Luna Billing Guide

Billing and coding for physical therapy services can be complex and is often misunderstood. This guide is designed to provide clear, compliant guidance to make documentation and coding easier to navigate.

By equipping Luna therapists with up-to-date best practices, we aim to improve billing accuracy and highlight the value of the skilled, medically necessary care you deliver.

If you have questions, feel free to message "Clinical → Therapist Enablement" in your app — we're here to help.

Sections

1. Evaluation Codes

2. Treatment Codes

3. Medicare 8 Minute Rule vs SPM Method

4. KX Modifier for Medicare

5. Remote Therapeutic Monitoring

1. Evaluation Codes

Untimed vs Timed Codes for Initial Visits

During an evaluation (Initial Visit), you will likely have to use two types of CPT codes to fully reflect the service provided.

The first code will be an untimed "evaluation" code. 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 CPT code you will likely use is called a timed treatment code. Remember 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 by 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 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 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 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:

  • 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 treatment interventions are timed procedures reflecting a timed code. 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. It is important to always code to the highest level of specificity.

All skilled interventions must include level of assistance or cueing 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 a cat/cow is to improve spinal mobility, 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 scapular stabilization, you may bill Neuromuscular Re-education (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:

  • The purpose of what you are doing should match the definition of the CPT code.
  • CPT code diversity helps to better demonstrate medical necessity, highlights the clinical expertise involved in your care, and ensures we are getting credit for the valuable 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 with a Medicare patient, we would see 53 minutes of service time resulting in 4 units of billable time.

SPM: 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 tells us that a CPT code can be billed if 8 or more minutes of treatment was performed. This sounds similar to the 8 minute rule, but the big difference is that this method does not account for total treatment time - so you do not have to limit billing to 3 units 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:

  • Medicare 8 Minute Rule applies to all Medicare (Regular Medicare and Medicare Advantage) and Federal payers such as Tricare. This rule DOES take into account total treatment time when determining how many units can be billed.
  • SPM method applies to commercial payers (e.g. Blue Shield, Aetna, Cigna, etc...). This rule DOES NOT take into account total treatment time when determining how many units can be billed.

4. KX Modifier for Medicare

Medicare no longer has a cap, and instead has predefined thresholds for ensuring medical necessity and skilled care.

Outpatient therapy services delivered beyond $2,410 require a KX modifier to indicate 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, by clearly highlighting the patient’s objective deficits and their impact on ADLs, as well as that treatment continues to require the skills of a physical therapist.

Advanced Beneficiary Notice (ABN):

The Advanced Beneficiary Notice is a form provided to Medicare beneficiaries to inform them when Medicare is unlikely to cover a specific service. If a patient with Medicare no longer meets the criteria for medically necessary, skilled physical therapy, but wishes to continue care, then this is when we should utilize an ABN.

The ABN ensures patients understand their options and potential financial responsibility for services Medicare is likely to deny. Common reasons for denial include a lack of medical necessity or the service being explicitly non-covered (e.g., dry needling, cupping, or experimental therapy). Patients can use the ABN form to:

  • Opt to receive the service and request an attempt to bill Medicare (understanding a denial is likely).
  • Pay out-of-pocket without billing Medicare.
  • Decline the service entirely.

A signed ABN provides documented proof that the patient acknowledged and accepted financial responsibility before receiving the service.

Below are two patient examples where using an ABN would be appropriate:

Example 1: Chronic Pain Management Beyond Medical Necessity

A patient with chronic low back pain has been receiving physical therapy for several months. Initially, the patient had significant functional limitations, including difficulty standing for prolonged periods and performing daily activities. Through therapy, their strength, mobility, and endurance have improved, and they are now independent with ADLs. However, they wish to continue PT for ongoing pain management and general conditioning. Since the patient no longer demonstrates functional deficits requiring skilled intervention, Medicare is likely to deny further treatment as not medically necessary. In this case, an ABN should be provided before continuing treatment, informing the patient of potential out-of-pocket costs.

Example 2: Maintenance Therapy for General Wellness

A patient with Parkinson’s disease has been attending physical therapy to improve their balance and reduce fall risk. Over time, they have reached a stable level of function with no significant decline or new impairments. The patient wants to continue sessions for ongoing maintenance and general wellness to keep up their current level of mobility. Medicare typically does not cover maintenance therapy unless there is documented medical necessity and the skills of a PT are required. In this case, an ABN should be provided before continuing treatment, informing the patient of potential out-of-pocket costs.

Important takeaways from this section:

  • KX modifier is used to indicate medical necessity past the $2,410 Medicare therapy threshold. The KX modifier should be applied to confirm that the services are medically reasonable and necessary, as supported by appropriate documentation in the medical record.
  • If an Advanced Beneficiary Notice (ABN) is used, the KX modifier should not be added to the claim, since the ABN indicates that the care may no longer be considered skilled or medically necessary.

5. Remote Therapeutic Monitoring (RTM)

As part of the comprehensive care provided by Luna Physical Therapy, patients receiving in-person physical therapy in their homes may also be enrolled in Remote Therapeutic Monitoring (RTM) services. This program, alongside regular in-person visits, is designed to enhance patient recovery by supporting timely engagement, adherence to care, and progress monitoring.

Through the RTM program, Luna may send periodic messages to gather and assess data related to a patient’s participation in and adherence to their prescribed physical therapy plan. This may include receiving and responding to questions or prompts via SMS/text messages, mobile application prompts, or other digital communication methods. Additionally, we may monitor patients adherence to their care plan and collect and analyze other digital engagement metrics available from their use of our Service to monitor and enhance patient care. These messages are an integral part of our effort to provide patients with consistent support and ensure optimal outcomes.

Therapists will be made aware when a patient has been enrolled in RTM services. We ask that you regularly assign and update your patient’s Exercises via the Luna app, and encourage your patients to respond to RTM-related communications promptly to maximize the effectiveness of this program.

Patients may opt out of receiving RTM services at any time.

What RTM codes are billed at Luna and what are their requirements?

1. 98975: Remote therapeutic monitoring (e.g., respiratory system status, musculoskeletal system status, therapy adherence, therapy response); initial set-up and patient education on use of equipment.

  • Report this code only once per episode of care and only if the patient has activated their use of the device and monitoring occurs over a period of at least 16 days.

2. 98977: Remote therapeutic monitoring device(s) supply with scheduled (e.g., daily) recording(s) and/or programmed alert(s) transmission to monitor musculoskeletal system, each 30 days.

  • Report this code only if 16 days of collection occurred within a 30-day period.

If you have questions about this service, please contact Luna’s Clinical team.

Billing with Confidence at Luna

Understanding and applying proper billing practices is essential to ensuring compliance, maximizing reimbursement, and demonstrating the value of skilled physical therapy services. This guide serves as a comprehensive resource to help you navigate coding, documentation, and payer-specific billing requirements with confidence. By following these best practices, you can support accurate claim submissions, minimize denials, and uphold the highest standards of patient care.

If you have any questions or need further clarification, please message the “Clinical → Therapist Enablement” team via your app. Thank you for your commitment to providing high-quality care and accurate billing practices at Luna.