Physical Therapy Billing Units: An Essential Overview

On top of their duty to treat patients, physical therapists (PTs) manage complex documentation, billing, and coding tasks critical to ensuring proper reimbursement for services from insurers. Physical therapy billing units are at the core of this process, providing a standardized way to quantify services during therapy sessions. These units are essential for securing accurate compensation for PTs’ expertise and ensuring compliance with payer guidelines.

This guide explores physical therapy billing units in detail, including types, challenges, best practices, and key coding rules to help PTs optimize financial and operational practices.

What Are Physical Therapy Billing Units?

Billing units are standardized measures for quantifying and billing healthcare services. In physical therapy, these units typically represent either a specific time amount, a specific service, or a combination of both. Developed by the American Medical Association in 1966, CPT® codes provide a widely accepted system for billing various healthcare services, including physical therapy. These units ensure consistency across providers and payers, facilitating efficient communication and transactions in medical billing.

• Standardization: CPT® codes ensure uniformity in billing processes, promoting efficient processing of claims across healthcare.
• Billing & Reimbursement: Each CPT® code corresponds to specific therapy services, determining reimbursement rates for private insurers and Medicare.
• Documentation & Compliance: Billing units aid in maintaining thorough records, supporting regulatory compliance and reducing risks of audits or penalties.

Types of Physical Therapy Billing Units

There are two main types of physical therapy billing units: time-based and service-based. Each plays an important role in accurate and appropriate billing practices.

Time-Based Billing Units

Time-based billing units apply to services billed based on the duration of care provided. Each unit typically represents 15 minutes of therapy, with examples including therapeutic exercise (97110) and neuromuscular re-education (97112). Precise time-tracking is essential for these services, and they must align with rules like the 8-Minute Rule.

The 8-Minute Rule determines how many time-based service units PTs can bill for. It applies only to time-based services and operates in 15-minute increments.

Here’s a quick summary:

• One Unit: 8-22 minutes
• Two Units: 23-37 minutes
• Three Units: 38-52 minutes
• Four Units: 53-67 minutes

Service-Based Units

Service-based units apply to treatments billed per session, regardless of time spent, such as evaluations or unattended electrical stimulation (G0283). These codes don’t require exact time-tracking, making them simpler to document but still essential for reimbursement accuracy.

Common Physical Therapy Billing Modifiers

Modifiers clarify treatment specifics or indicate when additional considerations apply to a billed service. They’re crucial for accurate reimbursement and preventing claim denials. Examples of modifiers include:

Modifier 59: Modifier 59 is a billing code used to indicate that a healthcare service or procedure was distinct or separate from other services performed on the same day. This modifier helps ensure that each separate service is properly recognized and reimbursed, even if it typically wouldn’t be billed together with others.

It’s often used in physical therapy, radiology, surgery, and other specialties where multiple procedures might occur in a single visit. When applied, Modifier 59 signals to insurance payers that a particular procedure is different from another similar service provided in the same session or day.

For example, if a physical therapist provides two distinct treatments on the same day, they can use Modifier 59 to differentiate these as separate billable services. This helps avoid claim denials by showing that each service was independently necessary. The use of Modifier 59, however, comes with strict guidelines, as it can be misused if applied too liberally. Medicare and other insurers often scrutinize its use to ensure it accurately represents separate services rather than duplicated billing for similar treatments.

KX Modifier: The KX modifier is used in medical billing to indicate that a service provided exceeded the typical annual therapy limit, but is considered medically necessary. This modifier is commonly applied in physical, occupational, and speech therapy billing to communicate that the patient requires continued treatment beyond the standard coverage limits set by Medicare or other insurance plans.

In practice, once the therapy service exceeds Medicare’s annual cap, the KX modifier can be added to claims to request further reimbursement. By adding this modifier, the provider affirms that the extra services meet Medicare’s criteria for medical necessity. It’s essential that all supporting documentation justifying this need is thorough, as Medicare may review these claims to ensure they meet the established guidelines.

Adding the KX modifier helps ensure that patients continue to receive necessary therapeutic services without interruption, although misuse of this modifier can lead to claim denials or audits.

GP Modifier: The GP modifier in medical billing is used to indicate that the services provided are part of a physical therapy plan of care. This modifier, when added to a claim, tells insurance companies like Medicare that a licensed physical therapist administered or oversaw the services, making them eligible for reimbursement under physical therapy coverage.

In cases where multiple types of therapy are provided within a healthcare facility—such as OT, SLP, or PT—each has its own specific modifier to distinguish the therapy type. The GP modifier applies specifically to physical therapy, while occupational and speech therapy services use the GO and GN modifiers, respectively. Using the correct modifier helps ensure accurate billing and reduces the risk of claim denials, as it clarifies the therapy service type to the payer.

For example, if a patient is receiving both physical and occupational therapy, the GP modifier would be attached to the physical therapy codes, while the GO modifier would be used with occupational therapy codes. Proper application of the GP modifier is critical for compliance with Medicare’s guidelines and for accurate billing practices.

GA Modifier: The GA modifier in medical billing is used to indicate that a “Waiver of Liability Statement” or Advance Beneficiary Notice (ABN) is on file. This modifier is attached to services billed to Medicare when there’s a likelihood that Medicare might not cover them, making the patient responsible for payment if the claim is denied. The ABN ensures that the patient is informed of potential financial responsibility for a specific service if Medicare deems it non-covered.

For example, a physical therapist might provide a service that Medicare generally doesn’t cover, such as some non-medically necessary services. Adding the GA modifier to this claim signals that the patient was made aware, signed an ABN, and agreed to take on the cost if Medicare denies the claim. Using the GA modifier correctly helps healthcare providers stay compliant with Medicare’s requirements and protect themselves from denied payments.

Best Practices in Physical Therapy Billing

• Thorough Documentation: Detail every service provided, including time spent and clinical necessity, to align with time-based billing requirements.
• Accurate Coding: Use correct CPT® codes and modifiers. Continuous training helps teams stay current.
• Payer Compliance: Understand each payer’s specific requirements to minimize errors.
• Technology: Use billing and practice management software to streamline documentation and coding accuracy.
• Patient Communication & Patient Education: Inform and educate patients of potential costs upfront, helping avoid misunderstandings.

While no one becomes a PT, OT, or SLP for the documentation, it is nevertheless an important process to ensure that you’re receiving accurate compensation and compliant with payer guidelines. To learn more about how Medbridge can help, request a demo.

Disclaimer: 

The following information is not meant to serve as a recommendation for how your organization bills on a patient-by-patient basis. You can use this information to help determine what billing policy is right for your organization, but always refer to your organization’s guidelines.