There are more than 40 Medical Specialties, and 88 Subspecialties,all of which require a provider to present an ‘invoice’ to a third party insurance company, if the provider wants to be reimbursed for the services they render.  The process of Billing for Physical Therapy Services is no different than the process of billing for say, Pediatric Medical Services or Cardiology Services.

In this post you will learn the detailed process of how to bill an Insurance Company for Physical Therapy Services, along with some of the corresponding procedure codes, the benefits of choosing a Practice Management Software, and which Procedure Codes most insurance companies have deemed to be ‘medically necessary’ and therefore will reimburse for.

What are the physical therapy procedures viewed as ‘medically necessary’ by insurance companies.

Photo By, Focus Physical Therapy

First off, in order to reach a thorough understanding of what procedures are deemed Medically Necessary, its best to understand the ailments a Physical Therapist would need to treat and the best way in which to treat it.

Here are 4 of the most common justifications Physical Therapy Patients may seek authorization to see a physical therapist:

Physical Therapy after Ankle ligament surgery

Many patients believe that ankle ligament surgery will return the ankle to 100%.  It may, though only by deploying a rigorous and consistent Physical Therapy Program.  Physical Therapy will reduce the possibility of blood clots and minimize the swelling and inflammation which happens because of surgery.  Also, without the use of manual therapy administered by a Physical Therapist, the patient may never gain back the range of motion, they had prior to the injury.

Physical Therapy after knee replacement surgery

Because the knee is the most commonly replaced joint in the human anatomy, with nearly 1,000,000 surgeries performed every year, physical therapists are, shall we say….Busy.  Without A physical therapy program after knee replacement surgery, the patient might not recover the full range of motion in the affected knee.  In order for the patient to build strength back in their new knee following surgery, they will need to consistently follow the outline of a physical therapist.  The physical therapist knows how the knee heals, and will have the expertise to be able to recognize any challenges that arise during the healing process.

Some of the exercises a physical therapist is likely to have a patient do, following knee replacement surgery are:

Leg Lifts and Straight Leg Raises

Here is Cheryl Obregon from TSAOG Orthopaedics demonstrating the proper way to do leg lifts and straight leg raises.

Short Arc Quads

Here is Dr. Sarah Thompson from Pritchette Physical Therapy & Sports Performance in Phoenix demonstrating the proper way to do Short Arc Quads:

Ankle Pumps

Here is Knee replacement patient demonstrating how to do Ankle Pumps.  Narrated by A Parkwest Medical Center Physical Therapist

Physical therapy after total hip replacement surgery

According to Dr. Andrew Richardson an Orthopedic Surgeon located in Honolulu, Hawaii, physical therapy after hip replacement surgery is a ‘must’ for helping the tissues heal.  The American Association of Hip and Knee Surgeons stress these certain exercises are great for assisting in the healing process from Total Hip Replacement Surgery:

Physical therapy after total shoulder replacement surgery (Arthroplasty)

According to Choose PT, there are over 65,000 shoulder replacement surgeries completed each year.  Arthroplasty surgery actually replaces damaged joint surfaces with artificial parts.  Total shoulder replacement surgery actually involves the replacement of both the Humeral Head, and the Glenoid.  The Humeral Head is known as the head of the upper arm, and the Glenoid is a shallow socket which rests on the shoulder blade.

Patients who are suffering from any of the above complaints would likely benefit from understanding general terminology which a Physical Therapist would use during an Initial Evaluation.  Here is a ‘quick reference’ resource of Physical Therapy Terminology shown in visual format:

Physical Therapy Terminology PDF

During an initial evaluation with a physical therapist, a patient may be presented with a range of procedures to assist them in gaining back their strength, elasticity, and range of motion following one of the surgeries listed above.

Most of these Physical Therapy Procedure Codes are considered by Medicare as ‘medically necessary’, and will reimburse for them.

Common Physical Therapy Codes

Understanding this ‘fundamental’ physical therapy terminology and their definitions, may help you understand the billing process.

Initial Evaluation-Your first session with your physical therapist is called an initial evaluation. During this session, your physical therapist will spend time with you to learn about your condition, your previous level of function, and how your condition is affecting your life.  It’s simply a fact finding mission.

Plan of Care are statements that specify the anticipated goals and expected outcomes, along with the anticipated level of optimal improvement.  It’s also an opportunity for the therapist to articulate how therapy can improve their health situation.   The POC describes the specific patient/client management for the episode of physical therapy care.

