You became a physical therapist to help people; you didn’t do it for the money. But in order to stay in business long enough to actually make a difference in your patients’ lives, you absolutely must bill—and collect payment—for your services. (How else do you plan to keep the lights on?) For physical therapists, physical therapy billing is a fact of life—like death and taxes—but that doesn’t mean the process should be overwhelming. And that’s true whether you’re a seasoned veteran or a fresh graduate.
Read on to learn everything you need to know about physical therapy billing—well, a lot of it, anyway.
What are the Codes?
The International Classification of Diseases (ICD)
In order to successfully bill for your services, you’ll need to diagnose your patients’ conditions in a manner that demonstrates the medical necessity of those services—and you’ll need to do so using the latest version of ICD, which, as of October 2015, is ICD-10. Given the complexity of the new coding system, it can be difficult to decide which code—or codes—to use. The advice that the American Physical Therapy Association (APTA) recommends for selecting the right ICD-9 code holds true for ICD-10 codes as well: select the most specific “code that most accurately describes the condition you are treating based on the objective evidence.” See the most common ICD-10 codes used in PT here.
If you’re ever in doubt as to whether your codes are reimbursable under your payer’s payment policy, call the payer before submitting the 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.” In other words, in this case, it’s much better to ask for permission than for forgiveness.
The Current Procedural Terminology (CPT)
Developed by the American Medical Association (AMA), the Current Procedural Terminology (CPT®) 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-4 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 rehabilitative therapists are located in the 97000 section (“Physical Medicine and Rehabilitation”). However, you can bill any code that best represents the service you provide as long as you can legally provide that service under state law. Be forewarned, though: just because you can legally bill for a code doesn’t automatically mean that a payer will reimburse you for it. When in doubt, always check with your payers before providing the service in question.
According to the American Academy of Orthopaedic Surgeons (AAOS), all physical and occupational therapists should get to know the following CPT categories before billing for their services:
- Evaluations (97001 for PTs and 97003 for OTs) and reevaluations (97002 for PTs and 97004 for OTs)
- Supervised (untimed) modalities (97010–97028)
- Constant attendance (one-on-one) modalities (97032–97039, which are 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)
One-on-One Services vs. Group Services
If you’re providing group therapy services, you should not use one-on-one CPT codes, because this can increase your risk of an audit. So, what are one-on-one services? They’re individual therapy services—ones that involve direct, one-on-one contact with a patient. During her Ascend 2015 presentation, Deb Alexander explained that these codes are cumulative, require constant attendance, and are time-based, which—as this article points out—means that the 8-minute rule applies. (See how many units you can bill based on treatment time.)
Now, even if you’re working with more than one patient at a time, you still can provide—and bill for—one-on-one services. That’s because CMS allows these one-on-one minutes to occur continuously or in intervals—as long as those intervals are “of a sufficient length of time to provide the appropriate skilled treatment in accordance with each patient's plan of care.”
Group therapy still requires constant attendance, but it does not involve one-on-one contact with the patient. Rather, CMS writes that it “consists of simultaneous treatment to two or more patients who may or may not be doing the same activities.” So, if you’re providing attention to more than one patient at a time with only “brief, intermittent personal contact,” you should bill one unit of group therapy to each patient.
To learn more about the differences between billing for one-on-one services and group services, read this article.
Are you making billing mistakes that could land your practice in payer purgatory?
Watch our 7 Deadly Sins of PT Billing webinar to find out.
What’s the Terminology?
- Treatment: All therapeutic services.
- Time-based (constant attendance) CPT codes: These codes allow for variable billing in 15-minute increments when a practitioner provides a patient with one-on-one services such as therapeutic exercise or manual therapy.
- Service-based (supervised or untimed) CPT codes: These are the codes therapists use to perform services such as conducting an evaluation or applying hot/cold packs. It doesn’t matter if you complete these types of treatments in 5 minutes or 45, because you can only bill for one code.
- Order (a.k.a. referral): In some cases, a physician will provide an order for therapy that includes a diagnosis and instructions for treatment type, duration, and frequency.
- Evaluation: The evaluation typically takes place on the patient’s first visit and includes an examination, which consists of a review of historical data and symptoms as well as performance of tests and measures. It is at this point that the therapist provides a diagnosis and prognosis. (Therapists should perform a reevaluation only if the patient’s condition or functional status changes unexpectedly.)
- Plan of care: Based on the evaluation—and the physician’s order, if applicable—the therapist works with the patient to develop a plan of care to help the patient meet his or her therapeutic goals.
- Initial certification: Medicare requires ordering physicians to “approve or certify the plan of care via signature in a timely manner (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 receive re-certification from the ordering physician.
- Progress report: For Medicare patients, therapists must complete a progress report at minimum every tenth visit (or within 30 days of the first treatment)—whichever comes first.
- Discharge note: Once treatment is complete, therapists must complete a discharge note that, according to the AAOS, “details the patient’s treatment and status since the last progress note.” (Note that “writing the progress note and discharge note are not separately billable services for the therapist, but are required for Medicare documentation.”)
