Physical Therapy Billing Units Explained: A Simple Guide for Therapists
In 2025, the physical therapy billing is tricky due to its complex process. Where physical therapists save the lives of individuals, the physical therapy billing units help them improve financial growth. However, billing for physical therapy is a complete process that involves documentation, patient eligibility checks, and accurate codes, helping in timely reimbursements from the insurance company. That’s why every therapist or billing company knows well about billing units and the 8-minute rule in billing, as they are essential for a smooth and convenient billing process.
Today’s guide will give you details about everything you should know. It involves why billing units matter, what the 8-minute rule is, the use of CPT codes, and best practices that help optimize your financial workflow while reducing denials.
What are Physical Therapy Billing Units & Why Do They Matter
Billing units for physical therapy refer to the standard codes used to bill for services rendered by therapists or healthcare professionals. These codes represent the time-based services for each therapy session, and its type. However, many individuals and solo practitioners think that billing units are just a number on claim forms, but the fact is that these numbers decide how much the provider gets reimbursed. Hence, a minor mistake in billing codes can lead to delays, rejections, or even denials.
Let’s simplify the complex billing units method for PT, so you can understand how billing units perform a significant role in the billing process.
Suppose a physical therapist performs a therapy session. This session is calculated by how long the healthcare professional provides therapy and which category they offer. Remember that 15 minutes of treatment represents 1 billing unit. So, if a healthcare professional served 30 minutes of a therapeutic exercise (97110) (i.e., 2 units) along with manual therapy (97140) of 15 minutes (1 unit), the sum of them equals 45 minutes. Hence, the total billing units are equal to 3.
In short, physical therapy billing units matter most, as they define how much the provider is reimbursed from insurance companies.
What is the 8-Minute Rule in PT Billing?
Do you know how the 8-minute rule in PT billing can save you from a considerable loss of your revenue cycle? The Centers for Medicaid and Medicare Services (CMS) established this 8-minute rule to ensure professionals get paid reasonably and timely for their physical therapy billing services.
The 8-minute rule means the provider or therapist must spend at least 8 minutes performing time-based services, making it count as one billable unit. If the time is less than 8 minutes, the service will not be billed as a separate unit. Let’s see how the billable unit is calculated.
- One billing unit measures when the 8 – 22 minutes.
- Two billing units measure for 23 – 37 minutes.
- Three billing units measure for 38 – 52 minutes.
- Four billing units measure for 53 – 67 minutes.
Hence, understanding this measurement of billing units is essential as it helps you receive accurate payment and avoid any payment rejections or denials.
What Are the Common CPT Codes Used in Physical Therapy Billing?
In the billing process, CPT codes are the Current Procedure Terminology codes, established and published by the AMA. Moreover, these codes are revised frequently, so every billing company and provider offering RCM services stays updated with CPT codes to ensure accurate and timely payments.
CPT codes have two main categories in physical therapy billing services: time-based codes and service-based codes. Let’s simplify both.
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Time-Based Billing Units for Physical Therapy
Time-based billing units for physical therapy mean the provider bills accurately based on each session’s time. As mentioned above, it follows the 8-minute rules as well, which help providers get paid accurately. Here are some standard time-billing CPT codes based on therapy or treatment;
- Code 97110 – Use for therapeutic exercises such as developing strength, motion, and flexibility.
- Code 97112 – For neuromuscular re-education, such as movement, balance, coordination, and posture.
- Code 97140 – Manual therapy techniques include joint mobilization, manipulation, and lymphatic drainage.
- Code 97530 – This code indicates the therapeutic activities, whether dynamic or functional, that are offered to improve performance. For example, sit-to-stands, lifting, carrying, transfers, or sport-specific training.
- Code 97535 – Use for the self/care or mgmt training to improve ADLs (activities of daily living) or compensatory strategies.
- Code 97035 – This code applies to show the ultrasound activities for therapeutic purposes to treat patient injuries through sound waves, which helps in deep tissue healing.
Service-Based Billing Units for Physical Therapy
Compared to the time-based billing for PT, the service-based billing units are easier to bill because they don’t require exact time tracking. Hence, these codes depend only on the service provided for each therapy session used for the evaluation and the modalities. Here are some service-based billing units for PT;
- Code 97161-97163 – Indicates the physical therapy evaluation, which involves the low, moderate, and high complexity evaluation.
- Code 97164 – This code is used when the healthcare professional delivers the PT re-evaluation to a patient who has taken the primary evaluation.
- Code G0283 – This one is used for electrical stimulation (unattended), which means it doesn’t require direct contact of the therapist with the patient.
- Code 97150 – Indicates group therapeutic activities, such as when two or more patients receive sessions simultaneously.
