If dogs and diamonds are people’s best friends, then rehab therapy billing might be our worst enemy—or frenemy, perhaps. Because even though proper billing keeps your clinic up and running, using the wrong billing techniques or approaches will, at best, stick you with some serious underpayments—and at worst, land you in compliance hot water. While billing ease does come with experience, even the most adept billers get tripped up from time to time when trying to follow state, federal, and payer-specific rules.
Beyond that, even if billers do follow the rules to a T, they may not be billing efficiently—and that could mean lost revenue and stunted cash flow. That simply won’t do! So, read on to learn how to optimize your billing—while also staying on the right side of state and payer regulations.
Follow the rules.
Optimizing your billing process is critical to improving your revenue and cash flow—but no matter how efficient you could make your practice in theory, you always must follow the state, federal, and payer rules that apply to you. Let’s review the most common ones.
Medical Necessity
Most—if not all—payers expect clinicians to provide services that are medically necessary. In other words, the services provided must specifically (and effectively) treat a patient’s particular ailment or injury. But that’s layman’s talk. Here’s how The Centers for Medicare and Medicaid Services (CMS) defines medically necessary services. The services must:
- “Be safe and effective;
- Have a duration and frequency that are appropriate based on standard practices for the diagnosis or treatment;
- Meet the medical needs of the patient; and
- Require a therapist’s skill.”
While it is possible to strategically select services to treat patients (more on that after we cover the rules), whichever services you provide must fall within the realm of medical necessity.
One-on-One Time and Group Therapy
When optimizing your appointment time to ensure that you bill as many units as possible, it’s important to be cognizant of (and adhere to) the rules of group therapy and one-on-one time. When providing therapy in a group environment, you can typically bill one unit of group therapy per patient and “jump back and forth between [each] patient” no matter their insurance carrier.
However, when billing one-on-one services, you must adhere to much stricter treatment guidelines—especially when you’re working with two patients during the same time window. Per this Gawenda Seminars article, you must defer to the American Medical Association’s (AMA’s) definition of one-on-one time, which means that, when providing one-on-one services, you must provide “direct (one-on-one) patient contact.” That means you can only treat one patient at a time—no matter their insurance carrier.
8-Minute Rule
The 8-minute rule is Medicare’s north star of physical therapy billing. It governs exactly how many units a clinician may bill after providing a given number of service minutes. Understanding how this rule works is crucial to optimizing your billing practices. It all boils down to this: if you provide a service for eight to 15 minutes, then you may bill one unit of that service. When billing multiple units, add up the total time you spent providing services (both timed and unattended) and divide by 15. Then, “If eight or more minutes are left over, you can bill for one more unit; if seven or fewer minutes remain, you cannot bill an additional unit.” (Or, simply use the following quick-reference chart to determine how many units to bill.)
| 8 – 22 minutes | 1 unit |
| 23 – 37 minutes | 2 units |
| 38 – 52 minutes | 3 units |
| 53 – 67 minutes | 4 units |
| 68 – 82 minutes | 5 units |
| 83 minutes | 6 units |
The Rule of Eights
The rule of eights (also referred to as the AMA 8-minute rule) is an alternative method of counting up billable units that some payers use instead of the Medicare 8-minute rule. If you’re adhering to this method, you don’t combine the amount of time spent providing all services. Instead, you look at the amount of time spent providing individual services. So, if you provide 10 minutes of 97110 and 10 minutes of 97116, then you can bill two units—one for each service.
State Practice Act
Finally, if you plan to leverage assistants or extenders in your clinic, it’s critical to know the ins and outs of your state practice act. This is because while assistants make skilled and meaningful contributions to patient care—and extenders and technicians can help on the sidelines—they don’t have the same clinical authority as fully licensed therapists. Implementing a team treatment system (i.e., a process wherein therapists, assistants, and other supportive personnel work all provide care at the peak of their skillset) is a wonderful way to maximize clinic efficiency—but there’s a caveat. Everyone’s work must fall within the bounds of their legally defined clinical expertise.
Learn how to stretch your time.
Now that you have the rules down pat, it’s time to learn how to operate within the confines of these regulatory guidelines (i.e., how to stretch your time, units, and dollars).
Use assistants and technicians.
