June 7, 2023 | Net Health

3 Minute Read

What You Need to Know to Avoid Medicare 8-Minute Rule Mistakes

n it comes to coding and billing guidelines for Medicare, the instructions are quite specific. From service-based billing codes to time-based billing codes — and the anticipated Medicare 8-Minute Rule (or 8 min rule) — proper documentation is crucial to receive payment from Medicare for direct treatment.

Unfortunately, most practice management software does not account for the intricacies surrounding rehab therapy billing, including thorough documentation of time-based treatment and time spent assessing a patient. Service based CPT codes when providing manual therapy are essential to good practice management.

As such, today, we’re sharing our top tips to avoid Medicare 8-Minute Rule mistakes and receive proper compensation for completed services.

But first…

What is Medicare’s 8-minute rule?

The 8-minute rule is a billing practice implemented by Medicare that has a substantial impact on physical therapy, manual therapy and outpatient services. Understanding time based codes like the 8-minute rule is vital for any physical therapy practice, as it significantly affects the calculation of billable units, documentation requirements, and overall reimbursement.

The 8-minute rule can be described as Medicare’s method of determining how many billable units can be charged for time-based services during a single patient visit. The rule states that a rehab therapist must provide at least 8 minutes of a service to bill for one unit of that service.

As such, today, we’re sharing our top tips to avoid Medicare 8-Minute Rule (or rule of eights) mistakes and receive proper compensation for completed services relating to minutes of therapeutic exercise provided.

Origins of Medicare’s 8-Minute Rule

The 8-minute rule was introduced in the year 2000 and is utilized by outpatient services, allowing a rehab therapy practitioner to bill for services as long as they see their patient for at least eight minutes, which would serve as one unit.

When billing for physical therapy outpatient services, Medicare only allows services to be billed in 15-minute increments, but with the 8-minute rule, a physical therapist can bill for a 15-minute unit, even if they only saw the patient for eight minutes.  Therefore, attention to detail down to the minute will influence how many units a a physical therapist can bill for.

Intricacies of the 8-Minute Rule

Let’s delve deeper into the intricacies of Medicare’s 8-minute rule for physical therapists. For a physical therapist to bill a single billable unit of manual therapy, they must provide at least 8 minutes of a particular service (hence the name, Medicare’s 8 minute rule). For instance, if a therapist performs 8 minutes of manual therapy, they can bill one unit for that service, one minute for the next eight, and so on.

So as the duration of the service increases, so does the number of billable units and how many units PTs can claim they provided. For example, if a therapist provides 23 minutes of therapeutic exercise, they can bill for multiple units, which in this case is two billable units, while 38 to 52 minutes equates to three billable units.

It’s important to understand that the 8-minute rule applies to individual services and the total time of service, determining how many billable units physical therapists may bill Medicare for. In a situation where multiple time-based services are provided in one visit, like therapeutic exercise and manual therapy, the total minutes need to be added up.

If the total is at least 8 minutes, the therapist can bill for one billable unit, but each service must also meet the 8-minute rule individually to be billed separately.

Documentation of the 8-Minute Rule

The 8-minute rule plays a crucial role in the documentation of physical therapy services. Accurate recording of the minutes spent on each service is necessary to determine the correct number of billable units.

Rehab therapists need to ensure they correctly document the minutes of manual therapy and other time-based services. If the minutes of manual therapy or other services aren’t accurately recorded, it could lead to incorrect billing and potential issues with Medicare, as dictated by the 8 minute rule.

Its best not to think in terms of total minutes, but instead in number of billable units.

Providing Therapy via Exercise

Providing therapy via exercise is a common service in physical therapy that falls under time-based services. If a therapist provides 12 minutes of therapeutic exercise, they can charge Medicare for one billable unit. If the one on one treatment of therapeutic exercise extends to 23 minutes, this one unit now turns into two billable units.

However, if the time spent on exercise is less than eight minutes, this is not yet equal to one billable unit and as such, it cannot be submitted as a separate billable unit according to Medicare’s 8-minute rule. This is often the culprit of billing errors, along with other service based CPT codes. If you are going to be billing medicare, best to make sure you’ve followed the guidelines in order to get reimbursement according to Medicare’s service based codes.

Dealing with an insurance company can be hectic, and that same thing applies when attempting to bill Medicare. Its crucial to be up to date with Medicare billing guidelines.

