Physical Therapy Billing Units: A Comprehensive Guide

Along with treating patients and improving quality of life, physical therapists (PTs) represent the tip of the iceberg when it comes to the intricate tasks of documentation, billing, and coding—all of which are essential in ensuring clinics are properly reimbursed by private and public payers. At the heart of this effort are physical therapy billing units, which play a critical role in the financial health of the practice.

Physical therapy billing units standardize the quantification of services provided during therapy sessions and encompass both time- and service-based categories. They ensure that physical therapists are fairly compensated for their time and expertise while also supporting compliance and payer requirements.

Our comprehensive guide to physical therapy billing units will delve into the different types of units, common challenges in physical therapy service billing, and best practices to ensure claims are not denied. By mastering these billing principles, physical therapists and their teams can optimize operations, reduce administrative burdens, and focus on their primary passions: treating patients and improving outcomes.

What Are Physical Therapy Billing Units?

In the most general sense, a billing unit is a standardized measure used to quantify and bill for services provided by healthcare professionals. It represents a specific amount of time, a specific service, or a combination of both, and is used to ensure that the services rendered are accurately documented and appropriately reimbursed by insurance companies or other payers.

Billing units help standardize the billing process across different healthcare providers and payers, facilitating clear communication, compliance with regulations, and efficient financial transactions.

In 1966, the American Medical Association (AMA) first developed the Current Procedural Terminology (CPT®) coding system, which continues to be the most widely used and accepted coding methodology in physical therapy. Used to describe and bill for various physical therapy services, these units are essential for several reasons.

• Standardization: CPT® codes ensure a uniform language and process across healthcare. This standardization helps providers, payers, and regulatory bodies communicate and process claims efficiently.
• Billing and Reimbursement: Each CPT® code corresponds to a specific type of therapy service or procedure. Billing units determine how much a physical therapy practice will be reimbursed by insurance companies, Medicare, and other payers. Accurate coding ensures appropriate payments for services provided.
• Tracking and Documentation: Using billing units helps maintain detailed patient treatment records. This documentation is vital for both clinical and administrative purposes, ensuring continuity of care and streamlining audits and reviews.
• Compliance: Adhering to standardized billing units—ensuring that billing practices meet the requirements set forth by payers and government bodies—helps rehab therapy practices stay compliant with regulations and avoid potential legal and financial penalties.
• Quality of Care: Accurate coding can have an indirect impact on quality of care. Accurate billing and physical therapist documentation can lead to better resource allocation, patient tracking, and overall management of the physical therapy operation. This can ultimately benefit patient outcomes, not to mention patient satisfaction levels.

Understanding and correctly applying billing units, such as those involving therapeutic exercise and manual therapy, is fundamental to the success of any rehab therapy practice.

What are the Types of Physical Therapy Billing Units?

Two types of physical therapy business units exist, each equally important in ensuring accurate and appropriate billing: time-based PT billing units and service-based units. Specific CPT® codes exist that align with each unit type. Here is a breakdown of these billing units.

Time-Based Billing Units

Time-based billing units are used for physical therapy services that are billed based on the amount of time spent with each patient. Each unit typically represents 15 minutes of therapy services provided. Time-based services include therapeutic exercise, manual therapy, and neuromuscular re-education.

Billing codes used for time-based services must be supported by documentation that includes precise time tracking. These codes are considered more complex due to time-tracking requirements as well as rules like the 8-minute rule, which is discussed below. Examples of time-based codes, each billed in 15-minute increments, include:

• Therapeutic Exercise (97110). This includes therapeutic exercises to develop strength, endurance, range of motion, and flexibility (e.g., bicycle, treadmill).
• Neuromuscular Re-Education (97112). Re-education includes movement, balance, coordination, kinesthetic sense, posture, and proprioception.
• Manual Therapy (97140). Manual therapy techniques like mobilization/manipulation, manual lymphatic drainage, manual traction can be applied to one or more regions.
• Therapeutic Activities (97530). Therapeutic activities use dynamic activities to improve functional performance (e.g., lifting, reaching).
• Gait Training (97116). Gait training is used for stair climbing, weight-bearing activities, and more.

Service-Based Units

These units are used for services billed per session or occurrence, regardless of the time taken to complete them. Service-based codes require confirmation of service completion with the provider’s documentation but do not require tracking the exact time spent providing each service.

Examples of service-based codes include:

• Physical Therapy Evaluation (97161-19163). This includes low-complexity evaluation (97161), moderate-complexity evaluation (19162), and high-complexity evaluation (97163).
• Physical Therapy Re-Evaluation (97164). Re-evaluation of the patient follows primary evaluation.
• Electrical Stimulation, Unattended (G0283). Electrical stimulation (unattended), to one or more areas for indication(s) other than wound care, is administered as part of a therapy plan of care.
• Group Therapy (97150). Therapeutic procedures may be provided to two or more individuals. Constant attendance by the provider is required, but one-on-one patient contact is not necessary.

What is the 8-Minute Rule?

The “8-minute rule” is a guideline used in physical therapy billing to determine how many units of time-based services can be billed to Medicare and other insurance providers, helping ensure accurate billing.

The 8-minute rule applies to time-based services. As stated above, these services are billed in 15-minute increments or units. According to the rule, a therapist must provide at least eight minutes of time-based service to bill for one unit.

If the time spent on a service is less than eight minutes, it cannot be billed as a full unit.

The number of units billed is based on the total time spent providing direct patient care. It is calculated as follows.

• One Billable Unit: eight to 22 minutes
• Two Billable Units: 23-37 minutes
• Three Billable Units: 38-52 minutes
• Four Billable Units: 53-67 minutes

This pattern continues with each additional 15-minute increment. Furthermore, the 8-minute rule requires physical therapists to accurately document the exact time spent on each time-based service during a therapy visit. The total treatment time must also be noted to determine the number of units that can be billed.

