than 15 minutes of one or more other codes are furnished.

If a therapist furnishes four distinct, separate 8-minute treatments (32 treatment minutes total), do not report four 15-minute treatment units on the claim. In this circumstance, you may report only two units (at least 23 minutes but less than 38 minutes). You may report a third unit when you furnish a total of 38 through 52 minutes; and, a fourth unit may be billed if you deliver at least 53 but less than 68 minutes of treatment. Do not report units on the claim that exceed the total treatment minutes for the timed codes.

If you report both timed and untimed codes on the same claim, do not count time spent on untimed code services toward the timed-code services.

All claims for outpatient therapy service must report a therapy modifier (GP, GO, GN) along with the HCPCS code to indicate the treatment plan discipline (PT, OT, SLP). Also, certain HCPCS codes require certain therapy modifiers.

Billing for CORFs and rehab agencies can be complex and the language can often get confusing, especially when it comes to CORFs (as mentioned in Part One of this article). If you have questions about any type of billing issues, please contact StrataPT for straight, honest answers. We pride ourselves in providing PT/OT businesses with unparalleled support and the best customer service in the industry. At StrataPT, we care about your business as if it were our own.

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