Most therapists have a love-hate relationship with billing. Billing gets you paid! But billing can also be a headache, especially if you aren’t yet familiar with all of the payer requirements. Understanding and optimizing your billing process will make your practice healthier and will provide you with peace of mind that you’re being reimbursed appropriately.
One of the most confusing aspects of billing is how to use therapy billing units. When do you use them? How do you calculate them? And what about multiple timed-code services? In this post, we share how billing units work, how to administer the 8-minute rule for timed treatments, and some helpful tips to make your billing easier and more efficient.
How Billing Units Work
There are two types of CPT (Common Procedural Technology) codes used for billing: service-based codes, and time-based codes. Service-based codes represent services that can only be billed one time per client per day, regardless of how much time was spent in delivering the service. Time-based codes, on the other hand, are based on the amount of time you spend with your client delivering the service that the code represents. Typically, a billing unit equates to 15-minutes of time. But what if the time you spend doesn’t fall into neat 15-minute increments? Calculating timed-code billing units can get confusing, especially in cases where you’re billing for multiple services performed on the same day. Most payers use the “8-minute rule” to determine how many billing units should be paid for a time-based service.
Timed Codes and the 8-Minute Rule
The 8-minute rule, which originated with Medicare and then became the standard used by most private payers as well, provides guidance on how many units of time you should bill for time-based CPT codes.
The original wording of the guidelines by Centers for Medicare & Medicaid Services is as follows:
“When only one service is provided in a day, providers should not bill for services performed for less than 8 minutes. For any single timed CPT code in the same day measured in 15 minute units, providers bill a single 15-minute unit for treatment greater than or equal to 8 minutes through and including 22 minutes.”
Here’s how the 8-minute rule works in various situations:
When you provide only one service to a client in a day, the rule is fairly straightforward. You should only bill if the service was performed for at least 8 minutes. For services delivered between 8 minutes and 22 minutes, you would bill one unit of time. Starting at 23 minutes, 2 units of time may be billed.
When you provide multiple treatments in a single day, it gets a bit more complex. There are two scenarios: multiple short treatments and multiple treatments that are longer than 8 minutes. Here are some practical examples for how to handle these situations.
Multiple Short Treatments
If multiple timed treatments are offered within a single day and each is less than 8 minutes, you should add the total time spent on all treatments and charge one unit of time for the CPT code with the highest time spent. So, if there are three treatments that are 4, 5, and 7 minutes respectively, one unit of time may be billed towards the treatment that was 7 minutes of time.
Multiple Treatments of at Least 8 Minutes
When you provide more than one treatment in a day and each of them takes at least 8 minutes of time, add the total of the entire time spent and divide the total into 15-minute increments. If there are minutes remaining above the 15-minute increments, you can bill another unit only if they equal at least 8 minutes. So, say you have three treatments that are 9, 10, and 14 minutes respectively. You get a total of 33, which equates to two 15-minute time units. Since you have only three minutes remaining, you would bill for two units.
How to Make Billing Easier
Billing has a lot of moving parts, which can make it overwhelming. Here are some ways to streamline the process to make billing easier and more efficient.
Be Aware of Each Client’s Coverage
Make sure you know your client’s coverage for the services provided to determine what the insurer will pay. Verifying coverage can be time-intensive, but it will (literally!) pay off in the long run by preventing you from having to resubmit claims. Ideally, you should do this before each client visit in case something has changed with their situation. Realistically, this may not be possible, so aim to at least verify coverage at the start of the year since that’s when most policies renew.
Keep Updated Records
Your intake paperwork should include important client information such as name, address, phone number, marital status, date of birth, social security number, employer, and insurance information. Things do change throughout the year, so it’s a good idea to request updates periodically to be sure you have the most current information.
Take Good Notes
Your records should also include documentation of your client’s diagnosis, the type of treatment you’ll be providing, the therapy goal(s), and session duration. You should include notes after every treatment session. If you do need to contact a client’s insurance company about a session, be sure to add a description of the call to the session notes — including the representative’s name, a direct number, any actions either of you said you would take regarding the matter, and a reference number for the issue.
Understand CPT Codes
Getting a claim submitted properly the first time saves time and money, and it makes the process a easier to manage. Make sure you provide the right information on each claim, especially the right CPT codes. You don’t want to under-code and leave money on the table or up-code and charge inappropriately for services. CPT codes may change on an annual basis, so make sure you do a thorough review at the end of the calendar year to capture any changes planned for the following year.
File on Time
Not only is it important for your practice’s cash flow to file on a timely manner, but most payers have requirements that claims be submitted within a certain time period, usually ranging from 30 days to 18 months. If you don’t meet their requirements, payers may deny the claim. To manage this, create a fixed billing schedule to bill on a regular basis to ensure your claims aren’t late.
Understand Denials and Resubmit Them When Appropriate
Obtaining a 100%-clean claim acceptance rate is an aspirational but probably unrealistic goal. You’re likely to get an occasional denial even if you have a seamless billing process. You need to have a process for managing them. When insurance companies deny a claim, they provide a reason for it, so you’ll want to review the information provided to see if you can remedy the issue and resubmit the claim. Periodically, take a look at all of your recent denials to see if you’re able to identify trends that may help you to improve your process.
For more on denial management, check out Denial Management Best Practices.
Streamline and Automate with Software
A great process can be enhanced by a good practice management software. Investigate options that will offer your practice a streamlined and more automated process for handing your billing. Software will help to make billing less of a hassle and improve your claims accuracy, leading to faster reimbursement.
Continually Improve Your Billing Process
It’s a good idea to periodically review your process to see where improvements might be made. Is there a gap somewhere that might be addressed to increase efficiency? Test out possible improvements and be open to making adjustments where needed.
Though billing may never be one of the enjoyable parts of your work, you can make it much less painful by understanding the basics of coding and claims submission, working to improve your processes, and using a software that helps you organize and more easily manage your practice.
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