
Are you a physical therapist or physiotherapist who is concerned about overbilling, misbilling, and underbilling? It’s important to ensure that all billing practices are accurate and ethical to avoid legal issues and ensure proper reimbursement for your services.
For a physical therapist managing accurate billing is a complex task not just for the revenue but also for the satisfaction of patients or clients. The physical therapist is motivated to provide quality care to their patients. You might face problems related to billing such as overbilling, misbilling, and underbilling. In this blog, you will understand why is it necessary to avoid mistakes in the billing process.
The Key Billing Mistakes in Physical Therapy:
In physical therapy billing mistakes whether it is intentional or accidental can significantly impact your revenue cycle and its growth. Billing errors are the root cause of financial losses and issues related to audits and penalties. Three common mistakes need to be attended to by physical therapy practices:

- Overbilling: When a physiotherapist bills incorrect services (more or more expensive services) than services provided to the patient. A 2018 report by the Office of the Inspector General (OIG) of the Department of Health and Human Services found that approximately 61% of Medicare claims for physical therapy alone contained regulatory errors.
- Misbilling: When a provider does incorrect coding and fails to identify billable services, or enters the incorrect service codes, might lead to claim denial and revenue loss. A study by the Medical Group Management Association (MGMA) found that medical billing errors are common, with an estimated 30-40% of all medical bills containing errors.
- Underbilling: This occurs when a provider bills lower rate services than services that are provided which can result in lost revenue. A study by the MGMA found that underbilling can be a significant issue for medical practices, leading to substantial revenue loss.
Understanding the Key Billing Rules: The 8-Minute Rule and More
Physical therapy billing is crucial, and understanding the key guidelines such as the 8-minute rule and CPT/ICD codes is necessary. These rules help you do billing correctly and when you fail to comply with these rules it might lead to substantial revenue loss.
The 8-Minute Rule:
What is the 8-minute rule? How does it work?
This is a very crucial guideline in billing Medicare and commercial insurance. When a physical therapist bills for a unit of service they have provided it should be at least eight minutes of direct treatment for a specific therapy service. This means when a physical therapist provides service that is less than 8 minutes, and cannot bill for the unit, the time taken between 8 to 22 minutes is counted as one unit. These rules are difficult to understand but this can help you avoid underbilling for the services you have provided.
For example:
- Therapeutic Exercise (CPT code 97110) may be billed when provided for at least eight minutes.
- If a physiotherapist spends 5 minutes on therapeutic exercises and 3 minutes on neuromuscular re-education (CPT code 97112), these activities can be combined into a single billable unit, provided the total time adds up to at least 8 minutes.

Billing for Co-Treatment and One-on-One Services.
Co-treatment is when two or more therapists are involved in the provident therapy services to the client or patient. An important aspect of physical therapy billing is understanding when and how to bill for co-treatment. This is a very complicated process but you can bill for the services you have provided by adding the accurate documents. It’s important to note that, depending on payer guidelines, co-treatment may or may not be reimbursed at the same rate as individual services.
One-on-one services in billing are very crucial. In co-treatment, the therapist is expected to bill based on how much time the therapist has spent on the treatment even though the patient is treated simultaneously by one therapist.
The Role of ICD and CPT Codes in Physical Therapy Billing:
ICD and CPT codes in physical therapy or physiotherapy play very important roles in identifying the compliance and accuracy of billing with the regulation. These codes are used to specify the treatment procedure used and other necessary details of patient care. While taking into account that the codes are used accurately and efficiently by minimizing the risks of denials and misbilling.
For example, when the ICD codes are used correctly which completely aligns with the services provided to the patient it prevents denials and misbilling issues. CPT codes also ensure that the service is billable, following the insurer’s guidelines.
What are the benefits of ICD and CPT codes:

- Improved Accuracy and Efficiency:
- Reduced Risk of Claim Denials:
- Increased Revenue and Profitability:
- Enhanced Compliance with Regulations:
- Better Communication and Collaboration:
- Improved Data Collection and Analysis:
- Enhanced Patient Care:
- Support for Research and Quality Improvement:
Common Billing Codes and Units in Physical Therapy
Service Code | Description | Minimum Time for Billing | CPT Code |
Therapeutic Exercise | Exercise to improve strength and flexibility | 8 minutes | 97110 |
Neuromuscular Reeducation | Activities to improve movement coordination | 8 minutes | 97112 |
Manual Therapy | Hands-on treatment for pain and movement | 8 minutes | 97140 |
Aquatic Therapy | Therapy performed in water | 8 minutes | 97113 |
Group Therapy | Therapy for 2-4 patients simultaneously | Varies | 97150 |
(Note: The above table outlines common services and codes used in billing physical therapy. Ensure you follow payer-specific guidelines regarding billing for co-treatment or group therapy.)
The Importance of Documentation in Preventing Billing Mistakes
It is very necessary to do the documentation correctly because it is a core of accurate billing in physical therapy services. The time spent providing treatment or service should align with the billing units. This is only possible when the documentation is provided accurately.
Here is the list of the necessary documents needed to prevent billing mistakes:
- Patient Intake Form
- Treatment Plan
- Progress Notes
- Daily Treatment Logs
- Procedure Documentation
- Re-evaluation Notes
- Supervision Notes
- Discharge Summary
- Insurance Authorization/Verification Forms
- Patient Consent Forms
Outsourced Physical Therapy Billing: A Solution to Common Challenges
Outsourcing Cloud RCM billing services can help you so much by reducing administrative burdens on physiotherapists. This not only helps them reduce their burdens but also proves to be a good choice for a better revenue cycle. You can outsource Cloud RCM billing services and focus on patient care, which is the main concern of every healthcare sector.
Our experts make sure they provide with you the best service, and their compliance with regulatory policies reduces the risk of misbilling and underbilling. Our team of experts helps you with billing by reducing the chances of errors, helping with a claim denial, and ensuring that all billing unit’s physical therapy is accurately captured.
Final thought:
Doing accurate physical therapy billing is critical. Adherence to the codes used for physical therapy, understanding the guidelines (8-minute rule), and most importantly outsourcing Cloud RCM for physical therapy billing solutions can help you by minimizing the risks of overbilling, misbilling, and underbilling. You can make your practice financially sound by outsourcing billing from Cloud RCM.
FAQs
What are the most common billing errors in physical therapy?
Incorrect coding, failure to identify all billable services, and entering the wrong service codes are common errors.
Why is accurate billing and coding crucial for physical therapy practices?
Accurate billing ensures proper reimbursement for services rendered and maintains the practice’s financial health.
How can physical therapy practices prevent billing errors?
Regular staff training, implementing robust billing and coding procedures, and staying updated on coding guidelines are key preventive measures.
What are the consequences of underbilling for physical therapy practices?
Underbilling can lead to significant revenue loss and reduced profitability.
Can overbilling lead to legal consequences?
Overbilling can result in fines, imprisonment, and exclusion from government programs.
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