The complex world of Physical Therapy Billing can be a daunting one, with its myriad of codes, strict guidelines, and potential pitfalls. However, understanding this process is crucial for any physical therapy practice, not only to ensure appropriate payment for services rendered but also to maintain a healthy revenue cycle. This comprehensive guide aims to demystify the PT billing process, providing you with key concepts, common errors to avoid, and a reliable checklist to optimize your revenue cycle
Understanding the Basics of Physical Therapy Billing
Physical therapy billing codes are standardized codes used to describe the services provided during a therapy session. These codes are necessary for insurance companies to determine the appropriate reimbursement for each service. There are two main types of codes used in physical therapy billing: ICD-10 codes and CPT codes.
ICD-10 Codes
ICD-10 codes, also known as International Classification of Diseases, Tenth Revision codes, are diagnosis codes used to identify the patient's condition or injury. These codes provide specific information about the medical necessity of the therapy services. For example, if a patient is receiving therapy for a sprained ankle, the corresponding ICD-10 code would be S93.4.
CPT Codes
CPT codes, or Current Procedural Terminology codes, are used to describe the specific procedures or services performed during a therapy session. These codes, also knowns as "pt charges" provide detailed information about the type of therapy performed and the duration of the session. CPT codes are essential for accurate billing and reimbursement.
Common CPT Codes in Physical Therapy
Here are some common CPT codes used in physical therapy:
Evaluation Codes
Physical therapy begins with an evaluation, which sets the stage for the treatment plan. The complexity of the evaluation determines which of the following codes is used:
97161: Physical therapy evaluation, low complexity
97162: Physical therapy evaluation, moderate complexity
97163: Physical therapy evaluation, high complexity
97164: Physical therapy re-evaluation
Treatment Codes
Following the evaluation, the PT will perform a variety of services or treatments, each with its corresponding CPT code. Here are some of the most commonly used codes:
97110: Therapeutic Exercise
CPT Code 97110 refers to strength, endurance, flexibility, and range of motion exercises, billed in 15-minute increments after 8 minutes of service. The physical therapist can only bill for one unit unless the service exceeds 22 minutes. This physical therapy cpt code necessitates direct patient contact. It's often mistaken for therapeutic activity, but they differ in billing. Therapeutic activity has a higher reimbursement rate due to the greater skill required compared to therapeutic exercise or neuromuscular re-education. Insurance companies view therapeutic exercise as less skilled, thus warranting lower compensation.
97112: Neuromuscular Re-Education
Neuromuscular re-education involves exercises to retrain brain-muscle control, facilitating effective movement. Billing is typically in 15-minute units, adhering to the 8-minute rule. The goal is to improve posture, movement, balance, coordination, kinesthetic sense, and proprioception in both sitting and standing activities.
97116: Gait Training
Gait training involves a set of exercises designed to help a patient with standing and walking capabilities. Its main goal is to strengthen the leg muscles and joints, improve balance and posture, and increase endurance. Furthermore, it focuses on improving muscle memory and retraining leg movements through consistent repetition. Common reasons for requiring gait training include...
97140: Manual Therapy
Manual therapy is "hands-on mobilization by a licensed PT or supervised assistant." Its main goal is to enhance joint and soft tissue mobility, reduce joint contracture, and boost muscle energy. This is achieved through resistance and pressure, including "manual resistance exercise" to improve muscle strength, endurance, and energy.
97530: Therapeutic Activities
The code in this section pertains to services involving direct patient contact, aimed at improving the function of muscles and other tissues. These "dynamic" exercises, requiring strength, balance, and flexibility, help in muscle memory due to their repetitive nature, enabling safe practice outside therapy. A skilled physical therapist is needed for these exercises to correct and guide patient movements, preventing injuries and ensuring proper technique mastery.
One-on-One Services vs. Group Services
It is important to differentiate between one-on-one services and group services when billing for physical therapy. One-on-one services involve direct patient care with one therapist, while group services involve multiple patients receiving therapy simultaneously under the supervision of one or more therapists. Each type of service has its own specific billing requirements and reimbursement rates.
Physical Therapy Billing Units
Physical therapy billing units refer to the measurement used to quantify the duration of therapy services provided to a patient. The most common unit of measurement is the 15-minute increment. Understanding how to accurately calculate and report billing units for physical therapy is crucial for proper reimbursement.
