Physical therapy, OT and rehabilitation billing services
Timed units, therapy modifiers, Medicare's KX threshold and plan of care rules apply to every visit. We bill PT, OT and PM&R care with the documentation payers look for.
Why rehabilitation billing takes specialty knowledge
Rehabilitation billing is a game of minutes and paperwork. Physical and occupational therapy visits are billed mostly in 15-minute timed units, and Medicare counts them using the 8-minute rule across all timed services in the visit. Each line needs the right therapy modifier, assistant services need CQ or CO, and once a patient's yearly therapy spending passes the KX threshold, every claim needs proof of medical necessity.
SFA Solutions bills for outpatient PT and OT clinics and physical medicine and rehabilitation physicians. We calculate units from documented minutes, track each Medicare patient's progress toward the KX threshold and flag plans of care that need certification or recertification. For PM&R, we code EMG and nerve conduction studies, injections and E/M visits. We work inside your EHR and aim to submit most clean claims within 24 hours of final review.
Common codes we work with in rehabilitation
| Code | Description |
|---|---|
| 97161 | Physical therapy evaluation, low complexity |
| 97165 | Occupational therapy evaluation, low complexity |
| 97110 | Therapeutic exercise, each 15 minutes |
| 97140 | Manual therapy techniques, each 15 minutes |
| 97530 | Therapeutic activities, direct one-on-one, each 15 minutes |
| 97112 | Neuromuscular reeducation, each 15 minutes |
| 95886 | Needle EMG, each extremity, with related paraspinal areas, done with nerve conduction studies (add-on) |
| 95910 | Nerve conduction studies, 7 to 8 studies |
CPT is a registered trademark of the American Medical Association. Payer rules vary; we check each payer's current policy.
Where rehabilitation practices lose revenue
The 8-minute rule and timed units
For Medicare, total timed minutes are added up and converted to units: 8 to 22 minutes is 1 unit, 23 to 37 is 2, and so on. Codes like 97110 (therapeutic exercise), 97140 (manual therapy) and 97530 (therapeutic activities) are timed. Many commercial plans count each code separately, so the method depends on the payer.
Therapy modifiers and assistant services
Every therapy line needs GP (physical therapy), GO (occupational therapy) or GN (speech therapy). Services furnished in whole or in part by a PTA or OTA need CQ or CO, and Medicare pays those services at 85% of the fee schedule rate.
KX threshold and medical review
For 2026, the Medicare KX threshold is $2,480 for PT and speech therapy combined and $2,480 for OT. Above that amount, claims need modifier KX and documentation that continued therapy is medically necessary. Claims above $3,000 can be selected for targeted medical review.
Plan of care and PM&R procedures
Medicare requires a plan of care certified by the physician or NPP, generally within 30 days of the initial evaluation, and recertified at least every 90 days. PM&R physicians bill needle EMG (95886) with nerve conduction studies (95907 to 95913) by number of studies, plus trigger point injections (20552, 20553) and E/M visits.
What else affects rehabilitation revenue
A/R challenges in rehabilitation
Rehab A/R is made up of many small claims, so one denial pattern, such as a missing plan of care certification or KX modifier, can affect dozens of visits before anyone notices. Commercial plans with visit limits deny visits once the approved number is used. High deductibles and per-visit copays also leave patient balances that build across long episodes of care.
Credentialing considerations
Each physical and occupational therapist bills under their own NPI and needs enrollment with Medicare and each commercial plan, while PTAs and OTAs are not enrolled separately and bill under the supervising therapist. Since 2025, Medicare allows general supervision of PTAs and OTAs in private practice. Opening a new clinic location means adding it to every payer's roster before therapy visits are billed there.
Payer considerations
Medicare's KX threshold is updated each year, and claims above it need the KX modifier with documentation of medical necessity, with targeted medical review possible at a higher level. Many commercial and Medicare Advantage plans use utilization management vendors that approve a set number of visits per authorization. Workers' compensation and auto claims usually follow state fee schedules and need adjuster approval.
Rehabilitation coding details that affect payment
ICD-10 considerations
Therapy claims usually list the medical diagnosis that led to the referral along with a treatment diagnosis that describes the deficit, such as M62.81 (muscle weakness, generalized) or R26.89 (other abnormalities of gait and mobility). Injury codes used during rehab carry the 7th character D for a subsequent encounter, since the patient is in the healing phase and no longer in active treatment. Rehab after a joint replacement uses Z47.1 (aftercare following joint replacement surgery) with a Z96.6 code for the joint, such as Z96.651 for a right knee. Low back pain claims need M54.50, M54.51 or M54.59, since the older M54.5 code is no longer valid.
