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Physical therapy providers often struggle to receive maximum reimbursement for their services. While accurate billing is essential to every PT clinic’s bottom line, understanding how to bill physical therapy services for the greatest compensation can be difficult.
Let’s discuss strategies you can use to improve reimbursement rates.
Physical therapy has experienced a notable decline in service reimbursement over the past decade. PT reimbursement depends on several factors including the insurance type, services provided, the setting PT is provided, and annual changes by payer sources.
The Centers for Medicare & Medicaid Services (CMS) recently announced its Medicare Physician Fee Schedule (MPFS) in a proposed rule for 2025. This annual report will reduce the payment rates by 2.93% compared to 2024 reimbursement rates. Reports indicate that between 2019 and 2024, healthcare providers experienced approximately a 10% reduction in PFS rates.
Commercial or private insurance companies have different rules regarding billing and coding for physical therapy services. Insurance companies such as United Healthcare and Cigna offer therapy coverage but may cap visit numbers, or require a co-payment or other additional payment from the patient. These can affect the projected payment expected per episode of care.
Navigating complex insurance rules and meeting their requirements creates added pressure when treating a full schedule of patients. Staying up-to-date on coding changes provides another layer of complexity in billing. Private insurance companies may limit physical therapy based on the number of visits or services allowed, influencing billing and reimbursement.
Accurate documentation and utilizing appropriate billing for codes for therapy visits are key factors in determining reimbursement rates. The patient must meet the medical necessity criteria to be eligible for physical therapy services to be paid by insurance.
Physical therapists are taught that precise documentation is essential to writing a good visit note. Accurate documentation is also the best route to optimal insurance reimbursement. Insurance companies will deny reimbursement if the details of the visit do not check all of their boxes.
Every note should contain treatment times, services provided, explanations for the necessity of treatment, and patient progress toward goals. A checklist of necessary items within the EMR system can help improve accuracy. Examples of best practices include: reviewing the plan of care, problems list, and goals section on each visit to ensure you’re on the right track and documenting that you did that.
PTs use specialized codes to describe their patient’s problems and services performed during therapy sessions. ICD-10 codes specify the medical conditions, disease classifications, or functional deficits their patients present with during their evaluation. Choosing and utilizing correct billing codes for a patient who recently underwent a rotator cuff repair is a determining factor for insurance payment. For example, if therapists use the code for the left shoulder and they’re treating the right shoulder, insurance will deny reimbursement, due to an error.
Current Procedural Terminology or CPT codes describe the procedures occurring during a physical therapy visit. If you educate the patient to improve their walking pattern the therapist can use a functional code such as therapeutic activities or neuromuscular reeducation. Many CPT codes are time-based units, therefore, if you spent 28 minutes performing therapeutic activities with your patient then you should bill two units of 97530.
Having a system in place to manage proper therapy coding and comprehensive documentation can lead to higher approval rates and lower your denial rates accordingly. Here we provide actionable strategies to enhance insurance claim approval rates:
A proactive approach for accurate billing and improving claim approval is to set up a review process. Another set of eyes or a software system that regularly audits charts and billing can catch errors and reduce denials. A few common errors noted when denial occurs are overbilling for services, the patient not being verified, typographical errors, and mismatching treatment and diagnosis codes. A second look before submission may find a code not allowed by that payer that would have resulted in denial, followed by resubmitting a claim which would delay payment.
Ongoing staff training on reimbursement and billing practices keeps everyone up-to-date. Providing therapists and administrative staff with the current insurance requirements regarding allowed codes and procedures can minimize payment denials. A couple of methods to educate the staff include monthly meetings to review compliance standards with insurance companies, and announcements or emails as needed containing specific changes that affect reimbursement.
Building relationships with payers can lead to improved reimbursement rates. Regular communication can create understanding between the insurance payer and therapist regarding code utilization and payment. Reviewing payer contracts annually provides options to renegotiate rates that better suit the clinic.
A value-based care model emphasizes quality of care, provider effectiveness, and patient outcomes. Providers working together to improve patient experiences can streamline healthcare processes for the betterment of the patient. Presenting payers with patient data reporting good experiences and results can improve relationships with payers.
Payers may be more inclined to support further care and maximize reimbursement when patients show progress. A collaborative effort with healthcare providers and insurance payers could create a payment system that rewards proven care methods and outcomes.
\Therapists should initiate conversations with payers to ensure a clear understanding of current pain points. Plan to contact payers before renewal dates to discuss renegotiation and offer data supporting the benefits of therapy services. Explaining how insurance policies affect the quality of care in a patient-centered business could advance the dialogue toward improving rate reimbursement.
Physical therapists may feel uncertain about some new technology surrounding healthcare. Many likely remember writing SOAP notes by hand but have learned electronic documentation. The benefits of using a therapy-specific EMR far outweigh learning how to master it.
The benefits of using an electronic health record, or EHR, built for rehabilitative therapy include efficient documentation, accurate billing, ensuring compliance, and reduced administrative burdens. SPRY, an AI-powered integrated practice-management solution EHR system that uses therapy-specific terminology and methodology can streamline the reimbursement process and increase clinic revenue.
When EHR systems began initially, they lacked adequate options for all aspects of healthcare equally. Today specialty-specific EHR can automate the documentation process, benefiting the entire staff. SPRY is built to streamline the process from day one treatment to administrative review before submitting the claim.
Here are some impressive statistics reported by SPRY:
That means the therapist can spend more time with patients and the front office can focus on other tasks. Integrated EHR systems enhance the ability to provide value-based care.
Using a billing software management system specific to physical therapy helps relieve the burden of knowing all the ins and outs of billing. Practice management software can optimize billing functions using integrated tools and analysis to track and manage claims. Built-in payer-specific regulations help ensure compliance with insurance companies. Internal error flagging notifies incorrect codes or incomplete claims which helps determine denials.
Physical therapy practices are encouraged to stay up-to-date about insurance regulatory changes that affect reimbursement. These changes are typically announced yearly. Several US government agencies including CMS and individual states oversee health insurance regulation.
“Three federal agencies have overlapping jurisdiction for most federal regulation of private health plans: the U.S. Department of Health and Human Services (HHS), the U.S. Department of Labor (DOL), and the U.S. Treasury Department”, according to KFF, and independent source for health policy.
The National Association of Insurance Commissioners (NAIC) is the U.S. standard-setting and regulatory support organization created and governed by the chief insurance regulators from the 50 states, the District of Columbia, and five U.S. territories.
The American Physical Therapy Association (APTA) is a professional organization promoting advocacy for physical therapists, physical therapist assistants, and students. The APTA provides multiple resources for education and furthering your career. Membership includes product discounts, courses, and professional services.
They are comprised of a governing board that makes policies that guide the practice of PT nationally. The APTA lobbies and advocates for the PT profession in Washington D.C. about issues affecting therapy practice and insurance reimbursement.
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Physical therapists are required to have continuing education to renew their licenses. Pursuing courses that explain the intricacies of insurance reimbursement would benefit the therapist and their clinic. Without the assistance of integrated software to oversee billing practices, therapists must learn insurance reimbursement in other ways.
Several online insurance and healthcare platforms offer informational courses for free. Many clinics mentor therapists to learn proper billing practices. Websites such as YouTube, Coursera, and Udemy offer certificate courses for little to no cost.
To read more such articles, head over to the SPRY PT blog.
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