Insurance billing for therapists is the same claim cycle every practice runs, with two things that make it a therapist's problem: the units on a physical or occupational therapy claim come from timed minutes under the 8-minute rule, and a mental health claim lives or dies by the session code and the authorisation. The therapist billing their own practice, or the one person at the desk doing it for them, needs a cycle they can run every week without a billing department. This page walks that cycle: eligibility before the visit, the code and the units from the note, the claim sent, the EOB posted against it, the denial worked before the filing limit, and the patient statement that is right because the posting was.
Before the visit: eligibility, the benefit and the authorisation
Every insurance denial that was avoidable was avoidable here. The plan is checked for the date of service: is therapy a covered benefit, how many visits a year, is a referral or a prior authorisation required, what are the deductible and the copay today. The answers go on the register against the patient's plan, and the front desk collects the copay at the visit. A therapist who bills without this step is billing to find out, and the finding out arrives as a denial six weeks later.
The note into the claim: codes, units and the plan of care
For physical and occupational therapy the timed minutes across the timed codes become units under Medicare's 8-minute rule, which the free billing units worksheet on this site works from the minutes; a unit needs at least 8 minutes documented. For mental health the session length picks the code and the authorisation number goes on the claim. Medicare's benefit policy manual describes the plan of care and the documentation a therapy claim rests on, and the claim goes out as an 837 through a clearinghouse or on the CMS-1500 on paper.
The EOB posted against the claim, line by line
When the remittance arrives, each claim line is reconciled: the charge, the allowed amount, the contractual adjustment, the deductible and coinsurance applied, the payer's payment. The EOB reconciliation worksheet here works one line and shows the check that payment, patient share and adjustment add back to the charge. Posted line by line, the patient statement is right; posted as a lump, nobody can say why the patient owes what the statement says.
The denial worked, and the deadline it has to beat
A denied line carries a reason code, CO 16 for missing information, CO 96 for non-covered, CO 252 for an attachment wanted, and a remark code that says what to do. The corrected claim or the appeal goes out against the filing limit, which for Medicare is 12 months from the date of service under 42 CFR 424.44 and whatever the contract says for commercial payers. The register records the denial with its date and code so it is worked that week; the claims cycle worksheet shows the denial rate all of this produces.
Questions people ask about insurance billing for therapists
Do therapists need a clearinghouse to bill insurance?
For electronic claims, yes: the clearinghouse carries the 837 to the payer and reports the rejection. Some payers accept paper CMS-1500 claims, which is slower and harder to track.
How are units counted on a physical therapy claim?
Under Medicare's 8-minute rule the timed minutes across all timed codes are added and billed in 15-minute units, with a unit for at least 8 minutes. Untimed codes are one unit each. The worksheet on this site works the count.
What do I do when a therapy claim is denied?
Read the reason code and the remark code, fix what they name, and send a corrected claim or an appeal before the filing limit. Record the denial with its date and code so it is worked and not forgotten.
Is insurance billing for therapists different from billing for psychologists?
The cycle is the same. Psychologists bill session codes with authorisations rather than timed units, and their denials cluster around authorisation and medical necessity rather than unit counts.
Sources
- Medicare Benefit Policy Manual, chapter 15, section 220: covered outpatient rehabilitation therapy services and their documentation
- Medicare Claims Processing Manual, chapter 5, section 20.2: the 8-minute rule and the unit table for timed therapy codes
- 42 CFR 424.44, Time limits for filing claims: the 12-month Medicare filing limit