Physical therapy is billed mostly in 15-minute units, which makes the clock the biggest factor in what a practice gets paid. A visit’s timed minutes have to be added up, converted to units under the right rule for the payer, and spread across codes in a way that matches the documentation. Get that conversion wrong and the practice either leaves units unbilled or bills units the record can’t support.
The other rules come from Medicare. Claims need a certified plan of care and progress reports on schedule. Every line carries the GP modifier, a line an assistant helped deliver also carries the CQ modifier, and the KX modifier applies once a patient’s yearly spending passes the threshold. Commercial plans add their own visit limits and authorization requirements on top.
Key Takeaways
- PT evaluations bill by complexity (97161, 97162, 97163). Most treatment codes are timed and billed in 15-minute units.
- Medicare converts total timed minutes to units under the 8-minute rule. Many commercial payers count minutes per code instead.
- Medicare requires the GP modifier on PT services and pays services furnished in part by a PTA, marked with the CQ modifier, at 85%.
- The therapy cap was repealed in 2018. Above the annual threshold, claims need the KX modifier and documented medical necessity.
- Functional limitation G-code reporting ended in 2019 and is no longer required.
Physical Therapy CPT Codes
PT evaluations are untimed and billed once per evaluation at the complexity the documentation supports, based on the patient’s history, the body systems examined, clinical presentation, and decision-making. A re-evaluation (97164) is billed only when there’s a new clinical finding, a significant change in condition, or a failure to respond to treatment. A routine progress check doesn’t qualify.
- 97161, 97162, and 97163 (PT evaluation, low, moderate, and high complexity)
- 97164 (PT re-evaluation)
- 97110 (therapeutic exercise, each 15 minutes)
- 97112 (neuromuscular re-education, each 15 minutes)
- 97116 (gait training, each 15 minutes)
- 97140 (manual therapy techniques, each 15 minutes)
- 97530 (therapeutic activities, each 15 minutes)
- 97535 (self-care and home management training, each 15 minutes)
- 97032 (attended electrical stimulation, each 15 minutes)
- 97014 and G0283 (unattended electrical stimulation, with G0283 used for Medicare)
Hot and cold packs (97010) are bundled under Medicare and aren’t separately payable. Dry needling bills as 20560 or 20561, but Medicare doesn’t cover it and many commercial plans exclude it, so patients should know they may owe the full charge before treatment.
The 8-Minute Rule and Timed Units
Medicare adds up all timed minutes for the visit and converts the total to units. Eight to 22 minutes is one unit, 23 to 37 is two, 38 to 52 is three, and so on in 15-minute steps. The units are then assigned to codes based on how the time was split. A code with less than 8 minutes on its own can still receive a unit when the remaining minutes justify it.
Many commercial payers follow the AMA’s per-code approach instead. Under that method, each timed code needs at least 8 minutes of its own to bill a unit, and leftover minutes aren’t combined across codes. The same visit can produce different unit counts depending on which rule the payer uses, so the billing system has to apply the right one by payer.
Untimed codes, including evaluations and unattended e-stim, don’t count toward the timed total. The record needs total timed minutes, minutes per timed code, and total treatment time for every visit.
Medicare Modifiers and the Plan of Care
Every PT service billed to Medicare carries the GP modifier. When a physical therapist assistant furnishes more than 10% of a service, the line also needs the CQ modifier, and Medicare pays it at 85% of the fee schedule. Missing a CQ where one is required is an overpayment, and adding one where it isn’t needed costs the practice 15% on that line.
The therapy cap no longer limits visits, but Medicare sets an annual threshold that physical therapy shares with speech-language pathology. Claims above it need the KX modifier, which attests that the services are medically necessary and documented. Higher spending can trigger targeted medical review.
Patients can see a PT without a physician referral in every state, but Medicare still requires a plan of care certified by a physician or NPP, generally within 30 days of the evaluation and recertified at least every 90 days. A progress report is due at least once every 10 treatment visits. Claims for visits outside a certified plan of care can be denied even when the treatment itself was appropriate. The same rules apply to speech therapy, which shares the KX threshold with PT.
Commercial Plans, Workers’ Comp, and Auto Claims
Many commercial plans limit PT visits per year and require authorization after the evaluation or after a set number of visits, often through a separate utilization management company. Authorizations usually approve a number of visits within a date range. Visits past either limit are denied, so the authorization has to be tracked against every scheduled appointment. An approval also has to match what’s billed, which we cover in why an approved authorization can still end in a denied claim.
Workers’ compensation and auto no-fault claims make up a large share of PT revenue at many practices. They follow state fee schedules and claim forms rather than health plan rules, need the claim number and adjuster information on file, and often require progress reports sent directly to the carrier before additional visits are approved.
Physical Therapist Credentialing
Licensure and enrollment
Payers verify each PT’s state license and, where applicable, board certification from the American Board of Physical Therapy Specialties, such as orthopedic (OCS), neurologic (NCS), or sports (SCS) certification. Physical therapists in private practice enroll with Medicare individually through PECOS and reassign benefits to their group, and the group enrolls as well.
Physical therapist assistants
PTAs don’t enroll with Medicare and can’t bill under their own number. Their services are billed under the supervising PT with the CQ modifier. Since 2025, Medicare allows general supervision of PTAs in private practice, but state practice acts and some commercial plans still require closer supervision, so the stricter rule applies.
Commercial networks
Each commercial and Medicaid managed care plan credentials PTs separately, usually through CAQH ProView. Some plans route PT through a contracted network manager with its own enrollment. Until a plan approves the PT, their visits can’t be billed to it, which is why you can’t bill what you can’t credential.
Physical Therapy Billing FAQs
What is the 8-minute rule in physical therapy billing?
It’s Medicare’s method for converting timed treatment minutes to units. Total timed minutes are added together, and 8 to 22 minutes equals one unit, 23 to 37 equals two, and so on. Many commercial payers count minutes per code instead.
Does Medicare still have a therapy cap?
No. The cap was repealed in 2018. Medicare now uses an annual threshold, shared with speech therapy, above which claims need the KX modifier and documentation of medical necessity.
When is the CQ modifier required?
When a physical therapist assistant furnishes more than 10% of a service billed to Medicare. Medicare pays CQ lines at 85% of the fee schedule amount.
Is functional limitation reporting still required?
No. Medicare ended functional limitation G-code reporting in 2019. Functional goals and progress still have to be documented to support medical necessity.
When can a PT re-evaluation be billed?
Only when there’s a new clinical finding, a significant change in the patient’s condition, or a failure to respond to the plan of care. Routine progress reports aren’t billed as re-evaluations.
Does Medicare cover dry needling?
No. Dry needling bills as 20560 or 20561, but Medicare doesn’t cover it and many commercial plans exclude it, so patients should be told about the cost before treatment.
Why Physical Therapists Choose Medwave for Billing & Credentialing
Medwave handles physical therapy billing, credentialing, and payer contracting under one team. We apply the right unit rule for each payer, add GP, CQ, and KX where they belong, and track plan of care certifications, progress reports, and authorized visits before claims go out. That’s how we hold a 98% clean claim rate.
On credentialing, we enroll PTs and groups with Medicare, Medicaid, and commercial plans, including the network managers some plans use for therapy, with a 60-day average turnaround.
Contact Medwave below to see how we can support your physical therapy practice.