Optimize Your Physical Therapy Billing Process

Physical, occupational, and speech-language therapists often get into their professions due to their passion for helping others. However, the other side of working in these fields is a deep understanding of how to get paid for the services that you provide.

Physical therapy billing is a complex process that aligns what services a patient received with specific coding that is recognized by insurers and payers. Like other forms of medical billing, physical therapy billing identifies what treatments were provided and how much should be paid out to the physician.

Over a third of healthcare costs in America go towards administrative tasks. Physical therapy billing is costly from both a money and time perspective, and finding the right strategies and billing partners can pay dividends for a practice.

To save your practice’s time and money, read on for top strategies and tips that NCDS Medical Billing has gathered from years of experience with physical therapy billing.

What is Physical Therapy Billing?

As a physical therapist, occupational therapist, or speech-language therapist, the day’s to-do list includes a variety of tasks, from patient care to running a practice to managing billing.

Vital to a practice’s success is a strong comprehension of how physical therapy billing’s complex process works. With the typical physical therapy practice seeing between 100-200 patients each week, there are many patients and services provided to stay on top of.

Physical therapy billing is how physical therapists receive payment for the services provided. This process is similar to other medical billing processes. The billing process matches the services provided with standardized codes that identify precisely what treatments were given. This is so insurers and other payers can identify how much is owed.

Going through the stages of physical therapy billing can be incredibly time-consuming, especially when done manually. However, there are many ways to optimize this process to improve timing and revenue collected.

Common Physical Therapy Billing Codes and Guidelines

Similar to standard medical billing, physical therapy billing has its own set of treatments and specific codes aligned with these treatments.

When processing physical therapy billing, there are two key acronyms to know: ICD (International Classification of Diseases) and CPT (Current Procedural Terminology).

International Classification of Diseases

The ICD helps providers share the diagnosis of patients’ conditions. Physical therapy practices use the ICD to provide the diagnosis for conditions in a way that identifies the medical necessity. As of October 2015, the ICD-10 is the latest version of the ICD.

To ease the complexity for providers when identifying diagnoses, the American Physical Therapy Association (APTA) made a key list of ICD-10 codes.

Current Procedural Terminology

The American Medical Association (AMA) developed CPT codes, which provide healthcare professionals with a widely used and accepted language for coding and streamlining medical services and procedures. These codes are used in all types of medical billing for processing claims.

For physical therapy, many relevant CPT codes are in the 97000’s, which represents “Physical Medicine and Rehabilitation”.

Physical, Occupational, and Speech Therapy Billing Codes

When billing for physical therapy services, all practices should be aware of key physical therapy billing codes.

Physical Therapy Billing Codes

Full Overview of Physical Therapy Billing Codes

Starting with evaluations, physical and occupational therapy evaluations are both billed based on levels of complexity.

Physical therapy evaluation billing codes:

97161: PT evaluation, low complexity

97162: PT evaluation, moderate complexity

97163: PT evaluation, high complexity

97164: PT re-evaluation

Occupational therapy evaluation billing codes:

97165: OT evaluation, low complexity

97166: OT evaluation, moderate complexity

97167: OT evaluation, high complexity

97168: OT re-evaluation

Outside of evaluations, examples of other physical therapy billing category CPT codes include:

97010-97028: Supervised or untimed treatments

97032-97039: Constant attendance 1:1 treatments (15-minute increments)

97110-97546: Therapeutic 1:1 procedures

97597-97610: Wound care management

97750-97755: Tests and/or measurements

Popular CPT codes for physical therapy billing include:

97110: Therapeutic exercise

97112: Neuromuscular re-education

97116: Gait training

97150: Group therapy

97750: Physical performance test

97761: Prosthetic training

Popular CPT codes for speech therapy billing include:

92507: Treatment of speech, language, voice, communication, and/or auditory processing disorder

92521: Evaluation of speech fluency

92524: Behavioral and qualitative analysis of voice and resonance

92609: Therapeutic services for the use of speech-generating device

92610: Evaluation of oral and pharyngeal swallowing function

Physical Therapy Billing Guidelines

Physical therapy billing can be challenging for a few reasons:

1. There are fairly vague descriptions under CPT codes for treatments given. If insurance deems treatments provided as not medically necessary, insurance can deny a claim as a result of the CPT code that was used. Using the right CPT code is absolutely imperative to ensuring that your practice is paid in full for the services provided.
2. In order to file a bill for physical therapy services, both ICD and CPT codes will be needed - ICD codes for what’s being treated, and CPT codes to identify the solutions and services provided.
3. With thousands of codes available, the process of actually completing physical therapy billing becomes challenging, and mistakes lead to rejected claims and expensive resubmissions.

Any mistakes make major effects on the revenue cycle, which represents how long it takes to receive payment for services provided. Mistakes in turn lengthen the revenue cycle. Overall, a shorter revenue cycle means a healthier cash flow for your practice.

