Medicare physical therapy billing is one of the most complex areas in healthcare reimbursement. For physical therapists, accurate billing ensures not only proper payment but also compliance with federal regulations. Since Medicare follows strict documentation and coding guidelines, understanding how to correctly bill for therapy services can make a major difference in revenue and audit risk.

Medicare covers physical therapy under Part B, which is designed for outpatient services. This includes evaluation, treatment, and follow-up sessions aimed at improving mobility, strength, and overall function. However, every claim submitted must show medical necessity. The therapy provided must be considered essential for the patient’s recovery, not simply for maintaining general fitness or wellness.

To begin the billing process, therapists must establish a plan of care. This plan outlines the goals, treatment type, frequency, and duration. It must be certified by a physician or qualified practitioner before treatment begins. Each therapy session must then be documented thoroughly, showing progress and justification for continued care.

Medicare uses specific CPT (Current Procedural Terminology) codes for physical therapy services. For example, 97110 covers therapeutic exercises, while 97140 covers manual therapy. Each code represents a particular service and time duration, and the therapist must report it accurately to avoid denials. Mistakes like incorrect coding, missing modifiers, or insufficient documentation are among the most common reasons for rejected or delayed payments.

An important element in Medicare physical therapy billing is the Medicare Therapy Threshold, formerly known as the therapy cap. This limit determines how much Medicare will reimburse for therapy services each year. While the hard cap was removed in 2018, claims exceeding the threshold must include the KX modifier, which signals that services beyond the limit are medically necessary. If the patient’s cost exceeds the threshold, therapists must provide clear documentation justifying why continued therapy is required.

Another critical aspect is the 8-minute rule, which dictates how therapists bill for time-based services. Under this rule, a therapist must provide at least eight minutes of a service to bill for one unit. This helps ensure that patients receive proper care while preventing overbilling. Keeping accurate time logs for each service is essential for compliance.

Billing errors can result in severe consequences, including audits, payment delays, and penalties. Therefore, many clinics prefer to outsource Medicare physical therapy billing to professional billing companies that specialize in medical claims management. Outsourcing reduces administrative burden, improves cash flow, and ensures compliance with ever-changing Medicare rules.

In short, successful Medicare physical therapy billing depends on three key pillars—accurate documentation, correct coding, and timely submission. When therapists follow these principles, they not only get paid faster but also maintain a strong reputation for integrity and quality care.