Physical Therapy Billing Services: Timed Codes, Modifiers and KX

The Physical Therapy Codes We Bill Most

Modifiers That Matter

Payer Rules to Know

Top Denials in Physical Therapy Billing Services: Timed Codes, Modifiers and Kx

How Does the 8-Minute Rule Work for Billing Timed Codes?

Medicare counts the total minutes of timed treatment in a day, then converts that total to units. Under Medicare Claims Processing Manual chapter 5, section 20.2 C, a single 15-minute timed code earns one unit at 8 through 22 minutes, two units at 23 through 37, three at 38 through 52 and four at 53 through 67, with the pattern repeating. CMS calls this the 8-minute rule, and it applies to the whole day.

The total caps the units: CMS says you may not bill 4 units for less than 53 minutes, however many services were performed. A code performed for at least 15 minutes should still get at least one unit, so you cannot pour all the minutes into one code.

For an untimed code you enter one unit however long it took; the manual's example is a speech-language evaluation billed once per day. Untimed minutes go in the note as total treatment time but do not add to the timed total.

What if every service is short? The manual says that when two timed services each run 7 minutes or less and the total is 8 minutes or more, you bill one unit for the service that took the most minutes. Example: 7 minutes of 97112 and 6 minutes of 97140 add up to 13 minutes, so bill 1 unit of 97112 and none of 97140. The same logic applies to three or more short services.

Commercial payers may count differently, for example by a more-than-half-of-15-minutes test. We read each payer's own policy at eligibility verification and set the unit logic per payer.

What Documentation Does a Physical Therapy Practice Need to Support the Codes Billed?

Medicare expects a treatment note for every treatment day that names each billed service and records the total timed minutes and the total treatment time. The Medicare Benefit Policy Manual, chapter 15, section 220.3, says time for each separate intervention is not required, but total timed minutes are, and every timed service should be recorded even if it was not billed because it can change the unit count.

Section 220.3 also sets a progress report at least once every 10 treatment days, counting from the first day of the episode, evaluation day included. The period ends on a date the clinician chooses or on the 10th treatment day, whichever comes first. We track that date on the schedule so a long run of visits is not rejected for a missing report.

Which Therapy Modifiers Go on a Medicare Claim: GP, GO, GN, CQ and CO?

Every therapy service on a Medicare claim needs the modifier for the plan of care it was delivered under. Chapter 5 of the Claims Processing Manual defines GP as services under an outpatient physical therapy plan of care, GO as occupational therapy and GN as speech-language pathology. The same chapter says these modifiers should never be used on codes outside the CMS therapy code list.

CQ and CO flag work done in whole or in part by an assistant. CQ marks outpatient physical therapy furnished in whole or in part by a physical therapist assistant (PTA), and CO marks occupational therapy by an occupational therapy assistant. CMS requires them on claims from 2020 and says the CQ modifier must be paired with GP, and CO with GO. Claims that are not paired are returned as unprocessable.

For dates of service on and after January 1, 2022, a claim line with CQ or CO is paid at 85 percent of the otherwise applicable Part B amount based on the fee schedule. Chapter 5 says the 15 percent reduction comes last, after the multiple procedure payment reduction and right before sequestration, and it is taken from the amount paid, not the fee schedule allowed amount.

Small assistant contributions are not reduced. The CMS page describes a de minimis standard under which portions of a service the assistant furnishes independently, up to 10 percent of the total, are not subject to the reduction. For 2022 on, it adds that a final unit where the therapist furnished 8 or more minutes is billed without CQ.

Chapter 5 says CQ and CO apply to private practice therapists and to institutional claims paid at fee schedule rates, but not to critical access hospitals, which are paid on reasonable cost. The 50 percent multiple procedure payment reduction comes first: the CMS Therapy Services page says the highest practice expense therapy service is paid at 100 percent and later therapy services that day at 50 percent of practice expense.

When Is the KX Modifier Required, and What Is the 2026 Threshold?

Medicare requires the KX modifier on therapy lines once a patient's year-to-date allowed therapy amount passes the threshold. For calendar year 2026 the KX threshold is $2,480 for physical therapy and speech-language pathology combined, and $2,480 for occupational therapy. The CMS Therapy Services page and change request R13437CP both state these amounts.

The amounts are the old therapy caps kept as thresholds. Section 50202 of the Bipartisan Budget Act of 2018 repealed the hard caps. The CMS page says claims over the threshold without KX are denied, and the figure is indexed each year by the Medicare Economic Index.

Adding KX is an attestation. Chapter 5, section 10.3, says the provider attests that the services are reasonable and necessary, justified by the record, and qualify for the automatic exception. It calls KX use with no sign the threshold will be reached abusive, for example on low cost services early in an episode.

On institutional claims, chapter 5 says that when one line exceeds the threshold, KX goes on every line for the same therapy group on that claim.

The targeted medical review threshold is $3,000 for PT and SLP combined and $3,000 for OT, per the CMS Therapy Services page and chapter 5, section 10.3.4. CMS says not all claims over it are reviewed, and that the amount is indexed by the Medicare Economic Index from 2028. Limitation of liability continues, so an ABN is the tool when you expect a non-covered service.