8-Minute Rule

The 8-minute rule is key to receiving payments from patients covered by Medicare. For constant attendance of CPT codes, physical therapists need to be providing direct treatment for at least eight minutes.

To calculate the total number of billable units under Medicare, Medicare takes the sum of one-on-one therapy minutes and divides that number by 8. If there are 8 or more minutes left over, one more unit may be billed. However, if there are 7 or fewer minutes left over, an additional unit cannot be added.

Below is a graph from MedicareFAQ.com that breaks down billable units by time spent.

Medicare’s 8-minute rule as shown by MedicareFAQ.com

One-on-One vs. Group Services

Since physical therapists provide services to both individuals and to groups, there is coding to specifically identify which type of service was provided.

One-on-one services are provided to individuals, providing direct contact with a singular patient. In instances where a physical therapist is working with more than one patient at a time, a therapist can still bill for one-on-one services.

However, group therapy does not incorporate one-on-one patient treatment. Group therapy units should be billed to each patient in group therapy sessions.

To avoid billing audits and denials, be sure to accurately and appropriately bill services based on which type of service was given - group or one-on-one.

How to Optimize Physical Therapy Billing

The United States physical therapy industry is currently valued at $48.8 billion in 2023. This industry value is expected to grow to $72.7 billion by 2029.

Maximizing revenue is crucial for evolving your physical therapy practice and providing proper patient care in a rapidly growing industry.

However, the process of billing patients and insurance companies can be tedious, costly, and frustrating. This process is a necessary endeavor, and each practice must bill for services provided. The good news is that there are many ways to continuously improve your physical therapy billing methodology.

In order to have a strong revenue cycle, there is a multitude of techniques to fully optimize your practice’s physical therapy billing.

NCDS SOLUTION: Save time and money. At NCDS, all we do is medical billing so you can focus on providing excellent patient care. Administrative costs have been estimated at 25-31% of total health care spending. You can outsource your billing for a fraction of that, reducing your level of expenses and stress!

Gather and Verify Patient Information

The first step to optimize physical therapy billing is to gather and verify your patient information on file. Inaccurate patient information leads to a direct decrease in revenue for your practice due to not being able to get in touch with patients and payers.

As a result, ensuring patient information is accurate is the best and simplest way to prevent denials. Clean claims rates increase when all patient information is verified.

There are three key steps to verifying patient information:

1: Check Patient Information

Confirm and validate patient contact information at the beginning of each visit, whether the patient is new or returning. Ask patients to confirm all contact information. This includes information such as name, home address, mobile phone number, email address, insurance information, and emergency contact. Additionally, confirm all necessary medical records are on file.

2: Confirm Patient Insurance Eligibility

Patients’ situations change. Whether they change insurances or their plan’s covered services change, there may be differences in how patients are covered and what they’re covered for. Always be sure to verify patients’ insurance at each visit to determine what services will be covered. Don’t forget to also identify who will be paying for the services.

NCDS SOLUTION: We offer tools for verifying insurance eligibility digitally through a realtime fully integrated API. Insurance eligibility is also available to you through the NCDS Client Logins. In addition, we offer outsourced Verification Of Benefits and Claim Prior Authorization services to help you streamline these front line processes, save time for your staff and customers, reduce denials, and improve your rate of return.

3: Have a Quality Check Process

Never submit a claim without conducting a quality check. Prior to claim submission, confirm that each field is filled in with the correct information. By building out a standardized process that your team conducts for each claim submission, you can save your practice from small errors that become expensive mistakes.

Determine and Agree Upon Payment Prior to Treatment

Paying for physical, occupational, and speech-language therapy can be stressful for patients. Clearly communicating payment plans and setting expectations up front avoids any unpleasant surprises for both patients and your practice.

By providing clarity and payment options, patients are aware of their payment responsibilities.

There are four major tips for ensuring payment for physical therapy billing:

1: Build a Consistent and Recorded Collections Process

Both your office and your patients should have straightforward documentation and instructions on what the process for payment collections will be. Staff members should provide collections instructions in a unified manner, and patients should have a consistent experience.

2: Clarity on Payment Ahead of Treatment

By being transparent and upfront about financial obligations, patients know what they can expect from the price of services. Transparency in costs enables patients to prepare and plan for their financial responsibilities, ensuring full payment with their insurance. 

3: Offer Multiple Payment Options

Patients have varying financial situations. To accommodate patients in their financial journey, offer a range of payment options to ensure accessibility and flexibility for everyone. 

4: Payments at Point of Service

Collecting payments upfront guarantees that your practice will not have to be in an ongoing cycle of seeking collections for the near future. When patients walk out having paid in full, your practice improves the revenue cycle and increases cash flow.

Conduct a Billing Audit

Physical therapy billing has specific rules and complications. Mistakes when working with billing and coding are inevitable and can happen to even the most seasoned employee.

When focusing on optimizing the physical therapy billing process, understanding the current procedure and determining where improvements can be made is critical. By conducting an audit of your practice’s billing process, you can determine where there is opportunity for improvement and what goals can be set.

