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The Startup Clinic's Guide to Private Practice PT Billing

You don't have to love PT billing, but to help your startup clinic succeed, you must understand it. Learn more, here.

Erica McDermott
5 min read
October 3, 2019
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Is your relationship with billing complicated at best? I get it. Figuring out how to bill insurance companies for private practice physical therapy can seem daunting, especially in light of ever-changing regulations. But unless you own a strictly cash-pay clinic, you can’t practice—or get paid—without it. I’m not asking you to love billing, but to help your startup clinic succeed, you need to understand it. Here’s how to get started:

Get credentialed.

If you haven’t already gotten credentialed, then you’ll need to start there. Why is credentialing so important? Depending on your patient’s specific insurance policy, if you don’t go through the credentialing process, you may not receive payment for your claims. Furthermore, being credentialed with an insurance company is the first step toward becoming an in-network provider. This is especially important for Medicare, because you can only receive full reimbursement as a contracted provider. In fact, if you choose not to have any relationship with Medicare, you cannot treat—or collect payment from—Medicare patients for any Medicare-covered services.

Additionally, being a credentialed provider often gives you more exposure—and can make it possible to develop referral relationships with other in-network providers. Patients often check their insurance company’s website for a list of local providers; if you aren’t a credentialed provider with that company, you won’t be on their list.

New to PT billing? Learn why WebPT is the best billing partner for startup clinics here.

However, getting credentialed isn’t exactly a short, simple process, and there are some hoops you must jump through, including obtaining:

  • malpractice insurance
  • an NPI,
  • an actual clinic location, and
  • a license to provide services in your state.

Plus, if any of your therapists previously worked at another clinic, you’ll need to determine whether they were credentialed and/or contracted individually or as part of a group. If they don’t have their own contract, they likely aren’t covered.

If you need help navigating the credentialing process, consider reaching out to an established local private practice therapist for advice—or seeking the assistance of a paid consultant who can take care of the paperwork for you.

Then, get contracted.

As Kylie McKee explains here, once you’re credentialed with a particular payer, that “payer will extend a contract for participation.” In other words, the insurance company will make you an offer to participate as an in-network provider. According to Asia Giuffrida—our Therabill Onboarding Team Lead—there’s a trade-off to being contracted. On the one hand, you’re required to play by the payer’s rules when it comes to what you can charge—and receive via reimbursement. On the other hand, you’ll likely have more access to that payer’s beneficiaries, because as McKee explains, “patients typically receive better coverage for in-network services.”

Once you have a contract in hand, read it very carefully. Even better: Have your legal team review it. Then, consider negotiating for better terms. It never hurts to ask for what you want. In fact, we created an entire guide to help you negotiate payer contracts to better align them with your value. Once you and the payer land on an agreement, you’ll receive an effective date and a provider number, which you can use to bill the insurance company and receive in-network reimbursement.

To learn more about the difference between credentialing and contracting—as well as Medicare-specific rules—check out Mckee’s post in full.


Catch up on billing codes.

Billing is a numbers game—and thanks to ICD-10, it’s a letters game, too. Confused? Read on.


Developed and maintained by the American Medical Association (AMA), the Current Procedural Terminology (CPT®) is a registered trademark of the AMA and is “the most widely accepted medical nomenclature used to report medical procedures and services under public and private health insurance programs.” According to the American Physical Therapy Association (APTA), most third-party payers require PTs to bill using CPT-4 codes (coding for interventions) for services rendered—not diagnoses.

It’s important for your billing team to understand how CPT codes work. In this article, the American Academy of Orthopaedic Surgeons (AAOS) identifies the key service categories you need to know, including:

  • Evaluations and reevaluations
  • Supervised (untimed) modalities
  • Constant attendance (one-on-one) modalities (billable in 15-minute increments)
  • Therapeutic (one-on-one) procedures
  • Active wound care management
  • Tests and measurements
  • Orthotic and prosthetic management

Many of the above rehab therapy-relevant CPT codes are located in the 97000s (if they were zip codes, we’d be hanging out in Oregon—go Beavs!), but they aren’t the only codes you’ll use, because “a provider can bill any code as long as the provider can legally render that service according to state licensure laws.” But biller beware: the APTA warns that providers don’t have to reimburse for codes “just because a code exists and is utilized by a provider,” so you’ll want to check each payer’s payment policy.

Want to know which codes the American Academy of Orthopaedic Surgeons believes PTs and OTs should get to know prior to billing for their services? Download The Complete Guide to Physical Therapy Billing. Want to know the national payment amount for the top Rehab Therapy CPT Codes? Check out this blog post.


The latest and greatest in the International Classification of Diseases officially came in to play on October 1, 2015. Since then, all HIPAA-covered entities must report ICD-10 codes instead of ICD-9 codes in order to receive reimbursement for their services. Unlike CPT codes, ICD codes indicate diagnosis—in particular, a diagnosis that demonstrates the medical necessity of your care—so it’s a good thing ICD-10 allows for a much greater level of specificity in coding patient diagnoses.