What are the Forms?
Today, most payers—and providers—prefer electronic claim forms. However, some payers—a dwindling few—do still accept paper ones. The most common form is the Universal Claim Form (CMS 1500), although some payers may request that you use their own.
Once you provide your services, you’ll submit a bill to either your patient or a third-party payer. Occasionally, you may actually submit your billing information to a claims clearinghouse that will create the bill and send it out on your behalf.
The Health Insurance Portability and Accountability Act (HIPAA) covers healthcare claims transactions, so be sure your clinic remains compliant with the Electronic Healthcare Transactions and Code Sets Standards.
What’s the Process?
Choose a Software or Service
A lot of providers use a billing software to prepare and submit their claims. The really smart ones use an electronic medical record system that integrates with top-notch therapy billing software. That way, they eliminate double data-entry—as well as the errors associated with it. If you choose to go this route, be sure your solution is fully HIPAA compliant. To learn more about selecting the right billing software for your clinic, read this article. In case you’re wondering, even cash-based practices need a great integrated billing software.
If you’re looking for a more hands-off solution, you could always outsource your billing to a PT-specific billing service whose team of pros will handle all of your revenue cycle management, including maximizing your reimbursements and minimizing denials. That way, you don’t have to think about beefing up your billing staff or staying on top of the often-confusing claims process.
If you haven’t already received credentialing, you may want to consider changing that. Being credentialed by an insurance company allows you to become an in-network provider, which may help you reach—and serve—a larger pool of potential patients. Some payers—like Medicare—do not allow uncredentialed providers to treat or collect payment from patients for any covered services. However, getting credentialed isn’t exactly easy. You have to obtain:
- malpractice insurance,
- an NPI,
- a physical clinic location, and
- a license to practice in your state.
If you have questions about the credentialing process, consider seeking the advice of a consultant or an established PT in your neighborhood. He or she may be able to help you complete the paperwork as well as provide tips and tricks for ensuring its acceptance.
Negotiate Payer Contracts
Just as rules are (sometimes) meant to be broken, contracts are (always) meant to be negotiated. This especially holds true when it comes to your private payer contracts. After all, these rates establish what you’re able to earn—and that number should be an accurate reflection of the value of your services. Before you broach the subject of a rate increase with your payers, though, here a few things you should do to ensure you’re fully prepared to get the best deal:
- Familiarize yourself with the terms of your existing contracts, including the expiration and renewal dates as well as how far in advance you need to submit a request for modification. Some experts—like Jeff Milburn of the Medical Group Management Association—believe that providers who consistently ask for small rate adjustments each year achieve better results than those who sporadically ask for a big bump. And—before you sign your John Hancock on any new contracts—be sure you understand what the contract is actually saying. In other words, decipher the legalese. Check out this article to learn which phrases to be wary of.
- Identify what your clinic is receiving from your top ten payers for each CPT code; then, based on that information, set goals to help guide your negotiations.
- Calculate your weighted averages for all existing contracts. Here’s how:
- Create a spreadsheet for each payer that contains all of your CPT codes as well as the number of times you billed each code for that payer.
- Multiply the frequency of each code by the payment amount listed in your contract.
- To get the weighted average for that particular payer, divide the sum of your totals by the number of codes billed. Once you’ve established this number for all of your payers, you can determine which contracts are the most financially valuable to your clinic.
- Last, but definitely not least, bring in the big guns (i.e., data) to demonstrate your value. If you want to convince a particular payer that your services are worth more than you’re currently being paid for them, you best be able to back up your claim with some cold, hard objective facts. That requires regularly and systematically collecting outcomes data, including functional improvement figures and patient and referrer satisfaction levels. Looking for an easier way to turn your outcomes data into actionable information you can really use? WebPT offers the only fully integrated outcomes tracking software for physical and occupational therapists.
Verify Patient Info
Before you begin treatment—ideally before your patient even arrives for his or her first appointment—you or your front office staff members should verify patient information, the financially responsible party, and insurance information, including primary and secondary plans, if applicable. This means not only obtaining the insurance company name, ID number, and group number from the patient, but also contacting the insurance company to make sure the patient’s plan is current and that it covers your services. It’s also a good idea to determine whether the insurance company requires a referral before you begin treatment.
If your patient’s insurance requires him or her to pay a copay, you can collect that payment when you provide your services. In most cases, it is not a good idea to waive the copayment or the deductible. However, there are other ways to provide financial aid to patients who need it. To learn more about what your payers find acceptable when it comes to helping patients cover the cost of your services, thoroughly read your insurance contracts. If you can’t locate the answers in your contracts, contact the payers directly.
Issue ABNs (When Applicable)
In order to provide Medicare patients with services that you believe are either not covered by Medicare or are not medically necessary, you must have your patient sign an Advance Beneficiary Notice of Noncoverage (ABN), thereby assuming financial responsibility if—but really more like when—Medicare denies the claim. To learn more about how to correctly administer an ABN, read this article.
