Billing Units: Physical Therapy Treatment

The codes and billing units—physical therapy billing specifically—vary depending on the setting in which care was provided, the length of time, and the services rendered. 

Since many clients need to use their insurance benefits to pay for physical therapy, physical therapists should have a general understanding of physical therapy billing units, physical therapy billing codes, and reimbursement rates. 

In this article, we will go over how you can accurately bill insurance payers according to the type of treatment and corresponding billing code you use.

What are billing units (physical therapy)?

Physical therapists practice in private practices, outpatient practices, skilled nursing facilities (SNF), rehabilitation facilities, home healthcare practices, pediatric practices, sports medicine and sports performance settings (field-side and in the training room for sports medicine), and more. 

In all clinical settings, it’s important that physical therapists fully understand the billing system and the need for providing excellence in care, in parallel with advocating for just compensation for care provided. 

Physical therapy reimbursement has continued to decline over the last seven years. In this current landscape, physical therapists must be experts in billing to avoid errors that directly impact payment. 

Regardless of the clinical setting, physical therapists assign and calculate billable units based on the duration and type of care provided. 

In order to maintain a universal system for both billing and reimbursement, specific treatment codes and specific values per code have been created, called Current Procedural Treatment (CPT)® codes. The majority of physical therapists and insurance companies have adopted this system to allow for a standardized process. 

Physical therapy billing units pertain to the length of time of a treatment session for a specific date of service, per specific CPT codes. 

In this system, each unit represents the specific amount of time the physical therapist has spent providing care for the patient. 

The rationale for using physical therapy billing units and physical therapy codes include:

• To ensure patients get the adequate care they need
• To ensure the provider receives fair compensation for their services
• To avoid overcharging 
• To ensure quality and continuity of care 

Time-based billing units, physical therapy

There are two types of CPT codes billed in physical therapy: time-based codes and service-based codes. 

Time-based codes are billed when the physical therapist has direct, one-on-one constant contact with a patient. For every 15 minutes spent with a patient, a physical therapist can bill a single billing unit, physical therapy. 

For example, if a patient is seen for an hour with 30 minutes spent on gait training, 15 minutes of manual therapy treatment, and 15 minutes of therapeutic exercise, the physical therapist can bill four billing units, physical therapy. 

The following is a list of time-based CPT codes, which can be billed as billing units, physical therapy:

• Manual electrical stimulation (97032)
• Ultrasound (97035)
• Therapeutic services/exercise (97110)
• Gait training (97116)
• Manual therapy (97140)
• Neuromuscular reeducation (97112)
• Neurological reeducation (97113)
• Therapeutic activities (97530)
• Iontophoresis (97033)
• Prosthetic training (97761)
• Self care/Home management (97750)
  

Note: Time-based treatment will include preparation time for things required for care. It also allows providers to include time managing, assessing, and educating the patient about their condition as part of the definition of each code. Per the American Physical Therapy Association (APTA), the key to justifying your decision to bill for assessment and management time lies in the documentation. Documentation must be thorough,  accurately describe the treatment, and defend/support your clinical reasoning. 

Service-based physical therapy billing codes

As stated above, in addition to time-based CPT codes, there are service-based CPT codes. Service-based CPT codes cover procedures and services in which the provider does not have sustained, one-on-one constant contact with the patient. With service-based codes, the rule is to always bill one unit, regardless of how long the procedure takes. There is no associated time requirement for these codes. 

The following is a list of service-based CPT codes:

• PT evaluation (97161)
• PT reevaluation (97164)
• Electrical stimulation (unattended) (97014/G0283)
• Hot/cold packs (97010)

In addition to time-based and service-based codes, the Consolidated Appropriations Act of 2023 allows payment for real-time, face-to-face telehealth care by physical therapists (and physical therapy assistants). Due to the ever-changing post-COVID landscape, these guidelines will be subject to change and are currently slated to stay in effect through December 31, 2024. 

The following list identifies physical therapy CPT codes that are eligible to be used for reimbursement for telehealth physical therapy (PT) services:

• PT evaluation (97161)
• PT reevaluation (97164)
• Therapy procedures using exercise/therapeutic exercise (97110)
• Neuromuscular reeducation (97112)
• Therapeutic procedures (97116)
• Therapeutic activities (97530)

Average reimbursement rates

Regardless of billing units, physical therapy charged (per CPT code), reimbursement rates vary with every medical insurance company. Physical therapy reimbursement rates have decreased by more than 10% since 2016. On average, reimbursement rates per unit, for each CPT code (service-based and time-based), are as follows:

Service-based (1 unit per code):

• Physical Therapy Evaluation (97161): $87.70 
• Physical Therapy Reevaluation (97164): $60.27

Time-based (cost per unit):

• Therapeutic activities (97530): $40.42/ unit 
• Neuromuscular reeducation (97112): $36.09/ unit 
• Neurological reeducation (97113): $35.34/ unit 
• Therapeutic exercise (97110): $31.40/ unit 
• Gait training (97116): $31.04/ unit
• Manual therapy (97140): $28.87/ unit 
• Manual electrical stimulation (97032): $15.16/ unit 
• Ultrasound (97305): $14.08/ unit

Note: These reimbursement rates continue to change, and in fact, some insurance companies have very specific reimbursement requirements and guidelines.
Examples of these stipulations include:

• Capped total reimbursement (regardless of time) per visit 
• Capped number of units paid per visit
• Capped number of total visits paid for per year, per diagnosis
• Steep requirements for approval for additional visits after initial visits are completed
• Decreased reimbursement for physical therapy assistant visits

The 8-minute rule 

There is one exception to the billing guidelines set forth in this article: Medicare’s 8-minute rule. The 8-minute rule is the backbone of Medicare billing, determining how many billable units of treatment can be charged for time-based services during an individual date of service. 

As physical therapists, it is important to become experts at the 8-minute rule, as it is integral in treatment, billing, and reimbursement for Medicare patients. Overall reimbursement (and reimbursement rates) are specific to Medicare guidelines and units billed. 

Today, more than ever before, physical therapists must fully educate themselves about billing codes and reimbursement for all physical therapy services performed. 

Understanding the difference between a time-based code and service-based code is essential when billing insurance companies. 

Negotiating fair contracts (and specific reimbursement rates for each CPT code) with insurance companies is paramount to ensure physical therapists are justly paid for the services they perform. Based on practice setting and patient base, physical therapists will benefit from identifying any billing nuances specific to that treatment population/setting. Physical therapists must also fully educate themselves on Medicare/ Medicaid/ Tricare billing and reimbursement. 

Finally, physical therapists must keep quality of care at the forefront, whilst ensuring they are properly reimbursed for the services they provide.

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READ NEXT: Understanding the Physical Therapy 8-Minute Rule