If multiple time-based services are provided in a single session, their times are combined before applying the 8-minute rule. However, each service must be documented separately.

The 8-minute rule is an important guideline in physical therapy billing that helps determine how many units of time-based services can be billed per treatment session, ensuring accurate and compliant billing practices.

What are Common Billing Modifiers in Physical Therapy?

Billing modifiers are additional codes used to provide more specific information about the services provided, ensure accurate reimbursement, and clarify any special circumstances related to the treatment.

Modifiers are essential for indicating that a service or procedure has been altered in some way without changing its definition or code. They help in avoiding claim denials and ensuring proper billing.

There are a number of examples of common billing modifiers used for physical therapy services.

Modifier 59

In outpatient rehab therapy, Modifier 59 is used to indicate that a service or procedure was distinct or independent from other services performed on the same day. It is essential for billing multiple procedures that are typically not reported together, ensuring each is recognized and reimbursed separately.

KX Modifier

Using a KX modifier indicates that the services provided exceed the annual therapy threshold but are deemed medically necessary to achieve positive patient outcomes. This modifier ensures that the additional treatments are recognized and reimbursed appropriately by Medicare or other insurance providers.

GP Modifier

The GP modifier signifies that the services were delivered under a physical therapy plan of care. This modifier helps ensure that the physical therapy services rendered are recognized as medically necessary and are billed under the correct category for reimbursement by Medicare or other insurance providers. In a multidisciplinary setting, it also helps indicate which provider offered the services.

GA Modifier

A GA modifier indicates that a waiver of liability statement, such as an Advance Beneficiary Notice (ABN), is on file for a service that Medicare may not cover. This modifier informs Medicare that the patient has been notified of their potential financial responsibility if the service is denied.

CQ/CO Modifiers

In rehab therapy, the CQ modifier is used to indicate services provided by a physical therapist assistant under the supervision of a physical therapist, while the CO modifier is used for services provided by an occupational therapy assistant. These modifiers ensure that services provided by assistants are billed correctly and meet payer requirements for supervision and reimbursement.

Proper training and understanding of when and how to use these modifiers are essential for all the physical therapy providers, billing and coding professionals. This helps reduce costly claim denials by ensuring all codes accurately reflect the nature of the circumstances behind each service provided.

Best Practices for Using Physical Therapy Billing Units

Ensuring that physical therapy billing units are used appropriately involves a combination of accurate documentation, understanding additional unit coding requirements, ongoing staff training, and adherence to payer guidelines.

Achieving competency within each of these areas will require an investment, but it’s a worthwhile one. Securing payer reimbursements commensurate to the services provided, while avoiding claims denials, is essential for operational stability and growth.

Consider the following best practices to ensure your rehab therapy team is continually expanding its billing unit expertise.

Document Accurately and Thoroughly

This includes detailing each service provided, specifying the type of therapy, the specific interventions used, and their medical necessity. For time-based services, it is crucial to accurately record the start and end times, ensuring that the total minutes are correctly calculated and aligned with the billing units.

When multiple services are provided in a session, each service should be documented separately, noting the time spent on each.

Select Correct Coding and Use of Modifiers

Ensure that the correct CPT codes are selected for each service provided. To do this over the long term requires therapy teams to regularly update their knowledge of these codes as they are revised. Modifiers such as 59, GP, and KX should be used appropriately to indicate distinct services, telehealth, medical necessity, or other specific conditions. Regular training on when and how to use modifiers can help prevent errors and claim denials.

Comply with Payer Guidelines

Different insurance companies may have unique billing rules, so it’s important to understand and comply with the specific guidelines of each payer, including Medicare.

Obtaining preauthorization when required, especially for services that exceed certain limits or are deemed high-cost, is essential. For Medicare and other payers that use the 8-minute rule, accurate application is necessary to determine the correct number of units for time-based services.

Regularly Train and Educate Staff Members

Providing continuous education and training for therapists and billing staff on the latest coding practices, payer requirements, and documentation standards is important. Conducting regular workshops or webinars on CPT coding and modifier use can keep the staff updated.

Conduct Regular Audits and Reviews

Internal audits and quality control are also essential. Performing regular internal audits of billing processes and documentation to identify and correct errors is important. Implementing a peer-review system where therapists review each other’s documentation and billing practices can ensure compliance and accuracy.

Implement Tech-Based Solutions

The use of technology and software can streamline processes. Utilizing reliable billing and practice management software that supports accurate coding, documentation, and billing is beneficial. Partnering with an electronic health records (EHR) vendor can help rehab therapy clinics create innovative strategies that help reduce billing errors and streamline documentation.

Communicate Effectively

Effective communication and coordination within the clinic are crucial. Fostering clear communication between therapists, billing staff, and administrative personnel can ensure that everyone understands the billing process and requirements. Maintaining open lines of communication with payers can help quickly resolve any billing issues or denials.

Educate Patients, Too

Patient education and involvement are also important. Educating patients about their insurance coverage, what services are covered, and any potential out-of-pocket costs can prevent misunderstandings. Ensuring that patients understand and consent to the treatment plan, including any financial responsibilities, is crucial.

Understanding Physical Therapy Billing Units

By implementing these best practices, physical therapy clinics can ensure that billing units are used appropriately, reducing the risk of claim denials and ensuring proper reimbursement for services provided.

Accurate and detailed documentation, correct code selection, compliance with payer-specific guidelines, regular training and education, internal audits, effective use of technology, clear communication, and patient involvement are key components to a successful billing process in physical therapy clinics.