Medical Billing

# Billing Units Physical Therapy: A Complete Guide to Medicare Rule of 8

- May 23, 2022
- Posted by Kristen Edwards

23 May

For the physical therapy profession, it is essential to comprehend the complex process of rehabilitation billing procedures and practices regulated by the Centers of Medicaid and Medicare Services (CMS). And for the same purpose, billing units physical therapy used in the procedures has crucial importance.

Presently, there are over 44million individuals registered in Medicaid. And with the current situation of population after the pandemic, the baby boom generation will levitate this number up to a projected total of 79 million by 2030. These numbers will be at the double rate of enrollments Medicaid has seen in 2000. This rise in registered individuals will create a challenging situation for the federally monitored CMS to proceed with the system and cover the medical billing and physical therapy billing practices for healthcare professionals.

Projecting the hike in 1999 December, the Health Care Financing Administration (HCFA) made the decision to bill the out-patient Medicare beneficiaries from April 1, 2000. The 8-minute rule must be followed following the Transmittal 747. This rule is applied to the services of all therapy providers’ services, including hospital and direct therapist-patient contacts. Also, billing units physical therapy was also modified with the number of times a service(s) is performed. Hence, the updated Transmittal 747 began receiving recognition as a Medicare rule of 8.

## What is Medicaid’s 8-minute rule and how does it work?

The 8-minute rule from Medicaid is the procedure designed for submitting physical therapy billing services to Medicare. The Medicare rule of 8 is applied to direct contact with therapeutic services. A PT provides the patient an 8-minute one-on-one service in these therapeutic services. For this, the CPT codes are further broken down into physical therapy units on the basis of time intervals to determine how long a therapeutic service has been performed.

Any confusion in understanding the 8-minute rule will create a series of errors in billing that will eventually delay the reimbursement process, promote underbilling, or force an audit.

source:otdude.com

This is because more than one service is performed in a single therapeutic visit and every service has different codes. For this reason, a well-managed and well-understood policy from the 8-minute rule must be applied.

Medicare services providers need to bill Medicare patients with respect to CMS rules. However, if a patient has other health insurance policies, Medicare rules may not be applied to the services, unless they are specified.

## The 8-minute rule and Medicare

The 8-minute rule covers therapeutic direct contact services which are based on the one-on-one PT and patient contact. Therefore, the physical therapist is obligated to provide services for at least 8-minute to receive reimbursements from Medicare according to the time-based CPT codes. CPT codes are designed according to time intervals, so coders must use the appropriate unit-based codes defined in every code description.

Here, the ‘unit’ in the medical billing is the determination of the number of times a service is performed.

## Essential 8-minute rule chart to follow by coders

If you are a coder, how would you know how many units you should be adding to the bill? According to Medicare, the codes are defined depending on the intervals of direct therapeutic services. Here’s a handy 8-minute rule chart that will help in understanding the accurate billable units based on the time a therapist provided the service.

8-Minute Rule Quick Reference
1 unit | 8-22 minutes
2 units | 23 to 37 minutes
3 units | 38 to 52 minutes
4 units | 53 to 67 minutes
5 units | 68 to 82 minutes
6 units | 83 to 97 minutes
7 units | 98 to 112 minutes
8 units | 113 to 127 minutes

## Insurances that apply the 8-minute rule in billing

Every federal payer must follow the 8-minute rule. In some scenarios, insurance companies accept the billing through Substantial Portion Methodology (SPM). But the standard billing for the physical therapy is the 8-minute rule for services provided based on specific intervals.

The sources that need an 8-minute rule for the billing of services like physical therapy include;

- Medicaid
- Medicare
- Medicare Advantage program
- Pyramid Life
- Medicare plus blue
- Aetna Advantage plans
- Humana (advantage program)

Other federal payers

- Tricare (Armed Services)
- Campus (veterans)
- OWCP: Office of worker’s compensation programs, administered by ACS
- Blue cross for federal employees

## CPT – Current procedural terminology codes

For services rendered by the third party therapist, some specific Current Procedural Terminology coded (CPT-4) codes should enter while submitting the therapeutic bills including the third party like Medicare. These specific codes for physical therapy are designed by the and regulated by the American Medical Association (AMA).

If you are a therapist and want to use the codes, you must observe that there are codes that determine the services and treatment you offer to your patients come under 97000 series. This section is named ‘Physical Medicine and Rehabilitation’.

While billing, do not stick to this section though, there are other sections where you can find the codes for other services and treatments of a therapist that they provide in one-to-one sessions. However, a therapeutic service provider can use a number of codes other than the 97000 series as long as he is able to render them according to the legal therapy state license laws. It is important to receive the whole understanding of the codes inside and outside the 97000 series.

In addition, it is also important to have an understanding of the dissimilarities between the payment policies and the coding. This is because it is unnecessary that the payer will reimburse for the code presented in the series and you have used it in your billing.