The first place to start is by determining where the highest amount of billing errors are coming from. For example, are they data entry errors, or are they inaccuracies in patient information?

Errors and denials should be viewed as a way to learn from past mistakes and avoid these same mistakes in the future. Each denial is a learning opportunity and also has the chance to be accepted if followed up on.

Denial Tracking and Reporting

As mentioned above, denials shouldn’t be forgotten - they are fantastic learning opportunities. Tracking the number of denials and reasons for denials can help your practice learn how to improve these processes. Enhance clean claims rates by generating reports and insights on claim denials, and learn from their root causes. 

Determine Denial Reasons

A major question that all healthcare providers should answer is “Why are denials occurring?” Physical therapists should understand the underlying reasons for denied claims so they can be mitigated and avoided in the future. These common denial reasons could be incomplete medical documentation, insurance claims that are incorrect, or a myriad of other errors.

Once these reasons are understood, they can be analyzed and avoided in the future. When there is a strong understanding of common denial reasons, your practice can put standards in place to ensure that they are avoided going forward and you can get claims correct the first time around.

Get Ahead of New Denials

The best way to overturn denials is by getting ahead of them early in the process. By identifying new denials as soon as possible, there is an increased likelihood that they will be overturned. When your practice is on top of potential denials, you can ensure a healthy cash flow by receiving a timely payment from the payer.

The overall financial health of your physical therapy practice increases by heightened awareness and attention toward your potential denials.

Promptly contacting insurers who denied claims allows you to comprehend the causes and take corrective measures to reverse the denials. When action is taken as soon as possible, claims spend fewer days in accounts receivable and your practice maintains a healthier revenue.

NCDS SOLUTION: Our claims success rate is +2.6% better than our competitors.* Too many medical billing companies operate as a SAAS model, Software as a Service. At NCDS, we are a Service as a Service. Our medical billing team gets involved to provide better results, not just push claims through.

*Based on an independent third party report by RemitData for denial rate on claims, NCDS vs. National Peers.

Use Technology to Your Advantage

Physical therapy billing is a great opportunity to integrate technology into your practice. Using technologically forward capabilities such as artificial intelligence, automation, and personalization can help strengthen your physical therapy billing experience for both your patients and your staff.

Overall, investing in technology proves to be an investment in a stronger cash flow and revenue cycle. The latest technology in the medical billing space is created to make the most of patient collections with less effort from your team.

Billing Automation

Automating billing processes for physical therapy patients reduces missed bills, charges, and late payments. It also ensures that data entry errors are minimal and improves the overall speed of practice cash flow. Billing automation implementation reduces the chances of being trapped in insurance claim denial cycles and relieves the burden of physical therapy billing from your team. 

Only 10% of medical groups utilize artificial intelligence regularly, highlighting the potential benefits of implementing automation and AI into the billing process for numerous firms. 

MGMA Stat data identifying AI tool usage

Digitization of Insurance Eligibility

Recalling back to our tip of always verifying patient insurance eligibility at the top of each appointment, your physical therapy practice can also save time and money by digitizing this process.

This insurance eligibility check can be done prior to appointments, and checks can also be completed on demand. By using online verification, the eligibility process can be sped up and revenue collection can be seamless.

Develop a Patient Portal

To increase the likelihood of payment, make it easier for patients to pay their bills with your practice. Physical therapy billing benefits from bringing the payment method to the patient. Developing a secure and convenient online portal for patients to pay their bills from their homes can benefit your practice and bottom line. 

NCDS SOLUTION: Tools for verifying insurance eligibility digitally and establishing a patient portal are available to you through the NCDS Client Logins. NCDS also offers outsourced Verification Of Benefits and Claim Prior Authorization services to help streamline your front office processes, save your staff time, reduce denials, and improve your clean claim rate.

Upskill Staff

Create a positive experience for both your patients and your employees by training your staff on physical therapy billing. Data shows that finding a well-trained medical coder is the most difficult hire that impacts the revenue cycle. So, by improving your existing team’s training, you can greatly improve your billing process.

MGMA Stat data on revenue cycle hiring

Train Staff

Provide knowledge and training opportunities for your staff to learn the accurate methodologies for the billing process and revenue cycle. Ensure that your staff has one single source of truth for working with patients through the payment cycle.

Motivate Team Members

Show appreciation for your team - whether by establishing industry-competitive wages, solid company benefits, or incentives to manage and follow up on denied claims. Finding ways to take care of your team pays dividends on your practice’s bottom line.

Find a Great Billing Partner

Physical therapy billing is complex, challenging, and nuanced. All therapists have many tasks at hand in the typical day - and physical therapy billing adds to those daily responsibilities. To ensure the highest revenue possible, work with a great billing partner who knows the process inside and out.

NCDS Medical Billing is an expert at physical, occupational, and speech therapy billing. Contact NCDS to learn more about how we can help and improve your practice’s revenue cycle!

Questions?