By Direct Care Training & Resource Center, Inc.
In the dynamic and evolving field of residential care—especially in settings such as Adult Foster Care, Medical Foster Care Homes, and other community-based alternatives—there is often a need to clearly distinguish between informal resident engagement activities and billable skilled interventions. Misunderstanding this difference can result in regulatory missteps, billing inaccuracies, or even ethical concerns. As a provider of training and guidance for care organizations, Direct Care Training & Resource Center, Inc. believes this clarification is both timely and essential.
Residential Activities: Social Engagement, Not Clinical Treatment:
When “activities” are listed among the services provided in a residential environment, the term most often refers to social and recreational engagements facilitated by direct care workers or aides. These include activities such as card games, puzzle-solving, music listening, movie nights, or guided walks. Their primary function is to kill time constructively, stimulate the minds of residents, and promote camaraderie within the domicile.
According to the Centers for Medicare & Medicaid Services (CMS), these types of interventions fall under “routine services” in non-skilled residential settings. CMS Publication 100-02, Chapter 8, outlines that activities intended for diversion, social stimulation, or general recreation are part of basic room and board—not skilled care—and therefore not separately billable under Medicaid or Medicare. Note that this is what is referred to when most provides indicate unskilled activities occur in the residence.
Furthermore, the Adult Foster Care Licensing Rules in states like Michigan and Minnesota define “resident activities” as opportunities provided for social interaction and quality of life enhancement, not clinical rehabilitation, or therapy. These informal activities are integral to daily living but are distinctly non-clinical in nature. When insurance adjusters attempt to lop them altogether with outpatient skilled therapies, as unbillable items, the likelihood of misrepresentation exists.
Therapeutic Services: A Higher Clinical Standard:
On the other hand, skilled therapeutic interventions—such as those delivered in Neurological Cognitive Day Treatment, Vocational Rehabilitation, or Recreational Therapy programs—are rooted in individualized treatment plans and overseen by licensed professionals. These services are designed to meet clinical objectives, such as improving memory, building coping skills, restoring mobility, or enhancing employability.
The American Medical Association (AMA) assigns distinct Current Procedural Terminology (CPT) codes to these services, such as CPT 97129/97130 for cognitive treatment and CPT 97537 for community/work reintegration training. These codes are billable under both public and private insurance systems only when the service meets medical necessity standards and is delivered by qualified personnel.
Vocational Rehabilitation, defined under the Rehabilitation Act of 1973 (29 U.S. Code § 701 et seq.), involves targeted interventions to prepare individuals for employment and independence. It includes structured tasks, adaptive skills training, and performance evaluations—none of which can be casually equated with informal residential activities.
Recreational Therapy is likewise a licensed discipline, often requiring certification through the National Council for Therapeutic Recreation Certification (NCTRC). When prescribed, it involves measurable outcomes and is often coordinated with physicians or mental health professionals.
Why the Distinction Matters: Ethical, Financial, and Legal Implications:
Failure to distinguish between informal activities and formal therapy can lead to false claims, overbilling, or denied reimbursements and insurer malfeasance when they deliberately mischaracterize a service to avoid payment. Under the False Claims Act (31 U.S.C. §§ 3729 – 3733), any provider that knowingly submits a fraudulent healthcare claim may face severe civil penalties.
Moreover, conflating these roles can mislead families and guardians about the level of care being delivered. Transparency not only helps providers maintain regulatory compliance but also strengthens trust with the care recipient community.
Our Final Thoughts…
At Direct Care Training & Resource Center, Inc., we continue to educate caregivers, administrators, and consultants on the intricacies of service delivery and billing in residential care. It is critical that we do not misrepresent compassionate, informal resident engagement as clinical care, no matter how beneficial the interaction may be.
Activities that fill time, spark joy, and create human connection are vital. But they are not therapy.
Another Blog Post by Direct Care Training & Resource Center, Inc. Photos used are designed to complement the written content. They do not imply a relationship with or endorsement by any individual nor entity and may belong to their respective copyright holders.
| Follow us in the Social Stratosphere… | ||||
|