Common Billing Errors in Physical Therapy Billing and How to Avoid Them
Proper documentation, eligibility checks, insurance guidelines, and accurate use of billing units for physical therapy are key components, as they help in on-time payments and reimbursement. However, a minor error in claim submission can lead to a rejection or even denials. Let’s learn about common billing errors and how to avoid them to improve your financial workflow.
01. Lack of Specialty-Specific Knowledge
The billing company or provider must have a vast and deep knowledge of the PT billing process, whether outpatient or inpatient, as it helps in on-time payments. However, the central part you must know when submitting a claim is about physical therapy billing units, which play a vital role in claim approval or rejection. Further, to avoid billing errors or denials, stay updated with changes in payer policies, codes, and modifiers used in PT billing.
02. Incorrect Use of Billing Codes
Many claims are rejected due to outdated physical therapy billing codes, as the AMA, Medicaid, and Medicare often change the codes. Hence, to avoid errors that lead to claim rejection or denial, stay updated with the current codes for PT billing. Moreover, ensure to use the accurate codes based on time-based and service-based, as well as never forget about the 8-minute rule of PT billing. It helps to ensure a smooth and timely reimbursement.
03. Missing Prior Authorization
Many insurance companies cover the full coverage of PT services, while others cover partial coverage. Hence, to avoid any discrepancies in the billing process, make sure to check the patient’s insurance coverage plan before providing services.
How to Optimize Physical Therapy Billing Units for Higher Reimbursements?
Physical therapy billing units are essential as these are the backbone of the overall improvement of the revenue cycle. Moreover, accurate use of PT billing units helps maximize cash and improve financial workflow. Here are some tips that help you optimize PT billing units;
01. Remember the 8-Minute PT rule
Whenever you submit claims for physical billing services, master the rule of 8 minutes. For example, if a therapist provides 15 minutes of manual therapy and 30 minutes of therapeutic exercise, the billing units are equal to 3. Hence, make sure to provide 8 minutes of treatment to get paid for each session you provide, as if sessions under 8 minutes do not count as a billable unit.
02. Differentiate between CPT Codes
When submitting claims, make sure to use the accurate CPT codes, as they fall into two categories for PT billing: time-based and service-based CPT codes. The time-based CPT codes involve time tracking for each therapy session, while the service-based codes depend on the evaluation. Hence, make sure to utilize the correct codes to maximize reimbursements.
03. Track & Audit Claims Regularly
When submitting the claims, track and audit them to check if the claim has been processed. Moreover, if the denials occur, identify the root cause and resubmit them for timely payments.
04. Stay Updated with Insurance Policies
Staying updated with the insurance policies is essential for physical therapy billing services, as a minor error in claim submission can lead to rejections or denials. Hence, it helps you keep updated with Medicare PT codes and policies, which helps in passing a clean claim submission rate, boosting cash flow.
05. Implement Practice Management Software
Implementing advanced practice management software tools detects billing errors, suggests the correct codes and modifiers, and reduces administrative workload. Hence, it helps minimize physical billing errors and maximize reimbursements.
Conclusion
To know about the PT billing units is essential for maximum reimbursements and reducing denials. Mastering the 8-minute rule of PT billing, the correct use of time-based and service-based codes, and staying updated with insurance policies help maintain healthy cash flow. Moreover, you can reduce rejections and denials by implementing the best practices, such as using advanced practice management software, tracking and auditing claims regularly, and staying compliant with HIPAA policies. However, outsourcing PT billing services to eClaim Solution can help you reduce administrative burdens while maximizing cash flow and reducing denials up to 50%.
Frequently Asked Questions
Physical therapy billing units represent the amount of time a therapist spends providing specific treatment services. Each unit typically equals 15 minutes of therapy, based on CPT codes and the 8-minute rule used in physical therapy medical billing.
The 8-minute rule is a guideline set by CMS that determines how time-based services are billed. A therapist must provide at least 8 minutes of a time-based service to count as one billable unit. This rule ensures accurate submission of insurance claims for therapy and fair reimbursements.
To calculate therapy billing units, total the minutes of time-based services provided during a session. Then, apply the 8-minute rule to determine how many billable units you can submit on the claim. Proper documentation for therapy billing is crucial for accuracy.
Some common CPT codes for physical therapy include:
- 97110 – Therapeutic exercises
- 97112 – Neuromuscular re-education
- 97140 – Manual therapy
- 97530 – Therapeutic activities
Hence, using the correct physical therapy billing codes ensures compliance and minimizes denials.
Time-based codes depend on the actual minutes spent providing therapy (e.g., therapeutic exercises), while service-based codes are billed once per session, regardless of time (e.g., evaluations). Understanding both helps improve compliance in therapy billing.
Accurate billing units in physical therapy ensure providers receive full reimbursement for the services rendered. Errors in unit calculation or code selection can delay payments, cause denials, and impact the overall revenue cycle management.
Disclaimer: This article is for informational purposes only and should not replace official CMS or payer-specific billing policies.
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