Using Service-Based vs. Time-Based Billing Codes

Medical billing codes are used to report therapeutic, surgical, and diagnostic procedures and services. In rehab therapy, we use these billable unit codes to bill physicians, private health insurance companies, and federal health insurance companies, such as Medicare, for our services. This can grow complicated when dealing with more than one service, but we’ll leave that to another article.

Across physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP), there are two types of billing codes we can use: service-based units and time-based units.

What are Service-Based CPT Codes?

Service-based (or untimed) codes indicate a physical therapy or outpatient procedure has been provided, and bill Medicare for services such as:

  • Physical therapy evaluation CPT Code — 97161, 97162, or 97163
  • Patient re-evaluation CPT Code — 97164
  • Hot/cold packs CPT Code — 97010

After delivering service-based treatment, therapists can only bill for one CPT code, regardless of how long was spent providing treatment. 

What are Time-Based CPT Codes?

Time-based CPT codes are a bit different. Also known as “constant attendance” codes, time-based codes are billed in 15-minute increments. So, a provider is compensated for the direct amount of time spent delivering the service. 

We use a time-based code to bill for services such as: 
  • Therapeutic exercise CPT Code — 97110
  • Manual therapy CPT Code — 97140
  • Ultrasound CPT Code — 97035
\Medicare's 8-minute rule and physiotherapy

Why is the Medicare 8-Minute Rule is Crucial for Billing? 

Unlike a service-based CPT code, a time-based CPT code (or other time based treatment code) relies on the actual time  spent with a patient (or in the case of group therapy, “patients”). This caveat is especially important when billing Medicare. For time-based codes, providers must issue direct treatment for at least eight minutes to receive reimbursement. 

How do I calculate billable units?

When calculating the number of billable units for a patient, Medicare adds the total minutes of dedicated, one-on-one therapy, and divides the sum by 15. If eight or more minutes are leftover, providers can bill for one more unit. However, if seven or fewer minutes remain, we cannot bill an additional unit. 

Imagine if we provided 54 minutes of various rehab therapy (applying to physical therapists, occupational therapists and speech language pathologists). Medicare would divide 54 by 15, and quantify that time as three whole units with nine remaining minutes. Because more than eight minutes remain, we can bill Medicare an additional unit. 

If we had provided 51 minutes of therapy, Medicare would quantify that time as three whole units and six remaining minutes. Therefore, we could only bill for three time-based codes. This is important for any staff member who counts billable units to comprehend.

Can Assessment and Management Time Apply Toward the 8-Minute Rule?

One of the most common trends we see in rehab therapy billing is the omission of assessment and management time. However, billing codes are meant to report all therapeutic and diagnostic procedures and services, which include but aren’t limited to:

  • Assessing the patient prior to performing a service
  • Answering patient and/or caregiver questions
  • Instructing the patient on-at-home self-care
  • Documenting treatment throughout an appointment

Assessment and management are essential components of the patient plan of care (POC) and deserve to be included in our services rendered. We must accurately document all processes to ensure they are defensible if you plan to apply this time toward the Medicare 8-Minute Rule.

The Bottom Line on Documentation

In other words, documentation should be detailed, accurately describe the service, defend the clinical reasoning behind the treatment, and be easily understood by another provider.

When a healthcare provider can confidently describe and defend the minutes spent assessing and managing a patient, Medicare may green-light the extra minutes — resulting in more complete, billable units.

Conclusion of Medicare’s 8-Minute Rule

In conclusion, the 8-minute rule is a pivotal aspect of physical therapy billing and documentation. It directly influences the calculation of billable units and the documentation of time-based services, such as therapeutic exercise and minutes of manual therapy.

A thorough understanding of the 8-minute rule is crucial for physical therapists in clinics, hospital outpatient and inpatient acute settings to ensure accurate billing and compliance with Medicare’s guidelines.

Billing Medicare is one of the more intricate tasks in rehab therapy. 

Its important to have technology that makes it easy to follow Medicare billing guidelines. Learn how Net Health’s Rehab Therapy Software Solutions for Hospital Outpatient Clinics, Acute Care, Skilled Nursing and Senior Living, and Private Practice can help improve thorough documentation for service-based and time-based billing codes, so teams can receive proper compensation for direct treatment. 

Learn about Net Health’s Specialized EHR software

To learn more about Medicare’s 8 Minute rule and how a specialized EHR system can help with documentation and adherence, contact Net Health and schedule a demo.

Share this post

Subscribe and See More