As I mentioned above, one of the most effective ways a clinic can maximize its efficiency is by implementing a team treatment system, where patients receive care from PTs and PTAs (and occasionally extenders) who are working at the peak of their skill set. The main idea behind this philosophy is that if a task does not need to be performed by a licensed therapist, hand it off to a PTA. If a task does not need to be performed by a licensed PTA, then hand it off to a technician. Instead of asking a therapist to spend their time completing an exercise regimen that could be completed by a PTA—or asking a PTA to wipe down tables, finish administrative work, or complete tasks that a technician could do—let the therapist (and ultimately everyone in the clinic) provide their best care to more patients.
Provide excellent (and tactile) care.
When patients come to a physical therapy clinic, they’re usually seeking expert care and advice—not something that they feel they could access on their own. In fact, it may behoove therapists to focus on providing hands-on services. “Always do what’s best for the patient,” says Heidi Jannenga, PT, DPT, ATC, “but research is also showing that passive modalities aren’t why patients are in the clinic.”
The more intensive units typically pay better than passive modalities, too. However, that should never be your guiding star. Always operate under the rules of medical necessity and provide the best care possible to your patients.
Use the rules to your advantage.
There are ways to operate within the rules in order to optimize your payment. For instance, if a payer is willing to accept claims that use either Medicare’s 8-minute rule or the AMA rule of eights, count your minutes using the rule that will allow you to bill the most units. This could majorly impact your revenue stream over time. Similarly, if you’re using a therapist assistant to provide care, consider shifting them away from Medicare patients and toward commercially insured patients (if possible) to avoid the Medicare PTA and OTA payment differential.
Check out these examples.
Now that we’ve covered the rules and how to effectively work within them, let’s run through some examples provided by John Wallace, PT, WebPT’s Chief Business Development Officer of Revenue Cycle Management.
Example One
A Medicare patient returns to your clinic to continue treatment for their frozen shoulder. After a brief patient assessment, you decide to provide the following services:
- Manual therapy (20 minutes, including patient assessment time),
- AAROM of shoulder and scapular complex (5 minutes),
- Contract relax/PNF to shoulder (8 minutes),
- Isometric strengthening in pain-free shoulder range (7 minutes), and
- Upper-extremity bike, no resistance, unsupervised (10 minutes).
Unit Breakdown
Because this patient is a Medicare beneficiary, we must follow the 8-minute rule. The total number of one-on-one service minutes is 40; additionally, we have 10 minutes of unsupervised exercise.
- 97140: 1 unit
- 97110: 1 unit
- 97112: 1 unit
In this scenario, the upper-extremity bike is not billable.
Example Two
A Medicare beneficiary returns to your clinic to continue treatment for trochanteric bursitis in their right hip. During this session, you provide:
- An ultrasound (8 minutes),
- Gait training (10 minutes),
- Manual therapy (13 minutes), and
- Therapeutic exercises (18 minutes).
Unit Breakdown
This patient is also a Medicare beneficiary, so again, these units must be calculated using the 8-minute rule. The total number of one-on-one treatment time is 47 minutes—enough to bill three units.
- 97110: 1 unit
- 97116: 1 unit
- 97140: 1 unit
Example Three
A patient with commercial insurance returns to your clinic for treatment of their lumbar strain. During this appointment, you provide:
- Therapeutic exercises (19 minutes),
- Manual therapy (13 minutes), and
- Therapeutic activities (6 minutes).
Unit Breakdown
Because this patient is insured under a commercial payer, you will likely follow the rule of eights (unless the payer contract says otherwise). Using the rule of eights, you can bill the following:
- 97110: 1 unit
- 97140: 1 unit
This is one of those tricky scenarios where the AMA rule of eights pays less than the Medicare 8-minute rule. You cannot bill for 97530 in this instance, because it was not delivered for eight or more minutes.
Example Four
A workers’ comp patient seeks continued treatment for their post-traumatic hematoma recovery. During this session, you provide:
- Manual therapy (9 minutes),
- Therapeutic activities (10 minutes), and
- Therapeutic exercises (17 minutes).
Unit Breakdown
This particular workers’ comp payer uses CPT guidelines for determining time-based codes. That means you must apply the rule of eights. In this case, you could bill the following:
- 97140: 1 unit
- 97530: 1 unit
- 97110: 1 unit
In all honesty, billing is not actually your worst enemy. It’s simply a difficult task that requires some foundational knowledge, a steady hand, and a dash of confidence. It’s more like an art than anything else—and anyone can become an artist (and an efficient one at that) with enough practice. Have billing questions? Leave ’em for us in the comment section below, and we’ll do our best to provide answers.