CMS 8 Minute Rule
The Centers for Medicare & Medicaid Services (CMS) 8-minute rule is specifically designed for time-based billing of therapeutic services. Here's how it works:
A "unit" of service is defined by a 15-minute increment of therapy.
For a single service to be billable as one unit, the therapist must provide the service for at least 8 minutes.
If multiple services are provided, the total treatment time must be at least 8 minutes to bill for a unit. The total time of service determines the number of units billed.
The rule includes a cumulative calculation where the total minutes of service are added together. If the total duration reaches certain thresholds, it translates into billable units. For example, 8-22 minutes equates to 1 unit, 23-37 minutes to 2 units, and so on.
Mixed Remainders
When calculating physical therapy billing units, it is important to understand how to handle mixed remainders. If the total duration of timed services is not divisible by 15, the remaining minutes should be rounded down to the nearest whole number. For example, if the total duration is 27 minutes, it would be billed as two units, not three.
AMA Rule of 8
In addition to the CMS 8 Minute Rule, the American Medical Association (AMA) has its own guideline called the Rule of 8. This rule follows the Substantial Portion Methodology (SPM), which prohibits the accumulation of mixed remainder time.
The Rule of Eights continues to calculate billable units in 15-minute intervals. However, rather than aggregating time across several units, this rule is independently applied to each distinct timed service, thereby restricting the combination of leftover time.
Physical Therapy Billing Modifiers
Physical Therapy Modifiers are alphanumeric codes added to CPT codes during billing. Modifier usage provides additional information on the services provided, which helps in processing claims and ensuring proper reimbursement. A physical therapy biller should familiarize themselves with the most common modifiers below.
GP Modifier
The GP modifier is used to indicate that a PT's services were provided. The GP modifier is the most common and most important modifier used to ensure physical therapy reimbursement.
Modifier 59
signifies that a distinct service or procedure was performed separately from another non-evaluation and management service. It's vital in ensuring that both services comply with the National Correct Coding Initiative.
KX Modifier
A crucial aspect of physical therapy medicare billing The KX modifier is used when services provided to a patient exceed Medicare’s therapy threshold. This modifier ensures that continued treatment is justified with appropriate documentation in the patient's medical record.
GA Modifier
The GA modifier indicates that a required Advance Beneficiary Notice of Noncoverage (ABN) is on file for a service considered not medically necessary. This allows the provider to bill a secondary insurance for non-Medicare-covered services or bill the patient directly.
CQ Modifier
The CQ modifier is used to indicate that a service was provided in whole or in part by a physical therapist assistant (PTA). This modifier is crucial for Medicare patients, as it allows for proper billing and reimbursement when a PTA is involved in the care.
Charging Copay
Collecting copays from patients is an essential part of the billing process. A copay is a fixed amount that patients are required to pay at each therapy session. The amount of the copay is determined by the patient's insurance plan and should be collected at the time of service. It is important to communicate clearly with patients about their copay responsibilities and provide them with the necessary information to make payment.
Collecting Patient Balances
In addition to copays, it is also important to collect any outstanding patient balances. Patient balances are amounts owed by patients for services rendered that are not covered by insurance. This may include deductibles, co-insurance, or non-covered services. It is important to have a clear and transparent process for collecting patient balances and to communicate with patients about their financial responsibilities.
What is EOB?
EOB stands for Explanation of Benefits. An EOB is a document sent by the insurance company to the patient and the healthcare provider to explain the reimbursement decision for a claim. It provides detailed information about the services billed, the amount paid by the insurance company, and any remaining patient responsibility. EOBs are important for understanding the payment status of claims and for reconciling accounts receivable.
What is an ERA?
ERA stands for Electronic Remittance Advice. An ERA is an electronic version of the paper Explanation of Benefits (EOB). It is a standardized file format that contains detailed information about the reimbursement decision for a claim. ERAs are typically sent electronically by insurance companies and can be imported directly into practice management software for automated claims processing and payment reconciliation.
Strategies for Optimizing Physical Therapy Billing
Optimizing your physical therapy billing process can lead to a significant increase in revenue and efficiency in your practice. Here are some top strategies to consider:
1. Insurance Eligibility Verification
A recent report found that 61% of denied medical claims were due to eligibility and registration errors, which include failing to verify patient information and insurance eligibility. (Source: American Medical Association) Accurate patient information is the cornerstone of a successful billing process. Make it a practice to verify patient information at every visit. Additionally, always confirm patient insurance eligibility to ensure the services provided will be covered.
