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Dementia Capable Care and Medicare Documentation

As we head toward the end of the year, there’s a new twist on the Part B therapy cap exceptions process that takes effect October 1, 2012 and runs through December 31, 2012 and involves an additional level of documentation review. 

Currently the therapy cap is $1,880 for occupational therapy (OT) alone, and physical therapy (PT) and speech therapy (ST) share a cap of $1,880.

Is your documentation ready for this? Of course it is! Let’s talk about how implementing services for persons with dementia using the Dementia Capable Care approach fits right into Medicare guidelines.

Reason for Referral

Remember to use Medicare language whenever possible in your documentation. Persons with dementia frequently have several conditions that necessitate our services. Some of those conditions require therapy services for rehabilitation and others for habilitation. For reason for referral, use language such as to improve, maximize, or maintain function.

Avoid statements such as Patient referred for [OT, PT, ST] due to:

  • Recent hospitalization.

  • Decline.

  • New admit to facility.

  • MD orders.

  • Patient/family request.

For example, instead of documenting “Patient referred for therapy due to recent hospitalization,” consider documenting “[OT, PT, ST] needed to [maximize, improve, maintain] patient’s ability to [name the function] to decrease risk of [name the risk].”



Use subjective and objective measures to explain the impact the cognitive impairment is having on the person’s daily function and safety. Dementia Capable Care recommends the following assessments:



Right in the requirements it states that we need to describe the person’s cognitive ability. As you learned in Dementia Capable Care, every person with dementia has remaining abilities. Our job is to identify overlooked potential abilities and describe them.

Always define what the level means: “Patient/client appears to be functioning at least at Allen Cognitive Level [list the Allen level in general], meaning [give a brief description of remaining abilities].”

Use other diagnostic ICD-9 codes in addition to the dementia code as medical diagnoses to show the medical complexity of the person. This may include codes for history of falls, hypertension, osteoarthritis, dysphagia, etc.

Use all the treatment ICD-9 codes that make sense with your goals. Are you treating the person because she’s experiencing weight loss and has poor body alignment? Then use the codes for feeding difficulties and abnormal posture. This indicates how complex the person is and that she requires skills that only a therapist can provide.


  • Using just “oriented x3” as a measure of cognition.

  • Using the same diagnosis code for medical and treatment diagnoses.

  • Neglecting to add other diagnoses in addition to the dementia code.

  • Listing just a number for the person’s cognitive level without a description of his remaining abilities.

  • Listing just the patient’s deficits. (That’s the old paradigm!)


Treatment Notes—Documenting Skilled Services

Think about your treatment session and how you facilitated the person’s functional performance. How did that occur? Use your skill at task analysis and document the technique you used. Maybe it was:

  • Task/work simplification.

  • Environmental modification.

  • Behavior modification.

  • Forward/backward chaining.

  • Chunking.

  • Sequencing.

  • Sensory bridging.

  • Spaced retrieval.

Avoid documenting treatment only as:

  • Ball toss.

  • Watched patient eat lunch.

  • Mod A dressing.

  • Walked 100 feet.

  • Refusals.

  • Resistive behaviors.

For example, instead of documenting “Patient resistive to ADL care even after three cues for encouragement,” consider documenting “[OT, PT, ST] provided sensory bridging technique and one-step-at-a-time cues, resulting in the patient being able to perform [name the function] with [amount of physical assistance needed, if applicable].”


Justification to Continue With Therapy Services

It’s vital to write a good, clear statement to justify the need for continued therapy services. Consider adding an addendum page to the Therapy Cap Exception Request form to explain:

  • Why these additional services are needed. (Example: To assess and establish a functional maintenance program and train the caregivers to promote the patient’s best ability to eat, dress, communicate, safely ambulate, etc.)
  • What the expected outcome of the additional services is. (Example: Patient will demonstrate a reduction in disruptive behaviors during bathing and AM cares.)
  • The condition of the person that indicates the need for continued services. (Example: Patient is presently performing at 25% participation in dressing; patient is capable of 50% participation.)


  • Use Medicare language in your justification statement. (Example: Therapeutic intervention required to assess and develop safe and appropriate interventions based on cognitive abilities to prevent weight loss, falls, disruptive behaviors, and/or excess medication.)

  • To help the reviewer understand why the overage is necessary, indicate whether other disciplines have used a portion of the cap before your services were needed.


  • Use acronyms such as BATF or ACL.

  • Use only a number to indicate a person’s Allen Cognitive Level.

Persons with dementia require special care, techniques, and approaches. Effectively document the services you provide by including the above components in order to ensure that persons with dementia receive the services they so vitally need.