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Medical Billing for Therapist

Medical Billing For Therapist – What You Need To Know

medical billing for therapist

A large number of therapists are entering into the world of private practice nowadays, without having a complete understanding of the essential elements that are required for the success of a business in the long run. And, one of the major and often the most mysterious aspects is Medical Billing.

What is Medical Billing?

Within the United States, health systems and medical billing have become a process that involves healthcare providers to submit Medical claims with health insurance companies to receive payments for performing various medical services. This process also includes a follow-up and an appeal in case the claims are denied or rejected. Unfortunately, submitting applications and getting paid is not straightforward; in fact, it is complicated.
Reimbursement for providing treatments to patients with healthcare Insurance.

Now that we know about medical billing let’s understand the billing process for therapists in private practices.

Physical Therapist’s Billing

Physical therapists are focused on helping people, and on keeping providing successful services, it’s essential to bill and collect payments for providing different treatments. No matter how complex the medical process can be, having an understanding of billing and claims is a must-have for every therapist.

medical billing for therapist

The Codes and Forms

ICD 10 codes commonly known as Diagnosis codes

For successfully billing the services, physical therapists need to diagnose the patients’ conditions, which depicts the medical necessity of the treatments provided. Why is physical therapy needed and provided?

CPT codes commonly known as Procedure codes: 

It is the most widely used medical nomenclature and is used to report medical services and procedures. Insurers use these codes to determine the value of reimbursement that a therapist will receive for providing a service.

The physical and occupational therapists should know the following CPT categories before billing for their respective services.

  • Physical Therapy codes are distinguished between Service codes and timed codes. The therapist needs to add units to each timed code based on the minutes’ therapy (the procedure was) provided. Therapists can bill service code and timed code for one visit. Example

Physical therapy evaluation (97161, 97162, or 97163) or re-evaluation (97164). – Service code irrespective of time

Therapeutic exercise (97110) 1 unit for every 15 minutes – Timed code
hot/cold packs (97010) – Service code irrespective of time.

Many therapists end up under coding or Over coding their claims. We would highly recommend a professional to hire a professional billing company to code appropriately and get maximum reimbursement. Often, therapists make the mistake of omitting assessment and management time when counting billable minutes. Many times therapists forget to add appropriate units based on the time spent on each exercise or procedure.

Service CPT codes

01/ 97161 – Low Complexity, PT evaluation

02/ 97161 – Low Complexity, PT evaluation

03/ 97162 – Moderate Complexity, PT evaluation

04/ 97163 – High Complexity, PT evaluation

05/ hot/cold packs (97010) 06/
electrical stimulation (unattended) (97014)

Timed CPT Codes

01/ Therapeutic exercise (97110)

02/ Therapeutic activities (97530)

03/ Manuel therapy (97140)

04/ neuromuscular re-education (97112)

05/ Gait training (97116)

06/ Ultrasound (97033)

07/ Iontophoresis (97033)

08/ Electrical Stimulation (manual) (97032)
CMS-1500 commonly known as HCFA form

The CMS-1500 is the form for the standard claim for outpatient medical and psychiatric services. It is the red ink on the white paper form used by physicians for claim billing and provides data of the patient, their insurance policy, and diagnosis and treatment. Don’t worry; you rarely hold this form since all Insurance accepts and encourages electronic claims submission.. The key is to get billing software to send electronic claims.

medical billing for therapist

How To Get Setup With The Billing Process?

Get Credentialed first and foremost, get your practice and yourself credentialed. 

Getting credentialed by an insurance company is essential as it will allow the therapists/practice to become an in-network provider and also help them get a large number of potential patients. To get credentialed, they’ll have to obtain an NPI, malpractice insurance, license to practice in the State. Credentialing is a complicated, highly manual, and work-intensive paper process. You need to know which forms to fill, how to submit the application, and what supporting documents to be submitted. 

Almost all Insurances have 60-45 days or more time frame to process paperwork. Please don’t start seeing patients unless you are fully credentialed. Remember, due to one small mistake in the form, and you might have to start over the entire process of credentialing. It is not only painful, but it also makes you lose precious time before you can start seeing patients and start getting paid. 

Verify Patient benefits

Before starting the treatment of any patient, verify if the patient has active coverage.

Choose EHR and Billing software.

Choosing a software might be overwhelming due to the range of choices and the amount it might cost you. We will highly recommend using an EMR which should have these essential functions:

  • An easy to use interface
  • Pt Scheduling options (Session reminders etc.)
  • ERA (Electronic remittance advice posting
  • Patient invoice and billing
  • Progress notes templates
  • Claim tracking
  • Insurance eligibility verification
  • Custom reports (to measure and track performance)
  • Capability to bill claims to Insurance from the software

If physical therapy is a covered benefit under the patient’s plan if you and your practice are participating in the patient’s specific Insurance plan (Network status). Verify if the patient needs prior authorization for physical therapy if there are any restrictions on the number of visits etc. to avoid over-treating the patient and not getting paid.

  • Documentation: Support your claim and coding by appropriate documentation. Make sure patient visits notes, also called progress notes, are documented for each visit, which will be billed to Insurance. Doing this will not only help you stay organized and help treat patients better, but it will also ensure enough documentation to support your claim. This is in case your Insurance asks for patient records before they pay you for the services. 
  • Timely filing for claims to Insurance: every Insurance has a timely filing limit to send claims. For Example, Medicare and Blue Cross Blue Shield give you 365 days to file a claim from the date of service, whereas most State-run Medicaid plans will provide you with only six months to bill from DOS (Date of service). United healthcare gives you only three months to bill out the claim. Check with your local plans on the timely filing limit.
  • Managing cash flow with billing frequency: Irrespective of the months each insurance plan gives you. We recommend sending claims at least weekly. This will ensure faster processing and faster payment in your bank. Similarly, the payment posting should be done regularly to make sure the balance billing can be done on time to the patient or secondary Insurance to complete the Revenue management cycle. Last but not least, any denials or rejections should be followed promptly to get a faster and favorable resolution.

medical billing for therapist

To provide successful therapist services, all the practitioners should follow the billing process. In addition to providing exceptional treatments and services to patients, revenue cycle management is essential for the financial health of the practice. 

If you need help with your billing services please contact Neotlytix at +1 224-365-8400 or email

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