If you own and operate a physical therapy practice, you know that billing patients and collecting payments for services is just part of the job. After all, you’re running a business, and it needs to generate revenue. However, learning to properly code, document, and submit physical therapy billing units is easier said than done.
Fortunately, Weave is here to help.
We offer comprehensive software solutions for the physical therapy industry, including our Payments tool that delivers fast, flexible, and convenient payment options to benefit your practice. Keep reading for the ultimate guide to physical therapy billing, including how to determine billing units, examples of common billing scenarios, and best practices.
What are Physical Therapy Billing Units?
Definition and Purpose
Each healthcare industry uses different medical billing services and codes. However, the fields of physical and occupational therapy generally use the same standardized unit-based system for billing patients. In this system, each unit represents the specific amount of time the therapist spent providing treatment.
The number of billing units for each therapy service varies on factors like case complexity, the type of therapeutic activity, and the length of treatment time. This type of billing system standardizes the claim process and ensures that the provider receives fair compensation for their services.
Of course, it takes a little practice to get the hang of proper billing. With the average physical therapy clinic treating between 101 and 200 patients every week, keeping current with your billing can seem overwhelming. That’s why many physical therapists have chosen to automate the process using software and integrated platforms, which increase the efficiency and accuracy of billing claims.
Types of Billing Units
A billing unit describes the number of times you performed the service for a patient. The American Medical Association developed the Current Procedural Terminology (CPT) code system, which is the most widely accepted and used in healthcare and physical therapy.
A CPT code allows you to correctly describe and bill for the time you spent treating a patient. Service-based time codes are for treatments that don’t require the continuous presence of the therapist, like an evaluation. You can only bill these services once, no matter how much time you spend performing them.
Time-based codes are for when you are in direct contact with the patient during the service, like manual therapy treatments. Those time-based CPT codes are billable in 15-minute increments. However, for a Medicare patient, you must follow the 8-minute rule. Every physical therapist who provides a one-on-one Medicare service must perform the treatment for at least 8 minutes to receive reimbursement, whether they perform a therapeutic exercise or any other service.
How to Determine Billing Units for Physical Therapy
Type of Service
The type of service you perform on a patient can fall under two different categories: time-based or service-based (a.k.a. timed or untimed).
Timed codes require billing under the 8-minute rule. For every 15 min. you spend providing service, you can bill a single timed unit. After adding together the total timed minutes, you can bill one additional unit if there are at least 8 leftover minutes. Common CPT therapy codes include, but are not limited to:
- 97110: Therapeutic Services
- 97116: Gait Training
- 97140: Manual Therapy
- 97530: Therapeutic Activities
For untimed codes, you determine billing units based on the type and complexity of the service or therapeutic exercise. No matter the total time you spend during a treatment or therapeutic procedure, you can only bill one unit of each code. They also include any service that doesn’t require one-on-one contact.
Common code examples for service-based treatments include, but are not limited to::
- 97010: Hot/Cold Packs
- 97012: Mechanical Traction
- 97014: Unattended Electrical Stimulation (E-Stim)
PT Billing and Eval Codes
Learning the fundamentals of physical therapy billing is essential. That includes the CPT code system, timed codes and untimed services, and how to calculate billing units. Submitting incorrect claims will result in a coverage denial.
Claim denials can cost your practice more than just the initial time you spent submitting an incorrect bill and then appealing it – they also cause significant financial losses. Recent data estimates that claim denials cost U.S. healthcare providers an average of 3.3% in net patient revenue, with claim appeals costing $118 on average.
In 2017, there was a change to the CPT code system regarding initial patient evaluations and reevaluations, and codes 97001 and 97002 are no longer applicable. Evaluations require a service-based code, which means you’ll need to determine the complexity level for each patient. After the 2017 rule change, there are now three codes you can use to determine the complexity level for an initial evaluation:
- 97161: Low Complexity
- 97162: Moderate Complexity
- 97163: High Complexity
For reevaluations, you use code 97164 instead of 97002. In addition, reevaluations require a previously established plan of care, additional examination, and a new, revised plan of care. Medicare patients require reevaluations every 30 days or every 10th visit, whichever comes first.
Calculating Timed Units
Billing claim accuracy depends primarily on your ability to calculate timed code units correctly. A unit refers to the length of a treatment session. For timed units (like manual therapy), add together the total timed minutes on a specific date. Then, divide that number by 15 to determine how many units you can bill. If more than 8 minutes of total time are left, you can bill an additional unit.
This quick chart will help you figure out how many units you can bill on a particular date for timed code services:
|1 Unit||8 to 22 minutes|
|2 Units||23 to 37 minutes|
|3 Units||38 to 52 minutes|
|4 Units||53 to 67 minutes|
|5 Units||68 to 82 minutes|
|6 Units||83 to 97 minutes|
|7 Units||98 to 112 minutes|
|8 Units||113 to 127 minutes|
Calculating Untimed Units
Calculating and billing untimed or service-based units has different guidelines than timed units. First, the length of each session doesn’t factor into your billing calculations; instead, you receive a predetermined reimbursement fee. Whether you spend 10 minutes or an hour providing a service-based treatment, you can only submit one billing unit per session. However, you still have to record the time-in and time-out for each untimed service session.