Modifiers to watch
| GP, GO, GN | Required on every therapy line to show whether it was delivered under a physical therapy, occupational therapy or speech-language pathology plan of care. |
|---|---|
| CQ or CO | Added when a PTA or OTA furnishes more than 10% of a service, which reduces the Medicare payment for that line. |
| KX | Applied once the patient's yearly therapy spending passes the Medicare threshold and the record supports continued medical necessity. |
| 59 or XU | Used when NCCI pairs two therapy codes and the services were performed in separate, distinct time intervals. |
| GA | Added when a Medicare patient signs an ABN before therapy that is expected to be denied as not medically necessary, such as maintenance care beyond what the plan supports. |
Global periods
Therapy services have no global period, and outpatient therapy after surgery is billed separately because it is not part of the surgeon's global package. PM&R injections such as trigger point injections (20552, 20553) carry 0-day globals.
Medicare considerations
Since 2025, Medicare treats the plan of care certification requirement as met for the initial certification when a signed and dated order or referral is on file and the therapist sends the plan to the physician or NPP within 30 days. Medicare applies a multiple procedure payment reduction to the practice expense of the second and later therapy units on the same day. Therapy claims also need the correct functional and medical necessity documentation for the KX process.
Rehabilitation billing KPIs to track
- Units billed per documented minutes. Comparing units to total timed minutes shows whether the 8-minute rule or payer-specific counting is being applied correctly.
- Patients approaching the KX threshold. Tracking each patient's yearly total lets the clinic add KX and documentation before claims deny.
- Authorization visit utilization. Visits provided after the approved count is used are denied, so this shows where reauthorization should start.
- Plan of care certification timeliness. Uncertified or lapsed plans of care can deny every visit in the episode.
Rehabilitation billing audit checklist
- Compare documented timed minutes with billed units on a sample of visits.
- Confirm every therapy line carries GP, GO or GN.
- Check that CQ or CO is applied when an assistant furnished more than 10% of a service.
- Verify plans of care are certified and recertified within Medicare's time frames.
- Review claims above the KX threshold for modifier KX and supporting documentation.
- Confirm injury diagnosis codes use the correct 7th character for subsequent encounters.
How SFA runs rehabilitation billing
We review your recent therapy claims for unit calculations, modifiers, KX use and plan of care dates.
We verify visit limits and authorizations for each new patient and track remaining visits as care continues.
Coders convert documented minutes to units, apply GP, GO, CQ, CO and KX as needed with a 24-hour target for submitting clean claims after final review.
We flag expiring certifications and authorizations each week and work denials through follow-up and appeal.
The services that matter most for rehabilitation
Medical Coding
Unit math under the 8-minute rule and correct therapy modifiers decide the payment on each therapy claim.
Learn moreEligibility Verification & Prior Authorization
Visit limits, authorization requirements and remaining therapy benefits need checking before the plan of care starts.
Learn moreBilling Compliance
Plan of care certification and KX documentation are frequent audit targets in therapy billing.
Learn moreWhat practices typically see with SFA
Averages and selected client results. Your free audit shows where your own numbers stand today.
Target for the claims we manage, not a measured average.
Highest improvement seen in selected client results.
Largest drop in A/R days seen in selected client results.
Targeted for submission within 24 hours after final review.
From primary care and nurse practitioners to surgery and imaging.
We work inside the system your practice already uses.
Results vary by practice, specialty, payer mix, claim volume, billing history, documentation and other factors. Performance figures represent average or selected client results and are not guarantees of future performance. The 95% figure is a clean-claim target, not a measured cohort. The client-results page does not include a measurement period, starting collections, or practice size.
Rehabilitation billing questions
What is the 8-minute rule?
It is Medicare's method for counting timed therapy units. Total timed minutes in a visit are added together, and a unit is billable once 8 minutes are reached, with each further unit at 23, 38, 53 minutes and so on.
What is the KX threshold for 2026?
$2,480 for physical therapy and speech therapy combined, and $2,480 for occupational therapy. Services above it are covered when medically necessary and billed with modifier KX.
When are CQ and CO modifiers required?
When a physical therapist assistant (CQ) or occupational therapy assistant (CO) furnishes more than 10% of a service. Medicare pays those services at 85% of the normal rate.
How often does a plan of care need recertification?
For Medicare, at least every 90 days, or sooner if the plan's duration is shorter or the plan changes significantly.
Do you bill for PM&R physicians?
Yes. We bill E/M visits, EMG and nerve conduction studies, joint and trigger point injections and other PM&R services alongside therapy billing.
Related specialties
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