Medical Billing for Physical Therapy: Guide for Independent PTs in 2025

Independent physical therapists face a unique challenge, delivering hands-on care while navigating increasingly complex billing rules. Unlike large practices with dedicated billing departments, small PT clinics and solo practitioners must juggle patient care, documentation, and insurance requirements. That’s why understanding the ins and outs of medical billing for physical therapy is critical not just for compliance, but also for sustaining your business. This guide is designed specifically for independent physical therapists, breaking down everything from the 8-minute rule to billing modifiers, CPT codes, and Medicare guidelines, so you can bill confidently and accurately in 2025.

This article provides an in-depth look at medical billing for physical therapy, offering independent physical therapists clear guidance on coding, documentation, and payer-specific rules.

Understanding the Basics of Physical Therapy Billing

Medical billing for physical therapy is primarily code-based, relying on the use of CPT (Current Procedural Terminology) codes to describe the services provided. These codes fall into two key categories:

• Timed codes: Billed in 15-minute increments and based on direct one-on-one time spent with the patient.
• Untimed codes: Billed once per session, regardless of the time spent.

For independent PTs, knowing the difference helps ensure correct unit billing and prevents claim denials. For example, therapeutic exercise (97110) is a timed code, while hot/cold pack therapy (97010) is untimed and billed only once per session.

Mastering the 8-Minute Rule

The 8-minute rule is one of the most essential billing rules in physical therapy. It applies to timed CPT codes under Medicare Part B and some private insurers. You must provide at least 8 minutes of one-on-one service to bill a single timed code. The number of total direct treatment minutes determines how many units you can bill:

Example: If you perform 20 minutes of therapeutic exercise (97110) and 15 minutes of neuromuscular re-education (97112), that’s 35 minutes total = 2 units. Understanding this rule is crucial for maximizing reimbursement while staying compliant.

Most Common CPT Codes Used in Physical Therapy

Choosing the right CPT codes is at the core of effective medical billing for physical therapy. Independent PTs commonly use the following codes to report their services:

• 97110 – Therapeutic exercise
• 97112 – Neuromuscular re-education
• 97116 – Gait training therapy
• 97530 – Therapeutic activities
• 97161 – 97163 – PT evaluations (low to high complexity)
• 97164 – Re-evaluation
• 97010 – Hot/cold pack therapy (untimed)
• 97035 – Ultrasound (timed)

CPT Disclaimer: CPT codes are copyrighted by the American Medical Association (AMA). For a full list of CPT codes and official definitions, please refer to https://www.ama-assn.org/

Using Billing Modifiers Correctly

Modifiers are two-character codes appended to CPT codes to indicate specific circumstances. Using the right modifier can mean the difference between getting paid and getting denied. Common modifiers in PT billing are:

• GP – Indicates services are part of a physical therapy plan of care (required by Medicare).
• 59 – Used to show that a procedure is distinct or separate from another service performed on the same day.
• KX – Signals that services exceeded the therapy threshold but are still medically necessary.
• CQ/CO – Required when services are provided by a PTA or OTA; Medicare reduces reimbursement for these.

Always check payer-specific requirements; some private insurers adopt Medicare-like policies, others don’t.

Medicare Physical Therapy Billing Guidelines – 2025 Update

Medicare continues to tighten regulations around therapy services. As of 2025, here are key areas independent PTs should pay attention to:

• Therapy Threshold: In 2025, the annual therapy threshold remains around $2,330 for PT and SLP combined. Claims exceeding this limit require the KX modifier and additional justification in documentation.
• MPPR (Multiple Procedure Payment Reduction): When multiple timed services are billed in one session, Medicare reduces the payment for the second and subsequent services by 50% on the practice expense component.
• Documentation Requirements: Medicare audits rely heavily on clear and timely documentation. Ensure:
  • Plans of care are certified.
  • Progress reports are submitted every 10 treatment visits or 30 days.
  • Daily notes reflect treatment minutes, codes used, and patient response.

Private Insurance Billing: What Independent PTs Need to Know

Unlike Medicare, private payers have diverse billing policies. Common differences include:

• Pre-authorizations are required before starting care.
• Visit limits, such as 20 visits per year or per condition.
• Reimbursement rules for telehealth PT services (still variable across states and plans).

Use a verification of benefits (VOB) template to record pre-authorization numbers, visit caps, and copay details before beginning treatment.

Avoiding Common Billing Mistakes

Here are frequent billing errors that lead to denials or underpayment:

• Rounding up time units incorrectly: Follow the 8-minute rule strictly—don’t bill a second unit at 15 minutes.
• Missing Modifiers: Omitting the GP or KX modifier can cause immediate Medicare rejections.
• Undocumented Time: Services not documented = services not reimbursed. Time spent must align with the CPT code billed.
• Duplicate or incompatible codes: For example, billing 97110 and 97530 together without using modifier 59 (when appropriate).

Revenue Cycle Optimization for Independent PTs

A streamlined revenue cycle management (RCM) process is essential for solo PTs. Here’s a simplified workflow to follow:

1. Insurance verification: Check eligibility, coverage limits, and prior authorizations.
2. Accurate documentation: Record all relevant codes, time spent, and patient response.
3. Claim submission: Submit clean claims using a reliable EHR or billing system.
4. Denial tracking: Monitor rejections, fix issues, and resubmit quickly.
5. Posting & patient collections: Post payments promptly and communicate balances with patients.

If handling this in-house is becoming overwhelming, consider partnering with a billing company experienced in physical therapy billing workflows. Many independent PTs see increased collections and fewer denials when their billing is managed by experts.

Conclusion

In 2025, billing for physical therapy services demands more than clinical knowledge, it requires precision, awareness of payer-specific rules, and consistent documentation. For independent physical therapists, mastering these concepts ensures faster payments, fewer denials, and a healthier revenue cycle. Whether you manage billing in-house or work with a trusted partner, staying informed is your best defense in a complex billing environment.

Need help managing your billing so you can focus on patients?

Medisys specializes in physical therapy billing services for independent providers. We handle it all, from clean claim submission to denial resolution, without asking you to switch your software. Contact us today to streamline your revenue cycle.

Reference:

American Physical Therapy Association – Billing & Coding Resources