Defining Medically Necessary Physical Therapy Services

Decisions regarding payment for physical therapy services under insurance or third-party benefit plans are typically based on determinations about the medical necessity of the services. Payers may deny services that they determine are not medically necessary using their own, often arbitrary, definitions that are focused more on cost containment than on the appropriateness or value of services and the outcomes they produce. Review of literature demonstrates that there is not one consistent definition of "medical necessity," and the available definitions do not specifically address the physical therapist's role in determining medical necessity for physical therapy services.

The APTA board of directors adopted the Defining Medically Necessary Physical Therapy Services position in August 2011. The definition is intended to provide context to support physical therapists and payers in discussions about medical necessity. References to the standards of practice and, evidence of effectiveness, and an emphasis on identifying impairments, activity limitations, and participation restrictions support these decisions. The definition also makes a clear statement that physical therapists are professionals and must be responsible for the clinical decisions they make.

The position was modeled after Model Contractual Language for Medical Necessity, developed by the Center for Health Policy at Stanford University.1 This language has been in existence for quite some time and is well respected and accepted in health policy venues. The key pillars of the concept presented in this model are authority, purpose, scope, evidence, and value.

Authority
Physical therapy, as part of an individual's health care, is considered medically necessary as determined by the licensed physical therapist based on the results of a physical therapy evaluation.

Purpose
Physical therapy is provided for the purpose of minimizing or eliminating impairments, activity limitations, and/or participation restrictions.

Scope
Physical therapy is delivered throughout the episode of care by the physical therapist or under his or her direction and supervision; requires the knowledge, clinical judgment and abilities of the therapist; takes into consideration the potential benefits and harms to the patient; and is not provided exclusively for the convenience of the patient.

Evidence
Physical therapy is provided using evidence of effectiveness and applicable physical therapy standards of practice.

Value
Physical therapy is considered medically necessary if the type, amount, and duration of services outlined in the plan of care increase the likelihood of meeting one or more of these stated goals: to improve function, minimize loss of function, or decrease risk of injury and disease.

1 Stanford University Center for Health Policy: Model contractual language for medical necessity. Developed at the workshop, Decreasing Variation in Medical Necessity Decision Making. 1999 Mar 11-13; Sacramento (CA). Available at http://www.chcf.org/publications/1999/08/decreasing-variation-in-medical-necessity-decision-making, accessed November 4, 2011.

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