2. Understand and Correctly Use Physical Therapy Billing Codes
Understanding and correctly using ICD and CPT codes is crucial. This not only includes choosing the correct codes but also understanding when and how to use modifiers and other billing tools. Training and ongoing education for your billing staff can help ensure this understanding.
3. Implement Technology and Automation
Physical therapy billing software can play a significant role in optimizing your physical therapy billing process. From automating eligibility checks to simplifying code selection and improving claim submission, medical billing software can significantly reduce the time and effort required for billing.
4. Regularly Audit Your Billing Process and Results
Regular audits of your billing process and results can help identify areas of improvement. Dive into denial reasons, denials by payer, collections rates, AP aging, etc...
5. Partner with a Reliable Billing Provider
Partnering with a reliable billing provider can take much of the stress out of physical therapy billing. They can handle the complexity of the process, allowing you to focus on providing excellent patient care. Consider a company like PatientStudio that can manage your physical therapy billing services.
Common Mistakes and Pitfalls in Physical Therapy Billing
Despite your best efforts, mistakes can happen in the physical therapy billing process. However, understanding the most common pitfalls can help you avoid these errors. Here are some common mistakes to watch out for:
Inaccurate Patient Information: Ensure your patient's information is correct and up-to-date. Incorrect information can lead to claim denials. 90% of all claim rejections (different than denials) were the direct result of errors such as incorrect ID number, birthday, name spelling, etc..
Not Verifying Insurance Coverage: Always verify insurance coverage before providing services. This can prevent surprises later and ensure you get paid for your services. Utilize modern practice management software that offers electronic eligibility checks
Incorrect or Incomplete Coding: This is one of the most common reasons for claim denials. Be sure to use the correct and complete ICD and CPT codes for the services provided.
Not Following Up on Denied Claims: Denied claims can be a significant source of lost revenue. Always follow up on denied claims, make necessary corrections, and resubmit them. A staggering 65% of all rejected claims are never revised, according to Change Healthcare. This a huge figure in lost revenue! For clinics to receive reimbursement for physical therapy services, they must establish a denial management process.
Not Collecting Patient Payments: Often times there will be a certain amount of "patient responsibility" remaining on the claim balance. Depending on their insurance plan and benefits and patient's will have a balance due after insurance has paid their portion. Practices should have an efficient process for collections and payment posting.
The Physical Therapy Billing Checklist: A Guide to Optimizing Your Revenue Cycle
Optimizing your revenue cycle is all about streamlining your physical therapy billing process. This checklist provides a step-by-step guide to help you achieve this:
Collect Patient Information: Gather all necessary patient information, including contact details and medical history. We recommend digital patient intake.
Verify Insurance Benefits: Confirm the patient's insurance coverage and understand what services are covered. We recommend electronic eligibility checks.
Obtain Pre-Authorization: If necessary, obtain pre-authorization for services from the insurance company.
Provide Services: Deliver the necessary therapy services and treatment to the patient. Document the encounter. We recommend physical therapy documentation software or evaluation templates.
Capture Charges: Accurately document the services provided using the correct ICD and CPT codes and units. We recommend physical therapy billing software to automate charge capture and unit calculation.
Submit Claims: Submit the claim to the insurance company, ensuring all information is accurate and complete. We recommend physical therapy practice management software
Post ERA or EOB: Post the Explanation of Remittance (ERA) or Explanation of Benefits (EOB) once received. We recommend PT or medical billing software..
Collect Patient Responsibility: Collect any remaining balance from the patient, offering flexible payment options if possible. We recommend credit card processing that is integrated (auto posting) to your medical billing software.
By following this checklist, you can ensure a smooth and efficient physical therapy billing process, optimize your revenue cycle, and maintain the financial health of your practice.
Conclusion
Physical Therapy Billing may be complex, but understanding its intricacies is essential for the success of any PT practice. From mastering the use of ICD and CPT codes to avoiding common pitfalls and following a reliable checklist, you can optimize your billing process, shorten your revenue cycle, and improve your practice's cash flow. With the right strategies and tools in place, you can navigate the complexities of physical therapy billing with ease and efficiency.