Physical therapy coding and billing is often misunderstood. Our goal is to lay out appropriate and compliant billing practices in simple terms that will make your documentation, and coding, easy to understand.
Physical therapy billing and coding is very dynamic and our intent is to empower our PTs with updated billing best practices to improve billing accuracy and make a difference to the PT industry as a whole. Please feel free to reach out to us with any questions or queries.
Sections
1. Evaluation Codes
2. Treatment Codes
3. Medicare 8 Minute Rule vs SPM
4. KX Modifier for Medicare
1. Evaluation Codes
Untimed vs Timed Codes for Initial Visits
During an evaluation (Initial Visit), you will likely have to use two types of codes to fully reflect the service provided.
The first code will be an untimed code called “evaluation”. This code is untimed, which means that regardless of how long it takes (20 minutes, 30 minutes, etc.), you can only specify that one untimed code for the evaluation portion of the visit.
The second code you will likely use is called a timed treatment code. Don’t forget to always specify the additional treatment codes for the care you provide during an Initial Visit. This can include exercises, manual treatment, gait training, neuro re-ed, etc.
Evaluation Complexity
Physical therapists have three choices for evaluation codes for all payers: Low, Moderate and High Complexity.
Complexity is determined via a variety of factors and is indicated in the table below:
- History
- Examination of body systems, including these elements:
- Body structures and functions - including psychological functions.
- Activity limitations: Difficulties an individual may have in executing a task, action, or activities (e.g., inability to perform tasks due to abnormal vital sign response to increased movement or activity).
- Participation restrictions: Problems an individual may experience in involvement in life situations (e.g., inability to engage in community social events due to exhaustion).
- Clinical presentation
- Clinical decision making
- Time spent during the evaluation is not necessarily indicative of the complexity
Example Scenario 1:
Maria is a 65-year-old recreational tennis player with a history of cervical disc degeneration and aching ongoing pain. She has been complaining of some neck and shoulder pain causing intermittent discomfort. She feels progressive increase in the discomfort level over the last couple of weeks. Maria complains of pain with turning her head to the L when driving, with lifting >5-7 lbs above shoulder level and also complains of pain with waking up in the morning especially on her left side sleeping. In the last couple of weeks, Maria’s pain has been shooting down the L shoulder and affects her backhand play in tennis. At its best, pain level is 0/10, but during and after playing tennis the pain level can rise to a 7/10. During evaluation, Spurling’s test is positive on L, Maria also demonstrates decreased biceps reflex and decreased sensation in C6 dermatome. ULTT test is positive for median nerve. Neck Disability Index score is 26/50 and has functional limitations with prolonged sitting, side sleeping, driving, lifting, and tennis moves.
Based on your evaluation, you would select which complexity evaluation code for Maria?
Considering that all the factors in the required components were met, a “Moderate” complexity sounds reasonable.
Example Scenario 2:
George is a 45-year-old University professor with a history of asthma and cardiac arrhythmias. He sustained an ACL injury while playing recreational soccer thus causing swelling, end range knee extension lag, difficulty weight-bearing, and walking. Patient saw MD for further testing, got diagnosed with complete ACL rupture and plans to undergo surgery in 2 weeks. George is referred to PT to improve knee extension ROM, quad activation and prehab.
In this scenario, even though several activity and participation restrictions are present, all the factors in other required components indicate Low complexity. Clinical presentation is stable with no significant change predicted. It is appropriate to bill “Low” evaluation complexity if all the required components do not indicate the higher complexity code.
Important takeaways from this section are:
- Bill timed treatment codes in addition to untimed evaluation codes for the Initial Visit.
- All payers require evaluation complexity codes as Low, Moderate and High complexity, based on the required components.
2. Treatment Codes
Most treatments are timed procedures reflecting a timed codes. Timed codes require at least 8 mins of care to allow billing a code. See below for the definitions of the timed codes we commonly use, and the supporting documentation needed.
All codes must show the skilled need for intervention by a therapist. Always code to the highest level of specificity.
Important: All skilled interventions must include level of assistance or cuing for performance of activity. Education is considered part of the active service you are providing, not as a separate code.