PT Billing Modifiers
Modifiers are another core aspect of billing methods. One of the most common is the CQ modifier, which signifies that a physical therapy assistant performed some or all of the patient’s treatment. As of 2022, the Center for Medicare Services will only provide an 85% reimbursement for any service with a qualifying CQ modifier code. Another standard modifier is code GP, which is for billing outpatient physical therapy services.
Documenting Services Provided
Documenting detailed information about each service helps prevent billing claim errors and denials. Bew sure to include mandatory code components and double-check that your descriptions are clear and easily understandable to a third party. The American Physical Therapy Association has a list of required guidelines for billing documentation, including:
- Comorbidities and Personal Factors: To help clarify the level of complexity, always specify the personal factors and comorbidities affecting the patient’s plan of care.
- Clinical Presentation: The assessment section of your documentation should include evidence supporting the patient’s clinical presentation as unstable, evolving, or stable.
- Body System Elements: List every body structure and/or function you addressed during treatment, including applicable restrictions or limitations.
- Clinical Decisions: Include every component you examined and analyzed to explain why you made each specific clinical decision for the patient.
- Complexity Level: Choose the appropriate complexity level (low, moderate, or high) and its corresponding evaluation code.
- Assessment and Outcome Tools: Document the results of patient assessments or outcome tools as the reasoning behind your clinical decisions.
Review and Submit Claims
Before you submit a billing claim, take the time to thoroughly review the accompanying documentation. This step lets you catch and correct potential errors or mistakes before submission, preventing the hassle and expense of a claim denial. For example, you should verify the following information:
- Insurance coverage and type
- Specific modality types and services provided
- Patient demographics and information
- Billing units and codes
- Documentation and details
Most providers have upgraded to electronic claim forms for their billing systems, although some payers still accept paper forms. The most common paper form is the Universal Claim Form (CMS 1500).
Once you review and submit your billing claims, they’ll go to a clearinghouse. After an independent claim verification and audit, the payer will approve or deny the claim. The final reimbursement amount (for approved claims) will go to the physical therapy clinic, and both the patient and provider will receive an Explanation of Benefits.
How to Complete Common Billing Unit Scenarios in Physical Therapy
Group Therapy Sessions
Group therapy sessions consist of two or more patients receiving treatment at the same time. For these sessions, use the CPT billing code 97150. While the therapist must maintain a constant presence, providing one-on-one contact to either patient isn’t necessary. Furthermore, the patients don’t have to undergo the same exercise or treatment. Each patient receives one billing unit.
Here’s an example:
Two patients have a dual 30-minute therapy session, one receiving gait therapy and the other performing a therapeutic exercise program. The therapist alternates attention between both patients, spending a few minutes with each one and providing assistance when necessary, but no direct one-on-one contact. In this scenario, each patient receives a single billing unit for a group therapy session (97150).
Simultaneous Treatment of Multiple Body Parts
Correctly documenting and billing patients who require simultaneous treatment for multiple affected body parts can be confusing. Let’s dive right into our example:
You’re treating a Medicare patient with tears in their ACL (anterior cruciate ligament) in both knees. They come in for a session, which includes a 15-minute session of electronic stimulation (e-stim) therapy for each knee. In this scenario, you combine both individual sessions and submit a billing claim for two units, or 30 minutes total.
Now, let’s use the same hypothetical patient but change the scenario slightly. During the e-stim therapy to both knees, you discover a previously unknown fracture to the left foot (metatarsal). Related injuries call for a reevaluation and updated plan of care; unrelated require a new initial evaluation and a separate plan of care.
For a session that includes 15 minutes of therapy for each knee and the single foot, you combine the time and bill for a total of 45 minutes (three units) under code 97110.
Sessions involving two distinct services require adding modifier 59 to your billing claim.
Another confusing billing scenario is for patients who don’t complete sessions. Of course, each situation is unique and depends on factors like the patient’s insurance coverage, necessary care, and the type of services they require.
For patients who undergo sessions of time-based services, the number of units you can bill depends on how long you performed a skilled service during treatment. For example, a patient on Medicare comes in for a scheduled 45-minute session of neuromuscular reeducation (a timed service). However, they leave partway through the session and only receive 33 minutes of treatment. You can bill this patient for two units. Although you have four minutes of remainder time, it doesn’t meet the 8-minute rule, which means you can’t charge for an additional unit.
In the past, Medicare didn’t cover certain types of maintenance therapy. However, the case of Jimmo vs. Sebelius changed that. Now, Medicare covers maintenance therapy costs based on the patient’s specific need for skilled care instead of their likelihood of improvement. The therapy must be medically necessary and requires a skilled carer to perform the treatment. Billing claims don’t require providers to demonstrate a clear improvement in the patient.
