Special considerations for billing physical therapy services

Special considerations for billing physical therapy services

Special Considerations for Billing Physical Therapy Services

Billing for physical therapy (PT) services involves unique rules, time-based codes, and payer-specific policies that differ from many other specialties. For medical billing licensees, understanding these nuances is essential for avoiding denials, managing compliance, and maintaining steady reimbursement.

This article breaks down the key factors you need to consider when working with physical therapy providers.

1. Understand Time-Based vs. Untimed Codes

Physical therapy billing frequently uses a mix of:

  • Time-based codes (also called “constant attendance” codes), where reimbursement is tied to the minutes spent

  • Untimed codes, where the service is billed once per session regardless of time

Time-based codes (e.g., 97110 – Therapeutic exercises) are billed in 15-minute increments, following the 8-minute rule:

  • 8–22 minutes = 1 unit

  • 23–37 minutes = 2 units

  • and so on

Untimed codes (e.g., 97001 – PT evaluation) are billed once per session, regardless of duration.

Best practice: Confirm how each service is classified and ensure time spent is clearly documented to support units billed.

2. Follow the 8-Minute Rule Carefully

The 8-minute rule applies when billing Medicare and many commercial payers for time-based services.

You must track and total only the minutes spent in direct, one-on-one therapy with the patient. Rounding or estimating without documentation can result in audits or denials.

Best practice: Make sure therapists document start/stop times for each code or a total for each type of service, not just the overall session length.

3. Pay Attention to Plan of Care and Progress Reports

Medicare and other payers require:

  • An initial plan of care signed by a physician

  • Periodic progress reports (usually every 10 visits or 30 days)

  • Recertification when the plan is updated or extended

Missing documentation can delay or deny payment—even when the coding is correct.

Best practice: Set reminders for reporting deadlines and confirm that updated notes are signed and attached before billing.

4. Know the Difference Between Evaluation Codes

There are multiple PT evaluation codes, each based on the complexity of the patient’s condition:

  • 97161 – Low complexity

  • 97162 – Moderate complexity

  • 97163 – High complexity

These are not interchangeable. Billing a higher-complexity code without documentation to support it can result in downcoding or review.

Best practice: Verify that the chosen evaluation code matches the clinical documentation (number of comorbidities, decision-making complexity, etc.).

5. Use Modifiers Appropriately

Physical therapy billing often requires modifiers, especially when working with Medicare. Common ones include:

  • GP – Required on all therapy claims to indicate services were delivered under a physical therapy plan of care

  • 59 – Distinguishes a separate, distinct procedural service

  • KX – Used to override Medicare’s soft therapy cap with documentation of medical necessity

Best practice: Ensure your billing software flags required modifiers and that staff understand when and why to use each one.

6. Monitor Visit Limits and Authorization Requirements

Many payers cap the number of PT visits allowed per year or require pre-authorization beyond a set number. Exceeding these limits without approval can lead to denied claims.

Best practice: Track visit counts by patient and payer, and help providers initiate pre-auth when needed. Communicate visit limits to the front desk or scheduling team.

Conclusion:

Physical therapy billing comes with specific rules that require more than just code entry—it demands attention to time, documentation, and payer policy. By mastering the key differences and setting up systems to track documentation and authorizations, medical billing licensees can reduce errors and support strong revenue cycles for PT practices.

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