Here are some examples:
- If the goal of an intervention of sit to stand is eccentric quad strengthening, you may bill Therapeutic Exercise (97110) for that time.
- If the goal of an intervention is safe use and training of a wheeled walker and gait pattern education, you may bill Gait Training (97116).
- If the goal of an intervention of shoulder flexion scaption is to teach reaching a higher shelf, you may bill Therapeutic Activity (97530).
- If the goal of an intervention of shoulder flexion is to improve postural stability with scap stabilization, you may bill Neuromuscular Re-ed (97112).
Charge diversity helps paint a picture of medical necessity and maximize the value of the service we provide. Many times, therapists lump multiple activities into Therapeutic Exercise and don’t reflect that they were indeed performing Therapeutic Activities or Neuro Re-ed. Thus, the opportunity is lost to reflect the true skills of a therapist and capture the full value of the treatment.
Important takeaways from this section are:
- The purpose of what you are doing should match the definition of the billing code.
- Charge diversity proves medical necessity and ensures we are getting credit for the services we are providing.
- Ensure that supporting documentation is present to indicate the need for skilled care.
3. Medicare 8 Minute Rule vs SPM
This is likely the most complicated topic in billing. There are two types of billing methods - SPM and 8 Minute Rule.
In this section you will learn that we don’t need to bill everyone the same way, and commercial payers often have rules different than Medicare. In fact, you will find that how you bill for commercial payers is considerably less restricted than Medicare.
Medicare 8 Minute Rule
According to the Medicare 8 Minute Rule, a CPT code can be used if at least 8 minutes of time is spent with the patient.
For all Medicare and Federal payers like Medicare, Tricare, Medicare Advantage, the above chart is helpful to determine the number of codes that can be billed. Use the 8 Minute rule even when Medicare is a secondary payer.
For a typical Luna visit to a Medicare patient, we would see 53 minutes of service time resulting in 4 units of billable time.
SPM Method: Substantial Portion Methodology
SPM is used by most commercial payers. If this is new to you, then it will be a method you will quickly learn. Not adapting to SPM results in considerable lost reimbursements.
SPM basically tells us that a code can be billed if a substantial portion of each 15 minute unit was used to provide treatment. A substantial, or majority, portion of 15 minutes is about 8 minutes or more. This sounds similar to the 8 minute rule, but the big difference is that it does not account for total treatment time- so you don’t have to limit billing to 3 codes for a 45 minute session.
Capping at 3 units for 45 minutes would be poor billing practice as it significantly affects the reimbursements for our patient visits. Most times, this is not explained clearly to therapists and we lose the opportunity to create the right value for the service we provide.
Let’s take a look at an example of a Standard Visit and how it is billed differently by the two methods.
Let’s take another example to compare the two methods:
Another interesting scenario to consider is shown here:
Important takeaways from this section are:
- Medicare 8 Minute Rule applies to all Medicare (Regular Medicare and Medicare Advantage) and Federal payers such as Tricare.
- SPM method applies to commercial payers (e.g Blue Shield, Aetna, Cigna, etc.).
- Only one billing method can be used during a single visit.
4. KX Modifier for Medicare
Medicare no longer has a cap, and instead has predefined thresholds for ensuring medical necessity.
Outpatient therapy delivered beyond $2,010 needs a KX modifier indicating ongoing medical necessity. The intent of the KX modifier is about providing autonomy to therapists and defining the medical necessity for ongoing care for the patient. The EMR will automatically ask for your approval of medical necessity at the appropriate time.
Purposefully discharging patients or discontinuing care at the threshold levels is not required and incorrect. Ongoing care should be provided as long as medical necessity is demonstrated.
To reflect medical necessity for PT services, we must meet the following criteria:
- The patient’s condition is of a complexity and sophistication that requires a therapist’s skills and cannot be provided by a non-licensed person or caregiver.
- The patient has a condition where PT would be considered appropriate treatment based on medical standards and evidence.
- Your documentation supports medical necessity.
Important takeaway from this section:
- KX modifier is used to indicate medical necessity past the 2150 Medicare threshold.
