Physical Therapy CPT Codes: Complete Guide for Correct Billing & Reimbursement

If you are a physical therapist, you know the hard work does not end when a session is over. The real test often comes when it is time to bill for your services. You may deliver excellent care, but without the correct CPT codes, that effort may not translate into fair reimbursement. In fact, many clinics lose revenue each year simply because of coding mistakes, unclear documentation, or missed payer rules.

Physical therapy billing does not have to feel like a guessing game. CPT codes are simply the bridge between your care and the payment you deserve. When you understand how to choose the proper codes, apply timing rules correctly, and align documentation with payer requirements, billing becomes smoother, claims get approved faster, and your practice enjoys a healthier cash flow.

This blog will provide you with a complete guide on the correct billing of physical therapy codes to maximize reimbursement.

Step 1: Understand the Basics of CPT Coding

Before starting with billing, every physical therapist and billing team should understand the basics of CPT codes. They are five-digit numeric codes that provide a standardized way to report the treatments delivered to patients and secure reimbursement from insurers. These codes represent the exact services a physical therapist performs, such as therapeutic exercises, manual therapy techniques, or gait training sessions, and they determine how much a practice gets paid for its work.

Step 2: Select the Correct CPT Code for Each Service

The next step is to assign the correct code to the treatment performed to ensure accurate billing in physical therapy. These codes are divided into two categories:

Timed codes are billed in 15-minute units and require direct, one-on-one interaction with the patient. The number of units billed depends on the total treatment time. Some of the most common timed codes include:

• 97110 – Therapeutic Exercise: Exercises to improve strength, endurance, flexibility, or range of motion.
• 97112 – Neuromuscular Re-education: Training that improves balance, coordination, posture, and movement control.
• 97140 – Manual Therapy: Hands-on treatments such as joint mobilization, manipulation, or manual lymphatic drainage.
• 97116 – Gait Training Therapy: Activities that focus on improving walking ability, mobility, and balance.
• 97530 – Therapeutic Activities: Functional tasks such as lifting, reaching, or bending designed to improve daily performance.
• 97535 – Self-Care/Home Management Training: Education and training to help patients independently manage activities of daily living (ADLs).

Untimed codes are billed once per treatment session, regardless of how much time is spent delivering the service, i.e., treatment duration. The most common untimed codes include:

• 97010 – Hot or Cold Pack Therapy: The application of hot or cold packs to reduce pain, swelling, or stiffness.

Evaluation and Re-Evaluation Codes:

In addition to treatment codes, physical therapists also use evaluation codes to assess a patient’s condition and re-evaluation codes to measure progress. These are billed once per session, which makes them untimed codes:

• 97161 – Low-Complexity Evaluation: For straightforward cases with minimal examination and simple decision-making.
• 97162 – Moderate-Complexity Evaluation: For cases requiring a more detailed assessment and moderate clinical judgment.
• 97163 – High-Complexity Evaluation: For complex cases that involve extensive examination and advanced decision-making.
• 97164 – Re-evaluation: Used when reassessment is necessary to update or modify the treatment plan.

Step 3: Apply the 8-Minute Rule Correctly

The 8-minute rule is one of the most essential guidelines in physical therapy billing as it determines how many units of a timed CPT code can be billed. Medicare and many commercial payers primarily use it for timed CPT codes.

Under this rule, a therapist can bill one unit of a timed code if the service is performed for at least eight minutes. As each unit represents fifteen minutes, the time spent with the patient directly affects the number of billable units. The following reference is widely used to calculate billing units:

• 8 - 22 minutes = 1 unit
• 23 - 37 minutes = 2 units
• 38 - 52 minutes = 3 units
• 53 - 67 minutes = 4 units

In cases where more than one timed service is provided in a single session, the total time spent on each service can be combined to determine the correct number of units.

For example, if a physical therapist delivers twelve minutes of 97110 (Therapeutic Exercise) and eleven minutes of 97140 (Manual Therapy), the total time comes to twenty-three minutes. This allows the provider to bill for two units, even though neither service alone met the full fifteen-minute threshold.

