Most physical therapists chose this profession to help people—not to become the world’s greatest biller. And yet, in order to stay in business long enough to truly make a difference for your patients, you’ve got to know how to make a profit—and that requires a solid understanding of PT billing. If you’re new to physical therapy, you might be feeling a little overwhelmed by the prospect, so below, we’ve provided some billing basics: 

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Codes

ICD

To properly bill for your services, you’ll need to include a diagnosis code that demonstrates the medical necessity of your care. This code—or codes—will come from the latest version of the International Classification of Diseases code set, ICD-10. According to the American Physical Therapy Association (APTA), the first-listed diagnosis code you use should be reflective of “the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the services provided.” From there, you’ll want to “list additional codes that describe any coexisting conditions.” In other words, put the primary diagnosis code first, followed by as many codes as you need to fully describe the patient’s condition.

To ensure you choose a code that’s reimbursable under your payer’s payment policy, you can always call the payer before you submit a claim. According to the APTA, “Your goal is to maximize the number of claims that are paid on the first submission and to minimize the need for appeals.” So, when in doubt, ask.

CPT

The American Medical Association (AMA) developed the Current Procedural Terminology (CPT®), which is “the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs.” According to the APTA, “when billing most third parties for services...it is necessary to utilize [CPT] codes to describe the services that were rendered. Although CPT is not an exact description of physical therapists’ interventions, it does provide a reasonable framework for billing.”

Most of the CPT codes that are relevant to rehab therapists are located in the 97000s (“Physical Medicine and Rehabilitation”). However, clinicians can bill any code as long as they can legally provide that service under state law. The APTA notes, though, that just because a provider can legally bill for a code doesn’t mean a payer will reimburse for it.

To start, we recommend PT billers familiarize themselves with the following CPT categories before submitting a claim:

  • Evaluations (97161-97163) and reevaluations (97164)
  • Supervised (un-timed) modalities (97010–97028)
  • Constant attendance (one-on-one) modalities (97032–97039) (billable in 15-minute increments)
  • Therapeutic (one-on-one) procedures (97110–97546)
  • Active wound care management (97597–97606)
  • Tests and measurements (97750–97755)
  • Orthotic and prosthetic management (97760–97762)

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Terminology

Chances are good that you already know the basics of PT billing terminology, but just in case, here’s a refresher:

  • Treatment: This includes all therapeutic services.
  • Service-based (supervised or untimed) CPT codes: These are the codes you’d use for things like conducting a physical therapy evaluation or applying hot/cold packs. For these types of services, it doesn’t matter if you complete the treatment in ten minutes or 35, because you can only bill for one code.
  • Time-based (constant attendance) CPT codes: These codes allow for variable billing in 15-minute increments when a practitioner provides one-on-one services, such as therapeutic exercise or manual therapy.
  • Order (a.k.a. referral): In some cases, a payer may require that a physician provide an order or referral for therapy that includes a diagnosis and instructions for treatment type, duration, and frequency.
  • Evaluation/Reevaluation: The evaluation typically occurs during the patient’s first visit and includes an examination (i.e., a review of historical data as well as tests and measures). It is at this point that the therapist provides a diagnosis and prognosis. A therapist should only perform a reevaluation if the patient’s condition or functional status changes unexpectedly.
  • Plan of care (POC): Based on the evaluation, the therapist works with the patient to develop a POC to help the patient meet his or her therapeutic goals. If the physician provided a referral for therapy, the therapist will build the POC around the details of the physician’s order.
  • Initial certification: Medicare requires physical therapists to obtain a physician signature on a patient’s POC within 30 days of the evaluation. The initial certification covers the first 90 days of treatment. To continue treatment past the first 90 days, therapists must obtain recertification from the physician.
  • Progress report: For Medicare patients, therapists must complete a progress report at minimum every tenth visit.
  • Discharge note: Once treatment is complete, therapists must complete a discharge note that includes a summary of the patient’s goal completion.

Forms

Most payers—and providers—prefer to bill using electronic claim forms. However, some payers do still accept paper claims. According to the APTA, the most common form is the Universal Claim Form (CMS 1500), although some payers may have their own.

Process

Per the APTA, once you provide your services, you’ll submit a bill to either your patient or a third-party payer. In some cases, however, you may actually provide the billing information to a claims clearinghouse that will then prepare your bill on your behalf. The Health Insurance Portability and Accountability Act (HIPAA) covers healthcare claim transactions, so be sure you’re compliant with the Electronic Healthcare Transactions and Code Sets Standards.

Software or Service

Many providers use billing software to prepare and submit their claims—and many electronic medical record (EMR) systems integrate with popular physical therapy billing software to eliminate the double data-entry that can often lead to errored claims. Even better, though, is an EMR that has its own built-in billing software and full-service RCM solution. That way, you know you’re getting the best of all worlds—including the very best support—regardless of whether you choose to handle your billing in-house or outsource it to the experts. For more information on finding the right billing solution, check out this article.

Verification

Before you submit your bill—actually, before you begin treatment—it’s extremely important that you verify patient demographics and insurance information (including the primary and secondary payers, if applicable). This will help ensure you submit a “clean” claim, which—according to the APTA—is one that is “complete, accurate, and in the case of a paper claim, legible.”

Copayment Collection

If your patient has a copayment or coinsurance, it’s best to collect that amount at the time of service. In most cases, it is inadvisable to waive the copayment or deductible amount, especially for private insurance beneficiaries. However, there are other ways to ease your patients’ financial burden—including offering patient financing programs. For more information on what’s acceptable, thoroughly review your insurance contracts—and as always, if in doubt, reach out to an expert in your area. 

ABNs

Should you wish to provide a Medicare patient with services that you believe aren’t covered or medically necessary, you can have the patient sign an Advance Beneficiary Notice of Noncoverage (ABN) acknowledging his or her financial responsibility after Medicare denies coverage. To learn more about the ins and outs of ABNs, read this article.

Defensible Documentation

One of the best ways to support your billing process is to ensure your documentation is defensible. Ultimately, it’ll help you demonstrate medical necessity, so you receive appropriate reimbursements. Plus, should you ever undergo an audit, you’ll be happy you spent a few extra minutes thoroughly describing each patient’s history, your interventions, and your clinical decision-making process. It’ll make a big difference in the outcome of that audit. 


There you have it: physical therapy billing basics. Looking for more advanced billing support? Check out all our other posts about rehab therapy billing here—or schedule a complimentary demo of our billing software or RCM service. Our expert billers boast a 98.5% clean submission rate; an 8% average payment increase per visit; and a 99% retention rate.

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