Get Ready for New Coding Requirements for Habilitation Services As of Jan. 1, 2017, providers must designate habilitative services on claims to Affordable Care Act–compliant health plans. Here’s what you need to know. Bottom Line
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Bottom Line  |   October 01, 2016
Get Ready for New Coding Requirements for Habilitation Services
Author Notes
  • Daneen Grooms, MHSA, is director of ASHA health reform analysis and advocacy. dgrooms@asha.org
    Daneen Grooms, MHSA, is director of ASHA health reform analysis and advocacy. dgrooms@asha.org×
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Practice Management / Regulatory, Legislative & Advocacy / Bottom Line
Bottom Line   |   October 01, 2016
Get Ready for New Coding Requirements for Habilitation Services
The ASHA Leader, October 2016, Vol. 21, 30-31. doi:10.1044/leader.BML.21102016.30
The ASHA Leader, October 2016, Vol. 21, 30-31. doi:10.1044/leader.BML.21102016.30
Beginning Jan. 1, 2017, reimbursement claims for patients covered through the Affordable Care Act (ACA) must indicate if the treatment is for habilitative—as opposed to rehabilitative—care.
Health care coverage under the ACA’s insurance marketplaces must include rehabilitative and habilitative services in their essential benefits. Each category of service has its own limit on the number of allowed visits. Those visits cannot be combined, so health plans must have a way to track the number of habilitative and rehabilitative sessions for each patient.
The most common method for distinguishing the two types of services is through a habilitative services modifier—SZ—added to the corresponding procedure code on the claim form.
The following information answers questions related to which health plans require the distinction between categories as well as clinical considerations to determine how to categorize services.
Does the separate visit limit requirement apply to all health plans?
The separate visit limits for habilitative and rehabilitative services applies only to ACA-compliant individual and small-group health plans. It does not apply to self-funded small group-health plans, large group-health plans, or grandfathered health plans.
Does the separate visit limit requirement apply to Medicare and Medicaid?
This requirement does not apply to Medicare or traditional Medicaid. However, it does apply to Medicaid managed care and to people newly eligible for Medicaid through Medicaid expansion.
What determines if a service is habilitative or rehabilitative?
Habilitation describes services designed to establish skills that have not yet been acquired at an age-appropriate level. Treatment is provided to facilitate the acquisition of skills through the normal developmental sequence. For example, habilitation would include the speech-language services provided to facilitate the normal development of speech and language skills in a child born with hearing loss. Audiologists are providing habilitative services, for example, when fitting and managing hearing aids or programming cochlear implants.
Rehabilitation refers to re-establishing skills that were acquired at the appropriate age but have been lost or impaired. Audiologic rehabilitation, for example, would include working with an adult with acquired hearing loss on hearing and understanding speech in noisy listening environments using new hearing aids. This treatment may include auditory training in noise as well as practicing a variety of communication strategies.
Speech-language treatment for a child with autism spectrum disorder is habilitative; speech-language treatment for an adult with aphasia following a stroke is rehabilitative.
A child born with severe to profound hearing loss fit with hearing aids receives audiologic habilitation to develop speech and language skills; an adult with hearing loss and tinnitus fit with hearings aids equipped with sound generators receives audiologic rehabilitation to improve listening skills and to cope with tinnitus.

Habilitation describes services designed to establish skills that have not yet been acquired at an age-appropriate level. Rehabilitation refers to re-establishing skills that were acquired at the appropriate age but have been lost or impaired.

Can the same patient receive both types of services?
Yes, a patient may require rehabilitative and habilitative treatment. For example, a 25-year-old woman was diagnosed with congenital hearing loss as a young child, but did not have access to hearing aids until age 10. Her primary language is American Sign Language. She opts for cochlear implant surgery and to learn spoken language. While receiving spoken language services, she develops benign paroxysmal positional vertigo in one ear that requires treatment. In this scenario, language treatment is habilitative and would be billed with the SZ modifier; the canalith repositioning treatment is rehabilitative.
In another example, a 4-year-old is receiving habilitative treatment for delayed language skills. After having a seizure, he develops swallowing difficulties that require rehabilitative treatment. In this scenario, language treatment is habilitative and would be billed with the SZ modifier; the swallowing treatment is rehabilitative and would not require the modifier.
Can I provide habilitation and rehabilitation using the same treatment goals?
No. The treatments should have different goals. Differentiating goals will help clarify to payers that the nature of the services are different even if the same interventions are used.
Habilitative goals must focus on providing a client with new skills, abilities or functions. Rehabilitation must focus on restoration of previous functional abilities.
Is maintenance therapy habilitative or rehabilitative?
Maintenance therapy may be habilitative or rehabilitative, based on the cause of the patient’s impairment in function, which must be accurately documented.
For example, a patient with a progressive neurological condition such as Parkinson’s disease receives rehabilitation treatment to improve declining voice and speech and maintain restored function. A person with Down syndrome, however, receives habilitative language treatment to work in a supported vocational program and to maintain optimal language function in that setting.

Maintenance therapy may be habilitative or rehabilitative, based on the cause of the patient’s impairment in function, which must be accurately documented.

Can I switch to rehabilitation if the patient reaches the habilitation-visit limit?
No, the category cannot be changed unless there are specific clinical reasons to support such a change. It is not appropriate to switch to rehabilitation simply because the patient has reached the habilitation-visit limit. Habilitation (attaining a function) and rehabilitation (regaining a function lost to illness or injury) address different needs and goals.
Switching between habilitation and rehabilitation to circumvent visit limits would be an unethical reimbursement practice and would likely be considered fraud.
How will I know if a patient is enrolled in an ACA-compliant health plan?
All providers should verify a patient’s insurance eligibility and benefits before providing services by checking the health plan’s website or contacting a benefits representative.
Does every ACA-compliant plan use the SZ modifier to distinguish habilitative services?
Each plan may have its own system for implementing and tracking visits. Providers need to check with each ACA-compliant health plan for specific details, including which providers are required to report habilitative services and if the plan uses the SZ modifier.
Why is this happening?
This new federal requirement is intended to enforce the requirement that ACA-compliant health plans provide equal coverage for habilitative and rehabilitative services and count the rehabilitative and habilitative visits separately.
Where can I find more information?
ASHA’s comprehensive advocacy guide, “Essential Coverage: Rehabilitative and Habilitative Services and Devices,” provides clinical examples demonstrating when rehabilitative and habilitative audiology and speech-language pathology services are medically necessary. It also explains the role of audiologists and SLPs in providing services to patients who require habilitation and rehabilitation services.
Check the coding and reimbursement section of the ASHA website, where additional information will be posted when available.
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October 2016
Volume 21, Issue 10