There’s no individual CPT code for maintenance therapy. Instead, billing is based on the specific service and care you provide. However, your documentation must describe when the patient needs those services to maintain normal function.
The COVID-19 pandemic triggered widespread access to telehealth services, including remote sessions over the phone or video. Many therapists choose to bill virtual sessions following the same CPT guidelines for in-person sessions, with the addition of a telehealth modifier. Here are a few different examples with corresponding CPT codes:
- Telehealth sessions for Medicare Patients: 99201 to 99215
- E-Visits for Physical Therapy: G2061 to G2063
- Virtual Check-In Therapy Sessions: G2010 and G2012
Billing a telehealth therapy session requires the addition of a CR modifier, with a GP modifier describing which services you performed on the patient before billing.
Best Practices for Physical Therapy Billing Units
Physical therapy billing involves complex guidelines and rules, which you have to fully understand and account for to ensure that you submit clean, error-free claims. Keep reading as we discuss best practices and expert advice regarding your practice’s billing process.
Train Staff on Billing Procedures
Keeping your staff trained and updated on billing procedures is a vital responsibility for every physical therapy practice. In the past, providers had to manually complete and submit every billing claim by hand, which is a slow, error-prone, and time-consuming process.
Now, there’s an infinitely easier and faster way to handle the non-stop flow of billing claims your clinic generates: with automated billing software, payment tools, and integrated platforms. By upgrading to automated software, you can safely delegate billing claims to your staff and increase the efficiency and accuracy of your claims. In addition, try holding monthly staff meetings to keep the proper billing rules, procedures, and regulations fresh in the mind of your employees.
Rule of 8s for PT Units
We already discussed Medicare’s 8-minute rule, but now it’s time to explain the rule of 8s, which has a similar name but a different definition. The 8-minute rule allows you to bill a single unit as long as the service lasts between 8 and 22 minutes and only applies to time-based codes.
The American Medical Association’s rule of 8s follows the same general principle as the 8-minute rule, but instead, you calculate each service individually. Basically, you have to complete at least half of a timed service for it to qualify as a single billable unit.
Remember, you calculate timed codes in increments of 15 minutes. Under the rule of 8s, each single billing unit requires you to finish at least 8 minutes of treatment for every individual service. Also, you can’t combine time, and mixed remainders do not apply.
Document All Services Provided
We can’t overstate the importance of keeping detailed, clear, and accurate documentation for every therapy service you provide to patients. It’s not just an essential task; it’s the law. Every time you come in contact with a patient, you must document all the pertinent details and store them in the patient’s clinical record.
Use Clear, Detailed PT Billing Codes
Using detailed and accurate billing codes for each claim is just as crucial as maintaining thorough patient service documentation. Don’t forget: your practice is also a business that needs to remain profitable to survive. The accuracy and approval rate of your billing claims has a direct, significant impact on your profit margins.
Suffering from an ongoing issue of incorrect billing codes will prolong each payment, and keep your practice from getting paid quicker. So keep investing time and effort until you know every code like the back of your hand and can use them correctly!
Review and Update Billing Policies and Procedures Regularly
Practice owners should also ensure all staff and patients receive regular updates regarding billing policies and procedures. For example, you can create an in-depth document outlining proper billing and collection policies and include that in orientation for every new hire.
Additionally, every new patient should receive paperwork during their first consultation or appointment explaining your clinic’s policies on the type and amount of billing and acceptable payment methods. Weave can also keep a current credit card on file for all regular patients, which makes checking in/out even faster, and those waiting for insurance confirmation can benefit from tools like Text-to-Pay. Finally, consider whether you plan to charge for each treatment or per session.
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Verify Insurance Coverage
In a perfect world, every patient would be 100% honest about whether they have insurance coverage. But, that’s not always the case. When patients lie about having insurance coverage or provide false or expired information, the inevitable result will be a claim denial that costs your practice time and money. However, by taking the time to verify the existence and type of insurance coverage for each patient before you treat them, you can prevent those problems.
Address Billing Disputes Promptly
Billing disputes are another unavoidable issue, whether the source is a patient or a payer. Regardless of the nature of the dispute or complainant, it’s essential to remain proactive and solve the issue as quickly as possible. Allowing a billing dispute to drag on and on doesn’t benefit anyone – except the person who doesn’t want to pay for receiving your services. The longer it takes to resolve billing issues, the less likely it becomes to receive payment. Taking immediate action shows you’re serious about solving the problem and prevents you from experiencing stress from unaddressed financial issues.
Streamline Physical Therapy Billing with Weave
Knowing how to accurately document, calculate, and code physical therapy billing units isn’t something you can learn in a single day. By leveraging the advanced solutions we offer at Weave, including our Payment Tool and cutting-edge billing software, you can simplify and streamline the entire process for a more efficient workflow, higher claim approval rates, and bigger profits. Call Weave now at (866) 308-2039 to schedule a demo of our products and learn more about how we can drive growth and success for your physical therapy practice.