Rehabilitative Services (Chapter 47) - Medicaid
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State rules governing Medicaid-covered rehabilitative services for individuals with mental illness or substance use disorders in Alabama, including provider, eligibility, documentation, payment, and confidentiality requirements; applies to providers participating in Alabama Medicaid.
No material clinical or coverage changes in this revision.
Coverage Criteria
General coverage criteria
Covered when ALL of the following are met
See Provider Manual Chapter 105 for service-specific criteria and benefit limits.
See Rule No. 560-X-47-.02 for full eligibility requirements.
Providers must comply with Rule No. 560-X-47-.03 and related Provider Manual requirements.
Diagnosis eligibility
Diagnosis and population-specific rules
Per Rule No. 560-X-47-.02(2).
For children under 21 and adults receiving DHR protective services, the only Z code covered for reimbursement is Z65.9 (problem related to unspecified psychosocial circumstances).
The policy excludes most ICD-10 Z codes from coverage for adult rehabilitative treatment services. An exception is made for the intake evaluation and diagnostic assessment, which will be covered even if the resulting diagnosis is a Z code. For services to children under 21 and for adults receiving DHR protective services, the only Z code explicitly reimbursable is Z65.9 (problem related to unspecified psychosocial circumstances). These rules apply to treatment eligibility and must be applied when determining whether rehabilitative services meet the diagnosis requirement for coverage.
Coding and Billing
| Medicare Physician Fee Schedule rates | Procedure codes with an assigned Medicare rate (i.e. CPT codes) will use current published Medicare Physician Fee Schedule Rate for Alabama. |
| HCPCS (no Medicare rate) | Procedure codes without an assigned Medicare Rate on the Physician Fee Schedule (i.e. HCPCS) reimbursed 'By Report' (percentage of billed charges calculated from prior state fiscal year data). |
| Z65.9 | Problem related to unspecified psychosocial circumstances — covered for children under 21 or adults receiving DHR protective services. |
Provider Requirements and Actions
Obtain DMH approval to participate
Providers must submit an application to and receive approval from the Alabama Department of Mental Health (DMH) to provide mental health rehabilitative services under the Medicaid Rehabilitative Option program; substance abuse entities must be certified by DMH and must also submit an application and receive DMH approval to provide Substance Abuse Rehabilitative Services under the Medicaid Rehabilitative Option program.
Limit services to those in Provider Manual Chapter 105
Only rehabilitative services delineated in the Alabama Medicaid Agency Provider Manual, Rehabilitative Services, Chapter 105 qualify for reimbursement; providers must follow the manual for complete service descriptions and benefit limitations.
Include minimum documentation elements in each client record entry
Each client's record entry for every session, service, or activity submitted for Medicaid reimbursement must include: identification of the specific service rendered; the date and amount of time services were rendered; the signature of the staff person who rendered the services; identification of the setting in which services were rendered; and a written assessment of the client's progress or lack thereof related to identified clinical issues. The author of each entry must be identified and must authenticate the entry consistent with Chapter 1 signature requirements.
- Identification of specific services rendered
- Date and amount of time services were rendered
- Signature of the staff person who rendered services
- Identification of the setting for services
- Written assessment of client progress or lack thereof
- Author identified and entry authenticated per Chapter 1
Maintain documentation to avoid recoupment
When clinical records are audited, Medicaid will apply the minimum documentation standards from Rule 560-X-47-.05(2); documentation failing to meet those standards will result in recoupment of payments.
Grant audit access and retain records for 3 years + current
Providers must make available at no charge all information regarding claims submitted and paid and must permit access to all records and facilities for claims audit, program monitoring, and utilization review by authorized federal and state representatives. Records shall be retained for a period of three years plus the current year and/or until completion of any audit. Certain services do not require recipient signatures (see list in Rule 560-X-47-.11(2)).
- Provide records and facility access at no charge for audits and monitoring
- Retain records for three years plus the current year or until audit completion
- Recipient signature exceptions include Treatment Plan Review, ACT, PACT, Behavioral Health Placement Assessment, crisis intervention, psychoeducational services, Mental Health Care Coordination, and non-face-to-face telephone services
Risk of recoupment and audit findings for inadequate records
Failure to maintain complete and accurate rehabilitative and fiscal records for the retention period that fully disclose the extent of services may lead to recoupment of payments and adverse audit findings.
Definitions
Level of Care Criteria
Outpatient/Rehabilitative services (community-based)
Providers must meet the provider-type criteria and both additional requirements (4) and (5) in Rule No. 560-X-47-.03.
A complete description of each covered service and benefit limitations is in Provider Manual Chapter 105 (Rule No. 560-X-47-.06).
See Rule No. 560-X-47-.03(4).
Failure to maintain quality, access, or documentation may result in recoupment or loss of reimbursement (see Rule No. 560-X-47-.03(5) and documentation requirements).
Treatment Modalities
Community rehabilitative behavioral health services
Medicaid does not cover all listed services but the provider must demonstrate capacity to provide them (Rule No. 560-X-47-.03 and Rule No. 560-X-47-.06).
Benefit Limits and Visit Rules
Background
Rehabilitative services are defined as specialized medical or remedial services provided by qualified practitioners to treat or rehabilitate individuals with mental illness or substance use disorders. Coverage is limited to Medicaid-eligible individuals with a qualifying diagnosis assigned by an authorized clinician and services must be delivered based on medical necessity. Direct services may be provided in community or home settings that are therapeutically appropriate and respect privacy, and providers must meet applicable certification and compliance requirements to participate in Alabama Medicaid.
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