Proper Billing Practices For Physical Therapy: Navigating Insurance Claims

Billing for physical therapy services is a complex process that requires knowledge of medical billing software, relevant codes, and insurance company regulations. Proper billing practices are essential for keeping a physical therapy clinic financially afloat, covering costs such as staff salaries, equipment purchases, and utility bills.

The billing process typically involves verifying insurance benefits, documenting and selecting the appropriate codes, submitting claims to insurance companies, posting and reconciling payments, and preparing for potential claims audits. It is crucial to understand the difference between being an in-network or out-of-network provider, as this significantly impacts the billing process and reimbursement rates.

To streamline the billing process, physical therapy practices should consider investing in reliable billing software that integrates with their EMR/EHR system. This helps automate tasks, reduce errors, and improve the accuracy and timeliness of reimbursement claims.

Verify a client's insurance benefits for physical therapy

Verifying a client's insurance benefits for physical therapy is the first step in physical therapy billing. This process can be facilitated by following these steps:

Step 1: Gather Patient and Policyholder Details

• Collect the patient's name and date of birth.
• Ask if they are the primary policyholder. If not, gather the name and date of birth of the primary policyholder and their relationship to the patient.

Step 2: Collect Insurance Plan Information

• Obtain the name, address, and phone number of the insurance carrier from the insurance card.
• Note down the policy and group numbers.

Step 3: Prepare Relevant CPT and ICD Codes

Prepare a list of CPT (Common Procedural Technology) and ICD-10 codes relevant to the patient's treatment. CPT codes refer to the treatments administered, while ICD codes refer to the patient's condition.

Step 4: Verify Benefits

• Contact the insurance company to verify the patient's benefits. This can often be done through an online portal or by calling the insurance company.
• Prepare a list of questions to ensure you obtain all necessary information:
• How many physical therapy visits are allowed per year, and how many are remaining for the policy year?
• Is there a limit on visits, or can more be requested? What is the process?
• When is the policy end date?
• Is a physician referral, pre-authorization, or evidence of medical necessity needed before commencing care or at any interval during treatment?
• Is the therapist/clinic in-network or out-of-network?
• Does the patient have a copay, and what is the amount?
• For multidisciplinary visits (e.g., PT and OT in one day), are separate copays required?
• Does the patient have a deductible, and how much has been met?
• Are there any limitations or requirements that must be fulfilled before the first visit?

Once the client's insurance benefits have been verified, the next steps in physical therapy billing include documentation, CPT code selection, submitting claims, payment posting and reconciliation, and preparing for claims audits.

Document and select CPT codes

CPT stands for Current Procedural Terminology. CPT codes are used to classify medical, surgical, and diagnostic services and procedures. CPT codes are used in physical therapy billing to communicate uniform information about the services rendered to healthcare payers. CPT codes are copyrighted by the American Medical Association.

CPT codes are used in conjunction with ICD-10 codes, which refer to the patient's diagnosis. ICD-10 codes are the standard international system for recording diagnoses and are created and monitored by the World Health Organization.

Modifiers are sometimes added to CPT codes to more accurately describe a procedure or service. Modifiers should not be used to receive higher reimbursement or to get paid for a procedure that should be bundled with another code.

The most common CPT codes for physical therapy include:

• Therapeutic exercises (97110)
• Neuromuscular re-education (97112)
• Therapeutic activities (97530)
• Electrical stimulation (unattended) (97032)
• Gait training (97116)
• Manual therapy (97140)
• Group therapy (97150)
• Self-care/home management training (97535)
• Physical performance test or measurement (97750)
• Prosthetic training (97761)
• Checkout for orthotic/prosthetic use (97762)

When billing for physical therapy services, it is important to select the CPT codes that best represent the services provided. This helps ensure accurate reimbursement and reduces the risk of claim denials.

Selecting the Correct CPT Codes

When selecting CPT codes for physical therapy billing, it is important to consider the following:

• The specific services provided: CPT codes should accurately reflect the treatments and procedures administered to the patient.
• The complexity of the evaluation: For evaluations, there are separate CPT codes for low, moderate, and high complexity (97161-97163).
• The time spent on each service: Some CPT codes are billed in 15-minute increments, and the 8-minute rule applies.
• The use of modifiers: Modifiers may be added to CPT codes to indicate that a service was provided separately or distinctly from another service.
• Reimbursement rates: Different CPT codes have different reimbursement rates, so it is important to consider this when selecting the appropriate code.

Documentation

Accurate documentation is crucial for physical therapy billing. Detailed documentation helps support billing decisions and justifies requests for payment. It is important to record the exact treatment provided, including the time spent on each service. This information is used to select the appropriate CPT codes and helps guard against claim denials and fraudulent billing practices.

In addition to selecting the correct CPT codes, physical therapy billing also involves verifying insurance benefits, submitting claims to insurance companies, posting and reconciling payments, and preparing for claims audits.

