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The 8-Minute Rule Showdown: Medicare vs. AMA

Therapists can use two different methods to calculate billable units. Are you using the right one?

Melissa Hughes
5 min read
December 29, 2021
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The guidelines for using the 8-Minute Rule are kind of like the instructions for building a piece of furniture from IKEA: They appear simple at first, but before you know it, you’ve been struggling for hours, you’ve got a lopsided futon, and there are seven leftover screws of various shapes and sizes scattered around your living room floor (maybe they’re just extras, right?). 

To make matters even more confusing, not all payers adhere to the same set of 8-Minute Rule guidelines. While the Medicare 8-Minute Rule is probably the most-referenced version of this method for calculating billable units, we can’t forget about its less-famous sibling, the American Medical Association’s (AMA’s) Rule of Eights. After all, the AMA is technically the ruler of all things Current Procedural Terminology (CPT), and that’s just what the 8-Minute Rule is for: calculating the proper number of CPT code units to bill for a particular encounter. So, how do these two 8-Minute Rule variations differ? Here’s the breakdown:

The 8-Minute Rule

The 8-Minute Rule applies not only to Medicare, but also to many different insurance plans, including some that fall under federal, state, and commercial purview. However, not every payer calculates units using the 8-Minute Rule, so best practice is to reach out to individual payers to confirm that this is the correct rule to follow. 

When billing for services under the 8-Minute Rule, you must distinguish between timed (a.k.a. constant attendance) codes and untimed (a.k.a. service-based) codes. (The CPT code book designates each CPT code as either timed or untimed.) 

Untimed Service-Based Codes

For each untimed service you provided during a given date of service, you can bill one unit, regardless of how long you spent providing the service. Easy-peasy.

Timed Constant Attendance Codes

When it comes to calculating units for timed services, things get a little more complicated. Each billable unit of a timed code represents 15 minutes of service provided to a patient. To put it simply, if you provided 30 minutes of manual therapy—which is represented by the time-based CPT code 97140—you could bill for two units.  

But as every rehab therapist knows, services aren’t always provided in perfect 15-minute increments. What, then, is the threshold for billing a full unit? That’s where the 8-Minute Rule comes in; if a therapist provides direct, one-on-one therapy for at least eight minutes, they will be paid for one unit of a time-based treatment code.

Here’s where it gets complicated. 

The most important part of the 8-Minute Rule to remember is that it only applies to “remainder minutes.” So, if you provided 35 minutes of manual therapy, you still could only bill for two units. That’s because when you divide 35 minutes by 15 minutes (the length of a full service), you get two units with a remainder of five minutes. That remainder does not meet the 8-minute threshold for billing an additional unit. 

If, instead, you had provided 38 minutes of manual therapy, you could bill three units because your remainder of eight would justify billing an additional unit.

You can get a full run-down of how the 8-Minute Rule works in this blog post, but for the sake of space, we’ll jump straight to the handy-dandy chart most therapists use to determine how many timed units they can bill for a particular date of service:

In this chart, the quantity of time in the left column represents the total timed minutes, and the quantity in the right column represents the associated maximum number of units you can bill based on the time total. Now, there are plenty of tricky scenarios that could trip up your calculation efforts—some of which are presented in these 8-Minute Rule brain teasers—but for the most part, this chart is pretty accurate.

What are mixed remainders?

And now we’ve come to the detail that might trip you up: mixed remainders. Sometimes, when you divide the total timed minutes by 15, you get a remainder that represents more than one service. For example, you might have three leftover minutes of therapeutic exercise and five leftover minutes of manual therapy. When each of these remainders stands on its own, neither meets the 8-minute threshold. However, when combined, they equal eight minutes—and according to Medicare’s billing guidelines, that means you can bill one unit of the service with the greatest time total (in this case, manual therapy).

The AMA Rule of Eights 

This is precisely where Medicare and the AMA diverge. Per AMA’s Rule of Eights guidelines, you cannot use the cumulative total of your remainders to justify billing additional units. In other words, as explained in this blog post, “If your leftover minutes come from a combination of services, you cannot bill for any of them unless one individual service totals at least eight minutes.” So, in the example above, you could not bill for any additional units, because neither the three minutes of therapeutic exercise nor the five minutes of manual therapy meet the 8-minute threshold.

In some situations, this can be a good thing for therapists. If you provide, for example, 10 minutes of manual therapy and 10 minutes of therapeutic exercise, you could then bill for two units under the Rule of Eights. Under the 8-Minute Rule, however, you could only bill one.

Got it? Great. Then we challenge you to test your mettle against these 8-Minute Rule brain teasers. In the meantime, we’re gonna kick it on the IKEA futon and hope that those extra screws weren’t supporting anything important. 


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