Because the threshold runs on the patient's year-to-date amount, we check the remaining amount at eligibility verification and flag the visit that will cross it.

What Are the Plan of Care Certification and Recertification Deadlines?

Medicare needs a physician or NPP to certify the therapy plan of care, and the certification is timely when it is dated within 30 days of the first treatment. The Benefit Policy Manual, chapter 15, section 220.1.3, defines timely certification as documented by signature or verbal order and dated in the 30 days following the first day of treatment, which includes the evaluation.

A verbal order is allowed, but a signature must follow within 14 days. The certification covers the plan's duration or 90 calendar days from the initial treatment, whichever is less. A late signature with a reason for the delay satisfies delayed certification, and certifications are accepted without justification for 30 days after they are due.

Recertification is due when the plan is significantly modified or at least every 90 days after treatment began under the plan. Section 220.1.3 says recertification is timely when dated during the duration of the initial plan or within 90 calendar days of the initial treatment, whichever is less. A recertification is not needed if the certified duration was longer than the entire episode of care.

Two restrictions catch practices. The section says chiropractors may not certify or recertify therapy plans of care, and that optometrists may certify only low vision services. Chapter 5, section 10.3.5, adds that the NPI of the certifying physician or NPP must be on the therapy claim, as a referring provider.

How Do We Bill a PT Evaluation by Complexity?

Bill one of three evaluation codes by complexity, and the choice is documented, not assumed. The CMS October 2026 fee schedule file lists 97161 for a low complexity physical therapy evaluation (about 20 minutes in the descriptor), 97162 for moderate (about 30 minutes) and 97163 for high (about 45 minutes), plus 97164 for a re-evaluation. All four have status A (active).

In that file all three evaluation levels share the same relative values (total 2.93), so Medicare does not pay more for higher complexity; the level matters for commercial payers that price levels differently and for audit defense. Re-evaluation 97164 totals 2.02. The therapist picks the level from the documented history, exam, presentation and decision making.

The NCCI Medicare Policy Manual, chapter XI, section P, sets the limits. A physical therapist may report only one evaluation or re-evaluation on a single date of service, and 97161 to 97163 may not be reported with more than one unit per episode of care. It also says re-evaluation 97164 should not be routinely reported during a planned course of therapy. If the patient's status changes and a re-evaluation is reasonable and necessary, report it with modifier 59 or XU.

Per chapter XI, 97750, 97755 and 97763 are not separately reportable with an evaluation or re-evaluation on the same date when one practitioner or two of the same specialty furnish them.

How Do We Bill 97140 with Other Therapy Codes?

Manual therapy 97140 can be billed with other timed codes only when the services happened in different timed intervals. The NCCI Medicare Policy Manual, chapter XI, section P, says providers should not report more than one physical medicine and rehabilitation service for the same 15-minute period. It also says NCCI edits pairing two timed codes can be bypassed with modifier 59 or XU when the two procedures were performed in different timed intervals, even if they were back to back in the same visit.

That sentence is the rule behind the 97140 and 97530 pair; the manual does not list the pair by number, because NCCI edits are published in a separate quarterly file. Chapter XI adds that providers must code correctly even where no edit exists, so the note must show separate minutes for each service.

The supervised modality family, 97010 to 97028, is the exception: chapter XI says it may be reported for the same 15-minute period as other therapy services. Timed modalities such as 97035 and 97032 do not share that exception.

Modifier 59 is a last resort. We use it only when the note supports separate intervals, and prefer XU where the payer accepts it. See the NCCI edits guide.

Chapter XI also bundles 97140, 97112 and 97124 into chiropractic manipulation of the same spinal region (59 or XS for a different region; see chiropractic billing), and bundles therapy at the same encounter as cardiac or pulmonary rehabilitation into that benefit.

Why Do PT Claims Deny for Medical Necessity, and How Are Other Denials Worked?

The usual cause is a record that does not support the amount of care. X12 defines CARC 50 as non-covered services because the payer does not deem them medically necessary, and CARC 151 as payment adjusted because the information does not support this many or this frequency of services. Thin notes, late progress reports and an unsigned plan of care produce both.

The fix is rarely a rewrite. We check the certification date against the 30-day and 90-day rules, the 10th-treatment-day report, and KX on lines past the threshold, then send the record that shows skilled need. Bundling denials follow the NCCI rules above: CARC 97 means the benefit is included in another paid service, and CARC 4 on a therapy line often means a missing GP or a CQ without GP.

How We Handle Physical Therapy Billing

We run therapy claims against the Medicare rules above before they leave: the total timed minutes against units billed, GP/GO/GN and CQ/CO pairing, the KX amount remaining, certification dates and the NCCI manual. Claims go out within 24 hours of charge entry and denials are worked within 48 hours. For the broader service, see medical billing and eligibility verification.

Our numbers are a 95% clean claim rate and 97% client retention. If your therapy denials are rising, book a call and we will review a recent remittance with you. Related fields include orthopedic billing and pain management billing, and you can see every field on the specialties hub.