But getting a grip on ICD-10 can take some time and effort, because the newer code set contains about five times as many codes as its predecessor—approximately 68,000 to ICD-9's 13,000. Plus, ICD-10 features an entirely new code structure with three to seven characters in an alpha-numeric combination, whereas ICD-9 codes consisted of only three to five characters with a decimal point (e.g., 813.15). To keep your cash flow moving at top speed, aim to maximize your first-time submission acceptance rate. To do so, you’ll need to train yourself on ICD-10 codes to help you get it right the first time, every time.

Be cognizant of what counts as billable time.

As explained in this uber-useful guide, billable time is usually “the time spent treating the patient. However, there are some notable exceptions.” Generally speaking, here’s what you should know about what constitutes billable time:

  • “You can’t bill for unskilled prep time.
  • “You can bill for assessment and management.
  • “You can’t bill multiple timed units due to the presence of multiple therapists.
  • “Rest periods and other break times are not billable.
  • “You can’t bill for supervision.
  • “‘Rounding up’ is a no-no.
  • “You can bill for evaluations and re-evaluations in some cases. 
  • “You can’t bill for documentation.”

Want more details on each bullet? Check out the above-cited guide.

Shore up your processes—starting with the front office.

What happens in the front office is just as important as what happens in the back office. Why? Because appropriate and successful billing starts the moment a patient walks into your practice—and doesn’t end until the patient is finished with treatment (and submits final payment). Your staff needs to work together to ensure a seamless billing process. When it comes to billing, the devil’s in the details—and there are a lot of them. Taking the time to focus on the small stuff can mean the difference between a clean claim and a denial. Here are a few things to keep in mind:

  • Teach your staff basic rehab therapy terms. It’s tough to bill correctly if you don’t understand the difference between an evaluation and an initial certification or a progress report and a reevaluation. Planning to work with a lot of direct access patients? You’ll need to train your staff on that, too.
  • Partner with the right software or service. A few folks still accept paper claims (like CMS 1500), but most payers—including Medicare—only accept electronic claims, so it’s a good idea to work with a billing vendor to prepare and submit your claims. Even better? Work with an EMR that integrates with your billing solution to eliminate double data-entry and reduce claim errors. Just make sure the vendor fully complies with HIPAA regulations.
  • Verify insurance with the patient and the insurance company. Obtain the insurance company name, ID number, and group number from the patient; then, contact the insurance company to make sure the patient’s plan is active and covers rehab therapy. While you’re on the call, determine if the insurance company requires a referral or preauthorization before you can begin treatment.
  • At each visit, confirm and collect the patient’s copay (or coinsurance) and double-check deductibles. Make sure the patient isn’t behind on payments and that previous claims haven’t been denied. You also need to confirm and/or update the patient’s insurance. A new calendar year or a new job can dramatically change insurance plans, copays, and deductibles.

Ensure your documentation is defensible.

This might not seem like an overt billing strategy, but it is—because your ability to receive reimbursement for your services depends on the defensibility of your documentation. In other words, in order to get paid, your documentation must support the medical necessity of your services—as well as your clinical judgment for providing a particular service to a particular patient. As the APTA explains, “documentation throughout the episode of care is a professional responsibility and a legal requirement. It is also a tool to help ensure safety and the provision of high-quality care and to support payment of service.”  So basically, defensible documentation is crucial. As we explained here—per this Rehab Management article, which is still very relevant a decade after it was written—there are nine basic tenets of defensible documentation:

  1. “It’s legible.
  2. “The diagnosis—or the specific limitation(s) or deficit(s) indicated within the evaluation—clearly supports the provider’s decision to provide rehabilitative services.
  3. “The results of the assessment and evaluation support the estimated treatment frequency and duration.
  4. “It includes the plan of care and measurable goals (as well as any changes to the plan or goals, along with supportive reasoning).
  5. “It clearly states what treatment was provided, including the time spent administering each procedure or modality. Furthermore, each treatment note justifies the number of units billed (in accordance with the 8-minute rule).
  6. “It includes detailed information about the patient’s progress—or lack of progress—that justifies the necessity of continued care.
  7. “The provider’s name and professional designation appear at the end of every entry.
  8. “It includes patient and caregiver comments throughout treatment (addressing things such as the patient’s progress, unusual events, changes to physician orders, and complaints).
  9. “At discharge, it includes an objective summary comparing the patient’s status when treatment began to his or her status at the end of treatment.
  10. Bonus: “While this line item wasn’t included in the Rehab Management list, defensible documentation also adheres to all compliance regulations, including things like MIPS.”

To make sure your documentation is defensible enough to support your patients and ensure you get paid, download your free copy of our Defensible Documentation Toolkit here. It includes a handy checklist you can use to audit your own documentation (because better you than Medicare).

-It would be impossible to completely cover all the ins and outs of startup billing in one blog post, but this article should help you get more comfortable with this complicated—yet critical—piece of your business. Once you’ve conquered the basics, we’ve got some tips to help you maximize your billing and optimize your claims. Totally overwhelmed and considering letting someone else take over your billing? Check out this post to determine the right billing method for your practice. And if you haven’t already done so, we strongly recommend that you download your free copy of the Complete Guide to PT Billing. It’s chock-full of even more detailed billing how-tos.

Learn everything you need to know about PT billing—all in one super useful resource.

Enter your email below to get your free copy of the Complete Guide to Physical Therapy Billing today.


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