Modifier 97- Rehabilitative Services

Identifies services provided to help a patient restore, improve, or regain functional abilities that have been lost or impaired because of illness, injury, surgery, or another health condition.

What Is Modifier 97?

Modifier 97 identifies rehabilitative services. Rehabilitation focuses on restoring or improving a function or skill that a patient previously possessed but lost or impaired because of an illness, injury, surgery, disability, or other medical condition.

The modifier is especially important when distinguishing rehabilitative treatment from habilitative services, which are reported with Modifier 96. Habilitation generally helps a patient acquire or develop skills or functions that have not previously been attained, while rehabilitation focuses on recovering or improving previously established function.

Modifier 97 was added to the HCPCS modifier set alongside Modifier 96 and remains relevant for identifying rehabilitative services when required by the patient's health plan or applicable billing policy. CMS added Modifiers 96 and 97 to its valid modifier processing effective January 1, 2018.

Modifier 97 describes the nature and purpose of the service. It does not replace Medicare's discipline-specific therapy modifiers such as GP, GO, or GN when those modifiers are required.

When to Use Modifier 97

Restoring Lost Function: Treatment is intended to restore an ability the patient previously had but lost or impaired because of a medical condition.

Post-Injury Rehabilitation: Therapy is provided to restore strength, mobility, coordination, communication, or another function following an injury.

Post-Surgical Rehabilitation: Treatment helps the patient regain function after surgery when skilled rehabilitation is medically necessary.

Recovery From Illness: The patient requires skilled services to regain functional abilities affected by an illness or medical condition.

Payer Requires Identification: The patient's insurance plan requires Modifier 97 to distinguish rehabilitative services from habilitative services.

Qualifying Therapy Service: The underlying CPT or HCPCS code accurately represents the rehabilitative treatment provided.

When NOT to Use Modifier 97

Habilitative Services: Use Modifier 96 when the applicable payer requires identification of services intended to help a patient develop or acquire a function or skill that was not previously established.

Maintenance Alone: Do not automatically use Modifier 97 merely because a service involves ongoing therapy. The service and treatment goals must support the applicable rehabilitative classification.

No Rehabilitation Purpose: A service performed for a purpose unrelated to restoring or improving impaired function should not be classified as rehabilitative solely because a therapy-related code is reported.

Incorrect Underlying Code: Modifier 97 does not correct an inaccurate CPT or HCPCS code.

Payer Does Not Require It: Modifier requirements can vary among Medicare, Medicaid, and commercial health plans. Do not assume every payer requires Modifier 97 on every rehabilitation claim.

Billing Example

A patient previously walked independently but experiences significant weakness and impaired mobility following a major surgical procedure.

A physical therapist establishes a plan of care designed to restore the patient's prior walking ability, strength, balance, and functional mobility.

The therapist reports the appropriate physical therapy procedure codes. When the patient's health plan requires services to be classified as rehabilitative, Modifier 97 is appended to the applicable services.

The key factor is that the patient is attempting to regain a previously established ability, rather than learning a functional skill that was never acquired.

A different example might involve a patient who previously communicated normally but develops speech impairment following a stroke. Skilled treatment intended to restore that lost communication ability is rehabilitative in nature.

Documentation Requirements

Prior Functional Ability: Document the patient's functional status before the illness, injury, surgery, or condition when relevant.

Current Functional Deficit: Clearly identify the function or ability that has been lost, reduced, or impaired.

Rehabilitation Goals: Establish measurable goals directed toward restoring or improving the impaired function.

Plan of Care: Maintain an appropriate treatment plan describing the interventions required to achieve the rehabilitation goals.

Skilled Intervention: Documentation should demonstrate why the knowledge and skills of a qualified practitioner are required.

Progress: Record the patient's response to treatment and progress toward established functional goals.

Medical Necessity: Support why the services are reasonable and necessary for the patient's condition.

Billing and Claim Considerations

Modifier 97 should be viewed as a service-classification modifier, not as a replacement for the other modifiers required on outpatient therapy claims.

Medicare uses discipline-specific modifiers to identify therapy furnished under a therapy plan of care. For example, CMS's 2026 therapy guidance continues to require applicable therapy modifiers for services furnished by therapists under a therapy plan of care.

Those modifiers include:

GP: Services delivered under an outpatient physical therapy plan of care.

GO: Services delivered under an outpatient occupational therapy plan of care.

GN: Services delivered under an outpatient speech-language pathology plan of care.