There are codes other than timed CPT codes which are unknown as untimed codes which are based on services.

### Untimed and Timed codes

Untimed codes also called service-based codes are used according to per service. Here, no matter how much time you have spent on the service the reimbursement will not change.

Additionally, these untimed codes represent the services that are not given as one on one direct contact. Here are some of the untimed codes that should be used when billing for untimed codes;

- Hot/cold packs (97010)
- Physical therapy evaluation (97161, 97162, 97163), or re-evaluation (97164).
- Electrical Stimulation (unattended) (97014)
- G0283 Electrical Stimulation, Medicare Non-wounded (unattended)

source:healthmatch.com

### Timed Based CPT codes

As the name suggests, time-based therapy codes are based on the time a therapist spends on a patient. Concerning the above table. If a therapist spends 8 to 15 minutes with a patient, one unit will be billed for the time.

According to Medicare, the number of billable units documented in a day by the licensed therapist will be paid after dividing them by 15. If the reminder left is more than the number 8 but less than 15 then the therapist will be paid as one additional unit.

Here is a list of commonly used CPT codes;

- Therapeutic activities (97530)
- Therapeutic exercises (97110)
- Manual therapy (97140)
- Gait training (97116)
- Neuromuscular re-education (97112)
- Iontophoresis (97033)
- Ultrasound (97035)
- Electrical stimulation (manual) (97032)

For CPT coding, the number of units used for the treatment or therapy must not exceed the number of time spent in that day’s procedures. If the time spent in the session exceeds the billed time, the therapist is allowed to bill more than one unit for the day.

### Avoid common mistakes

- Service-based time units should be separately billed. They cannot be mixed with the timed codes and billed together.
- The eight-minute rule is not for all types of scenarios and not for all types of payers. Some private insurance companies may have adopted the eight-minute rule but not all the private insurance companies follow it. Also, for the companies that do not follow the eight-minute rule or do not accept Medicare, you should bill them according to their guidelines. This is why having prior knowledge of billing is important.
- Private insurance companies often are not inclined to accept remainders. Therefore, no matter if you have service provided for more than 8 minutes, they may call it one unit.
- By calculating the time spent on the treatment based on the service-based codes, you might qualify for the remainders to be counted as one unit. If the codes were assigned before billing, the billable unit may be lost and cannot be used after the given time period.
- Many times, greeting patients, catering to them with counseling, management of therapy sessions, and assessments are neglected while billing. Make sure you add the time spent in;
- Assessing the patients on their first visit
- Assessing them before performing the hands-on treatment
- Assessing and recording their responses to the interventions
- Counseling, instructing, advising, and exercising, in home-care settings
- Answering their queries
- Documenting their issues while their presence

## What is the stance of the CMS manual on the 8-minute rule?

CMS has described the 8-minute rule according to its every effective aspect. It described that the therapist can detail more than one unit in the billed document if they provide services that take less than 8 minutes. However, some exceptions cover the treatments that generally take less than 8 minutes to complete. A therapist can bill two units for a single session during these events. This is because if a session takes less than 8 minutes (where one unit should be counted when the treatment lasts for 8-15 minutes), a therapist can cater to more than one patient in 15 minutes. Considering this scenario in mind, the exceptions are made for the treatments to be billed as two units for a single session.

source:betterpracticesolutionllc.com

### When to use the 8-minute rule?

The eight-minute rule should only be followed for physical therapy treatments, not other medical circumstances. For instance, on the first session of the therapy, the session may take more than 25 minutes, as the staff may examine the whole body and the affected areas so the next therapies could be planned.

Therefore, the first session would not be considered as an 8-minute rule, instead, it will be billed as a service-based session. It is important to know the technical issues of billing to avoid legal remedies in the future. Also, coders need to be familiarized with the language used in the bill documentation to prevent revenue losses due to misinterpretation.

On the contrary, if the session, either first or not, comes under timed CPT codes, then it is important to document them according to the serving time and units adhering to the rules and guidelines. If the eight-minute rule was not followed for any reason, your practice might not be reimbursed either from private insurance or Medicare. Furthermore, to avoid any legal binding, the records should be submitted timely within the date of service.

### Endnote

For someone with the physical therapy practice, it is extremely crucial to understand the difference between timed and untimed codes so they can be billed according to the CMS 8-minute rule. Hopefully, the blog cleared most of your conundrums regarding CPT codes, and when and how they are used.

To conclude, the eight-minute rule is an efficient tool for physicians to assess the required time for physical therapeutic treatments. While sometimes, it can be tricky and complex when it comes to calculating codes for timed and untimed treatments. Also, billing them timely is another obligation that therapists must look into. However, timely billing can make the practice more valuable through the eight-minute rule. Plus, it will be more beneficial for third parties to link with the federal system, automatically minimizing the risk of scams and fraud.

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