Billing in physical therapy can be complicated. Here are 5 easy to implement tips to improve your billing practices and grow clinic revenue!
Physical therapy billing is one of the most common places practices quietly lose revenue. According to industry data, up to 20% of physical therapy claims are initially denied, with rework costs ranging from $25 to $117 per claim. For a practice submitting hundreds of claims monthly, that adds up fast. The good news is that most billing errors are preventable. Here are five tips, sourced directly from experienced medical billers, that will help you get paid faster and more consistently for the care you are already delivering.
Medicare billing for physical therapy has specific modifier requirements that, if missed, result in automatic non-payment. Here are the two you need to know.
Every line item on every claim you submit to Medicare should include the GP modifier. The GP modifier states that services were delivered under an outpatient physical therapy plan of care. Failure to attach this modifier to a line item will result in that line item not being paid.
The KX modifier is used when a patient has reached the annual Medicare therapy threshold. According to CMS, the 2026 KX modifier threshold is $2,480 for physical therapy and speech-language pathology services combined, and $2,480 for occupational therapy services. Note that the old hard cap was repealed in 2018 and replaced with this soft threshold system, meaning patients can continue receiving therapy beyond the threshold amount as long as medical necessity is documented.
Every claim you submit after a patient crosses the $2,480 threshold requires the KX modifier on each line item. The KX modifier indicates that your claim has met specific documentation requirements confirming the medical necessity of continued care.
In addition to applying the KX modifier, you must ensure that your therapists are clearly documenting the need for continued skilled care in every note. Medicare is able to request a medical review for all visits after the threshold is crossed and will deny payment if medical necessity is not clearly documented.
A common problem for physical therapy clinics is not easily tracking checks being sent directly to patients. All too often, clinics carry outstanding patient balances of $1,000 or more with no system in place to track them down.
"Our existing software does not give us the ability to quickly see which patients are receiving payment checks from carriers," a billing employee at Edge Physical Therapy and Sports Medicine said. "If the patient is not responsible and bringing checks to us actively, we often fall way behind on collecting payments with no real method to track these balances."
The key is to look for PR-100 codes on Explanation of Benefit documents and ERAs. If you see this remittance code on the response, you know the check is going to the patient. Prompt was built with this in mind and automatically alerts you that the check was sent to the patient when this code is received.
"Prompt's ability to track checks to patients is huge for small physical therapy clinics," said Kelly Langschultz, President of Precision Billing and Consulting. "It makes it easy for a front desk employee to see a patient's balance and it automatically applies to the balance when the check is sent to the patient."
Medicare is specific about which codes it will and will not reimburse for physical therapy. Knowing these in advance saves time and prevents preventable denials.
CPT code 97014 (electric stimulation therapy, unattended): Medicare and many other insurance carriers do not pay for code 97014. However, Medicare does pay for attended e-stim, CPT code 97032. If you performed the e-stim with the patient present and attending, bill 97032 and clearly document the procedure in your notes.
CPT code 97010 (hot and cold packs): Medicare considers 97010 a bundled service and does not pay for the code. Do not bill this code as you will not be reimbursed.
The following codes Medicare will generally only reimburse for up to one unit per visit. When billing any of these codes, clearly document their medical necessity. Billing greater than one unit for these codes is unlikely to result in additional payment.
CPT code 97012 (mechanical traction)
CPT code 97018 (paraffin bath)
CPT code 97028 (ultraviolet)
One of the most common denial codes in physical therapy billing is the CO-50 denial for medical necessity.
"The CO-50 medical necessity denial is 60 to 70% of the denials I see in physical therapy," Langschultz said. "As long as you have quality documentation and understand that the process is to simply appeal with your notes, you have a very high chance of getting paid for these visits. Unfortunately, too many clinics fail to appeal these claims or fail to document well, and leave thousands of dollars of revenue on the table."
If you receive a medical necessity denial, the process should always be to appeal with your clinical notes. A well-documented chart is your strongest tool for recovering denied revenue.
A common billing mistake that causes claim rejections is selecting the wrong carrier when dealing with Oxford and United Healthcare, due to the similarities between their insurance cards.
"The solution is easy. With an Oxford plan, the first digit in the member ID is 1," a biller said. "With a United Healthcare plan, the first digit in the member ID is 9."
Note that member ID formats can change over time. If you are ever unsure, verify directly with the payer before submitting to avoid a rejection that delays payment.
Prompt was designed and developed with these billing tips, along with many others, in mind. Audrey Killip, the billing manager at Edge Physical Therapy and Sports Medicine, discusses how Prompt has helped improve their billing practices.
"Prompt was built to make billing easy," she said. "With the built-in billing logic as well as an all-in-one master screen where I can review notes, edit and submit claims, track responses, and post payments, Prompt has truly made the process simple. You no longer need to click back and forth and use multiple systems, everything you need is right there on one screen, and they prevent you from doing things you should not be doing."
See how Prompt can help you implement these tips. Schedule a demo today.
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