Other modifiers may also be necessary depending on who furnished the service and the circumstances involved. CMS requires CQ for applicable outpatient physical therapy services furnished in whole or in part by a physical therapist assistant and CO for applicable occupational therapy services furnished in whole or in part by an occupational therapy assistant.

Therefore, Modifier 97 should not be interpreted as replacing GP, GO, GN, CQ, CO, or other Medicare-required therapy reporting.

Rehabilitative vs. Habilitative Services

The distinction between rehabilitation and habilitation is central to correct use of Modifier 97.

Rehabilitative Services: Help restore or improve a function that has been lost or impaired.

Habilitative Services: Help a patient develop, acquire, or maintain skills and functions that may not previously have been established.

For example, therapy designed to help an adult regain walking ability after an injury is generally rehabilitative. Therapy intended to help a patient develop a functional ability that they have not previously acquired may be habilitative.

The patient's functional history and treatment goals are therefore important when determining whether Modifier 96 or Modifier 97 best describes the service.

Medicare Therapy Requirements

Modifier 97 does not override Medicare's broader outpatient therapy requirements.

Medicare outpatient rehabilitation therapy includes physical therapy, occupational therapy, and speech-language pathology services, and CMS maintains an annual list identifying codes that always or sometimes represent therapy services. The list is updated to reflect annual CPT and HCPCS changes.

For 2026, Medicare's KX modifier threshold is $2,480 for PT and SLP services combined and $2,480 for OT services. When applicable therapy services exceed the threshold, the KX modifier confirms that continued services are medically necessary and supported by the medical record.

Modifier 97 does not replace KX when KX is required, nor does the presence of Modifier 97 independently demonstrate medical necessity.

Common Billing Mistakes

Confusing 97 With 96: Modifier 97 identifies rehabilitative services, while Modifier 96 identifies habilitative services.

Ignoring the Patient's Prior Function: Classification should be supported by whether treatment is restoring an impaired ability or developing a function that was not previously established.

Replacing GP, GO, or GN: Modifier 97 does not substitute for Medicare's applicable discipline-specific therapy modifiers.

Ignoring CQ or CO: When applicable, Medicare requires CQ or CO to identify services furnished in whole or in part by a PTA or OTA.

Assuming Modifier 97 Establishes Medical Necessity: The modifier classifies the service but does not independently demonstrate that treatment is reasonable and necessary.

Weak Functional Goals: Generic goals without a clear relationship to the patient's functional impairment may make the rehabilitative nature of treatment difficult to establish.

Using the Modifier Automatically: Payer requirements differ, so Modifier 97 should not be appended indiscriminately to every physical, occupational, or speech therapy claim.

Common Denial Reasons

Rehabilitative Purpose Not Supported: Documentation does not demonstrate that treatment is intended to restore or improve impaired function.

Incorrect Modifier: The documentation supports habilitative services rather than rehabilitative services.

Medical Necessity Not Established: The record does not adequately support the need for skilled treatment.

Required Therapy Modifier Missing: GP, GO, GN, or another applicable therapy modifier is absent from the claim.

Assistant Modifier Missing: CQ or CO is required based on who furnished the service but is not reported.

Coverage Requirements Not Met: The service does not satisfy the payer's applicable rehabilitation coverage policy.

Insufficient Documentation: Functional deficits, treatment goals, interventions, or patient progress are not adequately documented.

Modifier 97 vs. Modifier 96

Modifier 97: Rehabilitative services intended to restore or improve a function that has been lost or impaired.

Modifier 96: Habilitative services intended to help develop or acquire functional abilities.

A practical way to distinguish them is to ask what the treatment is designed to accomplish. If the patient is working to regain a previously established function, Modifier 97 may apply. If treatment is directed toward developing a function or skill, Modifier 96 may be more appropriate.

The patient's diagnosis alone should not determine the choice. Documentation of the patient's prior abilities, current deficits, and treatment goals provides the stronger basis for classification.

Frequently Asked Questions

Can Modifier 97 replace GP, GO, or GN on a Medicare therapy claim?
No. Modifier 97 identifies the rehabilitative nature of a service. Medicare's GP, GO, and GN modifiers identify services furnished under the applicable physical therapy, occupational therapy, or speech-language pathology plan of care and remain required when applicable.

Does Modifier 97 automatically establish that rehabilitation is medically necessary?
No. The modifier identifies the service as rehabilitative but does not establish coverage by itself. The medical record must support the patient's functional impairment, treatment goals, skilled intervention, and applicable medical necessity requirements.