Step 4: Documentation

Payers require clear documentation that matches the CPT codes submitted for billing. Without proper records, claims may be denied even if the treatment was appropriate. It includes:

• Initial Evaluation: Patient diagnosis, goals and treatment plan.
• Daily Treatment Notes: Detailed description of services, time spent, and patient response.
• Progress Reports: Updates on patient improvement and ongoing medical necessity.
• Discharge Summary: Outcomes and recommendations for continued care.

Step 5: Use Modifiers the Right Way

Modifiers are two-character codes added to CPT codes that provide extra information to payers. The essential Modifiers include:

• GP – Indicates the service was provided under a physical therapy plan of care.
• 59 – Identifies a distinct service when codes normally overlap (e.g., billing 97110 and 97112 on the same day).
• KX – Required when services exceed Medicare’s annual therapy threshold of $2,410 in 2025.
• CQ/CO – Indicates services provided by a PTA or OTA, which are reimbursed at 85% of the rate.

Step 6: Follow Medicare Guidelines

Medicare sets strict rules for physical therapy billing. The key Medicare Rules for 2025 are:

• Therapy Thresholds: Claims above $2,410 must include the KX modifier.
• Multiple Procedure Payment Reduction (MPPR): Medicare reduces practice expense payments by 50% when multiple therapy services are billed during the same session.
• Telehealth Services: Only specific PT codes such as 97110, 97112, 97530, and 97161–97164 are approved for telehealth billing.
• Conversion Factor: The Medicare conversion factor has decreased to $32.36, meaning accurate coding and efficient workflows are essential for maintaining revenue.

Step 7: Avoid Common Billing Mistakes

Many denials occur due to simple errors, which can result in thousands of dollars in lost revenue for practices. The frequent errors to avoid include:

• Rounding treatment time incorrectly under the 8-minute rule.
• Billing duplicate services without modifier 59.
• Forgetting to add GP or KX when required.
• Using codes not recognized by specific payers.

Step 8: Prevent Denials and Improve Accuracy

Denials are costly, but they can often be prevented with better documentation and the right tools. The best ways can be:

• Track denial rates by reason (e.g., missing modifiers, incomplete notes).
• Appeal denied claims promptly with corrected information.
• Use denial data to train staff and adjust workflows.
• Conduct internal billing audits at least quarterly.
• Use the technology to reduce errors such as:

• EHR Systems: Automatically track time spent on treatments and generate compliant notes.
• Billing Software: Flags missing modifiers and incorrect codes before submission.
• Claim Scrubbing Tools: Detect errors that would cause rejections for ensuring “clean claims” are sent to payers.

Step 9: Strengthen Your Revenue Cycle

Finally, successful billing goes beyond coding. A strong revenue cycle ensures consistent cash flow and financial stability, which can be achieved by:

• Insurance Verification: Confirm patient benefits before starting care.
• Patient Education: Clearly explain out-of-pocket costs to avoid payment issues later.
• Timely Claim Submission: Submit claims quickly to reduce delays.
• Accounts Receivable (AR) Management: Track unpaid claims and follow up promptly.

Outsourcing Billing to 24/7 Medical Billing Services

As the final step in strengthening the revenue cycle, many physical therapy practices choose to outsource physical therapy billing and coding services to 24/7 Medical Billing Services. This approach not only removes the stress of navigating coding rules and payer requirements but also ensures that claims are submitted accurately and payments are collected on time. With a dedicated team of billing specialists, practices gain the advantage of expert knowledge, advanced technology, and round-the-clock support. Therefore, outsourcing to a trusted billing partner is often the most reliable long-term strategy for clinics seeking to reduce denials, enhance cash flow and strengthen their bottom line.

FAQs

Q1. Can physical therapy CPT codes be billed via telehealth?

Yes, but only specific codes are approved for telehealth reimbursement.

Q2. Can assistants bill under physical therapy CPT codes?

Yes, but services by PTAs/OTAs are reimbursed at reduced rates.

Q3. Is there a cap on how much Medicare pays for PT codes?

Therapy thresholds apply, beyond which modifiers are required.