Submit claims to insurance companies

Once a physical therapist has completed their documentation, including the appropriate physical therapy billing ICD-10 and CPT codes and modifiers, the information is submitted to a biller to generate a claim form. Most claims are now electronic, although paper claim forms are still used in some cases. The Universal Claim form CMS-1500 is the most common, but payers may also provide their own forms.

Electronic claims are submitted to a claims clearinghouse, which acts as a middleman between the therapist or business and the payer. When submitting a claim, it is important to review the information to ensure it is "clean". A clean claim, whether paper or electronic, means that it is accurate, complete, and legible. Once the clearinghouse has verified the claim is clean, they will submit it to the insurance company. If they notice missing information, they will "reject" the claim and send it back to the therapist to amend or correct.

If a therapist is billing in-network, insurance companies will take into account the payment rates for CPT codes. However, out-of-network physical therapy providers can determine how much they are going to charge for their services. When deciding on fees, out-of-network providers should consider UCRs (Usual, Customary and Reasonable). This is defined by HealthCare.gov as "the amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service".

It is important to note that Medicare and Medicaid typically require that claims be submitted within 365 calendar days from the date of service. Private insurers tend to set shorter deadlines.

Post and reconcile payments

Posting and reconciling payments is a critical step in the revenue cycle management process. It involves recording payments, depositing funds, and reconciling these numbers. This process is necessary to ensure that a provider is receiving all payments owed to them.

• Receive Payments: Once the insurance company auditor receives the claim, they will determine the reimbursement amount for the therapy services. The insurance company will then send a check or direct deposit to the therapy clinic or therapist.
• Post Payments: The received payments should be entered or "posted" into the clinic's accounting system. This step involves recording the payment amount, date of payment, payer, and other relevant details for each claim.
• Reconcile Payments: Compare and verify the payments received (from insurance companies, government programs, or patients) with the billed charges for healthcare services. Ensure that every dollar collected is ultimately credited to your bank account.
• Identify Discrepancies: Discrepancies can occur due to coding errors, contract negotiation issues, or billing mistakes. Identify these discrepancies and take appropriate action to resolve them.
• Appeals and Corrections: If a discrepancy is found, the provider may need to file an appeal with the payer to address denied claims or incorrect payments. This may involve submitting additional documentation or clarifications to support the claim.
• Balance and Report: Once all discrepancies are resolved, balance the accounts and generate reports to track payment trends, identify areas for improvement, and ensure accurate financial records.
• Continuous Monitoring: Payment reconciliation is an ongoing process in medical billing. Healthcare providers must regularly monitor and reconcile payments to ensure accuracy and maximize revenue.

By following these steps, physical therapy providers can ensure accurate and timely payment reconciliation, which is essential for the financial health of their practice.

Prepare for claims audits

Audits are becoming more common in the rehabilitation industry, with billing fraud and abuse being a serious concern. While audits can be daunting, there are several steps you can take to prepare and reduce the likelihood of an audit. Here are some tips to help you get ready for potential claims audits in the context of physical therapy billing:

• Understand common triggers for audits: Non-compliance with Medicare's 8-minute rule and/or CCI edits, excessive use of modifiers, missing certifications or signatures in the plan of care, insufficient documentation, billing for individual therapy when group therapy was provided, and failing to provide evidence of medical necessity are some common triggers.
• Implement regular internal audits: Conducting regular internal audits can help identify issues early on and make necessary improvements. This can be done manually or with the help of EHR/EMR software that can catch common errors before claims are submitted.
• Establish policies and procedures for compliance: Create clear policies and procedures that support compliance with billing and documentation requirements. Appoint a compliance officer or committee to oversee these matters and provide training to employees on proper coding and documentation standards.
• Know your billing rights: Understand the differences between in-network and out-of-network billing. In-network providers have a contract with the insurance company and must follow their billing guidelines, while out-of-network providers have more flexibility in determining their fees but may face higher patient fees and less coverage for certain plans.
• Verify patient information: Before beginning treatment, verify patient demographics and insurance information, including primary and secondary payers. This helps ensure that you submit a "clean" claim that is complete, accurate, and legible.
• Maintain defensible documentation: Thorough and accurate documentation is crucial. Describe each patient's history, interventions, and clinical decision-making processes in detail. This will not only support your billing processes but also help in the event of an audit.
• Stay up to date with billing terminology, guidelines, and regulations: The world of billing and insurance is constantly evolving. Stay informed about any changes in billing terminology, insurance guidelines, laws, and regulations to ensure compliance and make billing easier.
• Consider using billing software: Using billing software can streamline the billing process and reduce errors. Look for software that integrates with your EMR/EHR system to eliminate double data entry. Additionally, consider software that offers features such as Electronic Remittance Advice (ERAs), EOB and payment posting, clearinghouse integration, patient portal, invoicing, and insurance eligibility verification.
• Outsource billing if needed: If managing billing in-house is challenging, consider outsourcing to a PT-specific billing service. These services can handle revenue cycle management, maximize reimbursements, and minimize denials.

Frequently asked questions