Create Defensible Documentation
Ensuring your documentation is defensible is one of the most important things you can do to support your billing processes. This will help you demonstrate medical necessity, and thus, get paid. Plus, if you ever find yourself on the wrong side of an audit, you’ll be happy you spent an extra few minutes thoroughly describing your patient’s history, your skilled interventions, and your clinical decision-making process. It’ll make a big difference in your ability to justify your requests for payment.
Make it a Team Effort
Complete and accurate billing requires a team effort, because, as we mentioned above, the billing process begins before the patient even enters your clinic—and it doesn’t end until the patient has finished his or her treatment and you’ve gotten paid. Here’s something you can do to ensure your team is playing like—well—a team: teach everyone on your staff clinical terminology. It’s challenging enough to bill correctly if you’re a PT rockstar; but if you don’t understand the difference between an evaluation and an initial certification or a progress report and a reevaluation—forget about it. Planning to work with a lot of direct access patients? You’ll need to brush up on the ins and outs of that, too—and then share your knowledge with your staff.
What are Some Frequently Asked Billing Questions?
Here are the some of the most common questions PTs, OTs, and SLPs have about billing.
How do I use modifiers?
You may need to apply modifier 59 if you provide two wholly separate and distinct services during the same treatment period. Learn more about modifier 59.
The KX modifier is part of the automatic therapy cap exceptions process. If you believe it is medically necessary for a patient who has already reached the cap to continue therapy—thus qualifying the patient for an exception—you would attach the KX modifier and clearly document your reasons for continuing treatment.
If you issue an ABN because you believe that certain services are not medically reasonable and necessary, then you should add the GA modifier to the claim to signify that you have an ABN on file. (Please note that if you use the GA modifier, you should not use the KX modifier.)
Speaking of ABN-related modifiers, there are three more you should know about:
- GX: Indicates that you issued a voluntary ABN for a non-covered service.
- GY: Indicates that you performed a non-covered service, but an ABN is not on file. (In this case, the patient is inherently liable for charges because the service is not covered.)
- GZ: Indicates that you expect the service to be denied because it isn’t medically necessary, but you do not have an ABN on file. (In this case, the patient is not responsible for payment.)
Do you know your modifiers? Test yourself.
What does “locum tenens” mean?
“Locum tenens” means “placeholder” in Latin. It refers to a person who temporarily fulfills the duties of another. While physicians are able to simply add a Q6 modifier to the treatment claim to indicate that a replacement physician provided those services, PTs, OTs, and SLPs may not. Learn how to successfully navigate the “bill as” problem.
What is MPPR?
In 2012, CMS began reducing payments for multiple therapeutic procedures performed during the same visit. This is known as the Multiple Procedure Payment Reduction (MPPR). Learn four key things you should know about MPPR changes here and how to manage MPPR in your clinic.
What is the 8-Minute Rule?
The 8-Minute Rule (a.k.a. "the rule of eights") determines how many service units therapists can bill to Medicare for a particular date of service. According to the rule, you must provide direct treatment for at least eight minutes in order to receive reimbursement from Medicare for time-based codes. Learn everything you need to know about the 8-Minute Rule.
How do I bill for co-treatment?
Therapists who bill under Medicare Part B cannot bill separately for the same or different service(s) provided to the same patient at the same time. Therapists who bill under Medicare Part A may bill separate, full treatment sessions with a patient as long as each therapist is of a different discipline and provides different treatments to the same patient at the same time. Get more clarity on billing for co-treatment and see examples.
What billing behaviors should I avoid?
If you’re billing Medicare, here are a few risky behaviors to steer clear of:
- Billing for services furnished by aides or techs
- Submitting claims for services that you know are not reasonable and necessary
- Billing for excessive duration and frequency of services
- Billing under another rendering provider
What should I know about ICD-10 and my billing claim forms?
- The current 1500 claim forms accommodate ICD-10 codes.
- You should still use CPT codes to denote services provided.
- You can list up to four diagnosis pointers per service line.
- You should order multiple diagnosis codes according to significance.
There’s more. Read this post to learn the rest.
When should I bill for a re-evaluation?
You should only bill for a re-evaluation (97002 for PT or 97004 for OT) if one of the following situations applies:
- You note a significant improvement, decline, or change in the patient’s condition or functional status that was not anticipated in the plan of care (POC).
- You uncover new clinical findings during the course of treatment that are somewhat related to the original treating condition (i.e., a new diagnosis to add to the POC).
- The patient fails to respond to the treatment outlined in the current POC, so a change to the POC is necessary.
- You’re treating a patient with a chronic condition, and you don’t see the patient very often.
- Your state practice act requires re-evaluations at specific time intervals.
What constitutes billable time?
In most cases, billable time is the time spent treating a patient. However, there are some notable exceptions (e.g., you can’t bill for supervision). Check out this blog post to learn more about when to bill and when not to bill.