Understanding The 8 Minute Rule in Physical Therapy

With most buyer-seller transactions, calculating the cost of a product or service is fairly simple. However, when it comes to Medicare units and payment for physical therapy services, things aren’t always so straightforward. Enter the 8-Minute Rule (a.k.a. the Rule of Eights). Here’s a rundown of the rule—and how it can affect billing and payment for therapy services.

The Basics of the 8-Minute Rule

The 8-Minute Rule governs how rehab therapists determine the number of units they should bill to Medicare for outpatient therapy services on a particular date. This rule also applies to other insurances that follow Medicare billing guidelines. Essentially, a therapist must provide direct, one-on-one therapy for at least eight minutes to receive reimbursement for one unit of a time-based treatment code. While this may sound simple, complexities arise when billing both time-based and service-based codes for a single patient visit.

This 8-minute rule cheat sheet will help your clinicians streamline billing and administrative tasks, saving valuable time.

Time-Based Units vs. Service-Based Units

First, it’s important to understand the difference between time-based and service-based CPT codes. Service-based (or untimed) codes are used for services such as conducting a physical therapy examination, applying hot or cold packs, group therapy, or providing electrical stimulation (unattended). For these services, you can’t bill more than one unit, regardless of the amount of time spent delivering treatment.

Service-based CPT Codes Examples

• Physical therapy evaluation
  • CPT Code 97161
  • CPT Code 97162
  • CPT Code 97163
  • PT Re-evaluation: CPT Code 97164
• Hot or cold packs
  • CPT Code 97010
• Group therapy
  • CPT Code 97150
• Electrical stimulation (unattended)
  • CPT Code 97014 or G0283 for Medicare

Time-based (or direct time) codes, on the other hand, allow you to bill multiple units in 15-minute increments (i.e., one unit = 15 minutes of direct therapy). These codes are used for one-on-one, constant attendance procedures and modalities such as therapeutic exercise and activities, manual therapy, neuromuscular re-education, gait training, ultrasound, iontophoresis, prosthetic training, physical performance test, or attended electrical stimulation.

Time-based CPT Codes Examples

• Therapeutic exercise
  • CPT Code 97110
• Therapeutic activities
  • CPT Code 97530
• Manual therapy
  • CPT Code 97140
• Neuromuscular re-education
  • CPT Code 97112
• Gait training
  • CPT Code 97116
• Ultrasound
  • CPT Code 97035
• Iontophoresis
  • CPT Code 97033
• Electrical stimulation (manual)
  • CPT Code 97032
• Prosthetic training
  • CPT Code 97761
• Physical performance test or measurement
  • CPT Code 97750
• Self-care/home management training
  • CPT Code 97535

Minutes and Billing Units

According to CPT guidelines, each timed code represents 15 minutes of treatment. But therapy sessions don’t always fit neatly into 15-minute blocks. For example, if you provide ultrasound for 11 minutes or manual therapy for 6 minutes, you need the 8-Minute Rule. Per Medicare rules, to bill one unit of a timed CPT code, you must perform the associated modality for at least 8 minutes. Medicare adds up the total minutes of skilled, one-on-one therapy and divides the sum by 15. If eight or more minutes are left over, you can bill for an additional unit. If seven or fewer minutes remain, Medicare will not reimburse you for another unit, and those minutes are essentially lost. For example, if you performed manual therapy for 15 minutes and ultrasound for 8 minutes, you could bill two direct time units.

Mixed Remainders

According to CPT guidelines, each timed code is intended to represent 15 minutes of treatment. However, treatments do not always fit perfectly into these 15-minute segments. In such instances, the 8-minute rule comes into play. Medicaid regulations specify that for a therapist to bill a unit of a time-based CPT code, which typically signifies 15 minutes, they must deliver at least 8 minutes of uninterrupted therapy.

Handling mixed remainders can be challenging. If, after dividing the total treatment time by 15, there are leftover minutes from multiple services (codes), these are referred to as mixed remainders. When the combined total of these remainders reaches 8 minutes or more, an additional unit of the service (code) with the longest duration can be billed.

Substantial Portion Methodology vs Medicare 8 Minute Rule

It’s important to note that not all insurers follow the 8-Minute Rule. Some use the Substantial Portion Methodology (SPM), which doesn’t combine minutes from different services. To bill for a unit of service, you must perform that service for a substantial portion of 15 minutes (i.e., at least 8 minutes). This means if your leftover minutes are from multiple services, you can’t bill for any unless one service totals at least eight minutes.

In some cases, SPM may allow for more units than the 8-Minute Rule. For instance, if you perform 10 minutes of manual therapy and 8 minutes of therapeutic exercise, under the 8-Minute Rule, you can bill 1 unit of manual therapy. Under SPM, you could bill 1 unit of manual therapy and 1 unit of therapeutic exercise. With SPM, the second billed unit under the same code needs to be 15 minutes. Therefore, if you perform 8 minutes of manual therapy, you can bill one unit, but you can’t bill two units until you have provided 23 minutes of treatment (8 minutes + 15 minutes).

To determine which billing methodology a payer uses, it’s best to ask directly. If the insurance company doesn’t have a preference, calculating your units using both methods might benefit your practice.

Navigating the 8-Minute Rule doesn’t have to be overwhelming. By understanding the basics, differentiating between time-based and service-based units, you can ensure accurate billing and maximize reimbursement for your therapy services. Remember, whether you’re dealing with Medicare or another insurer, it’s important to know the specific billing guidelines and methods they require.

8-Minute Rule FAQ

What is the 8-Minute Rule?

To receive payment from Medicare for a time-based CPT code, a therapist must provide direct treatment for at least eight minutes. Providers must add the total minutes of skilled, one-on-one therapy and divide by 15. If eight or more minutes remain, you can bill one more unit. Otherwise, you cannot.

What are time-based CPT codes?

Time-based codes allow for variable billing in 15-minute increments. These differ from service-based codes, which providers can only bill once regardless of the time spent on treatment.

How should a therapist bill for mixed remainders?

For Medicare, if the sum of leftover minutes from multiple services is at least eight minutes, bill for the service with the largest total time, even if it’s less than eight minutes alone.

Does the 8-Minute Rule apply to Medicare Part A services?

No, it only applies to Medicare Part B services.

What insurance companies require the 8-Minute Rule?

Medicare and some other plans require the 8-Minute Rule. Check with individual payers for specific billing requirements.

Which billing method is better—the 8-Minute Rule or SPM?

It depends on the payer. For Medicare, the 8-Minute Rule is required. For other payers, you may want to use the method that maximizes reimbursement for your practice.

Is the 8-minute Rule mandatory?

Using CMS’s interpretation of aggregating timed procedure codes (the 8-minute rule) is mandatory when you submit reimbursement claims for Medicare Part B billing. Some private insurers use the 8-minute rule, the AMA Rule of Eights, or their own proprietary billing rules. Review the rules for each insurance company carefully to avoid billing issues, denials, and delays.
Understanding and applying the 8-Minute Rule can streamline your billing process and ensure accurate payments for your services. By leveraging digital tools and staying informed about payer requirements, you can navigate the complexities of therapy billing with confidence.