Initial POC Certification-According to PT Management Support Systems  Medicare requires the POC (Plan of Care) to be certified (signed and dated) by a Physician, Physican Assistant or Nurse Practitioner. The initial certification is for the stated duration of the POC and up to a maximum of 90 calendar days from the date of the initial evaluation. The initial certification is timely if it is dated within 30 calendar days of the initial evaluation.

Documentation-Any entry into the patient record.  Documentation includes things such as a: consultation report, initial examination report, progress note, and flow sheet/checklist.  All of which identify the care/service provided.

What forms are used to bill Physical Therapy Encounters

Typically Physical Therapy visits are ‘documented’, or ‘charted’ in an Electronic Medical Record (EMR) Software Program, by the rendering therapist.  As a Medical Billing Service, Medlink Services, Inc. has the latitude to be able to work with all EMR Software programs, and are not married to one specifically.  That said, we do have our favorites!


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Once the encounter is charted, the pertinent data is pushed to a practice management system, which is often times interfaced with the EMR.

The Practice Management System builds the claim to be exported into an electronic form, and the data is populated onto a CMS approved Form 1500.  Here is a 1500 form in PDF format.  After the 1500 Form is populated into an electronic format, the Practice Management System uploads it through an FTP link or direct interface to a clearinghouse for initial scrubbing.

How a medical practice’s, Practice Management Software can make or break the business

The Practice Management Software enables the business of a medical practice to run efficiently.  The Practice Management Software is where payments are posted, reports are run, patient statements are originated from, and any correspondence with the patient regarding their bills, payments, or insurance can be documented.

The Practice Management Software is the ‘heartbeat’ of a medical practice.  If the interaction between the Software and the Clearinghouse are impeded in any way, your claims and therefore your money will be affected.  The fiscal health of your practice is essentially reliant upon the relationship between the Practice Management Software and the Clearinghouse.  When shopping for a Practice Management Software, its best to find out which Clearinghouse they work with.  In our experience, bigger is not always better.  Here are other options your Practice Management Software enables:

  • ERA’s
  • Claims Tracking
  • Data Analytics/Dashboards
  • Credit Card Integration

How a Medical Claims Clearinghouse works

The Clearinghouse receives the Electronic 1500 Form, and through automation, scrubs the form to make sure the data passes its edits.  The Clearinghouse is looking for things such as; does the policy number represent a true Medicare, Blue Cross, or Aetna Policy.  The Clearinghouse Scrub also checks if the patient data is correct, is the patients name spelled correctly, is the patients date of birth accurate.  For a more detailed reference on the inter-workings of a Medical Claims Clearinghouse, Here is a great post.

Is there any benefit to separating your EMR and Practice Management Software?

Utilizing an interface between the Practice Management Software and the EMR is efficient and streamlines the process, however it removes the opportunity for a ‘human’ to audit.  The #1 reason you would want it audited, is to make sure that, what comes out of the EMR is actually what goes into the Practice Management, and ultimately on to the Clearinghouse.  You are relying on the interface to calculate and move important data, such as the ‘Units of Time’ from the EMR to the Practice Management Software.

 If the ‘Units of Time; are calculated incorrectly, then over time, it will lead to a drip, drip, drip affect and begin to affect your reimbursements.

Here are some of the other things that can affect Physical Therapy Reimbursements:

Make sure to do your due diligence.

  • Timeliness of claim filing.
  • Correct calculation of Units of Time.
  • Was the proper MPPR Calculated?
  • Have you remained at or under the allotted number of allowed visits?
  • Was insurance verified, authorized, and filed?
  • Were Medical Records required at claim submission?
  • Was Primary Insurance properly posted?
  • Was Secondary Insurance billed out in a timely manner?
  • Was patient sent a statement on remaining balance?
  • Was patient balance followed up on?

And, here is the 2022 Medicare Fee Schedule for common physical therapy procedures in a PDF Format.

2022 Physical Therapy common CPT Reimbursements Rates PDF Version

Remember, this is an average Medical Allowable of all the Mac Localities across the United States.  Some states reimburse at a higher rate, others at a lower rate.  This provides a good starting point for creating your pricing structure.  We typically have our clients charge 120% of the allowable, which leaves enough room for an adjustment and variance in price, for all payers.

Lastly, when looking at your Insurance Aging, it’s important to remember it’s a reflection of the; Charge, Adjustment, and Payment.  It’s only the Payment that will increase your bank account, the Charge and Adjustment comes off the aging report, when the payment is posted.  The moral of this story is, perhaps your aging is not as dire as originally though, when the ‘total makeup’ of the aging is considered.

If you’re in need any assistance with any of the steps in your Total Revenue Cycle Management, consider Medlink Services, Inc.

The company who offers that “Boutique” experience to our clients and their patients.   





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