5 Billing & Coding Strategies to Improve Reimbursement

Question:  Dr. Kotlar, “I am seeing more patients this year compared to last year, but I’m not collecting more money. I’ve been documenting the same way for the last 8 years, and I think my recordkeeping, coding, and collection systems are outdated. Can you share some tips to help me improve?”

Answer:  Yes, here are 5 ways to improve coding, compliance, and reimbursement:

  1. Billing

Most insurance carriers cover physical therapy evaluations, CPT codes 97161, 97162, 97163, and physical therapy re-evaluations, CPT code 97164. Also, typically insurance reimbursable are modalities such as mechanical traction (97012), unattended electrical stimulation (97014/G0283), ultrasound (97035), and therapeutic procedures such as therapeutic exercises (97110), manual therapy (97140), and therapeutic activities (97530).

  1. Good Financial Policies

Have a good financial policy in place for insurance, personal injury, and cash patients.  For insurance reimbursement, call to verify coverage prior to submitting bills. Some insurance plans (in and out of network) have high deductibles, so even if physical therapy is covered, it may take 5–15 visits to get past the deductible. For patients with high deductibles or if you’re out-of-network with a plan that only covers in-network providers, offer an affordable, good quality cash plan. Whether you like it or not, most patients that enter your office have some sort of insurance that covers physical therapy.

Situation:  You’re a cash practice and non-par with all insurance plans including Medicare.

Question:  What do you give patients that want to get reimbursed by their insurance company?


  • Have patients sign a form acknowledging that certain portions of their care may not be covered by insurance.
  • Patients must understand and agree to pay for all services and products at the time the services or products are provided.
  • Give patients ample opportunity to ask questions about their financial obligation, other treatment options, and right to refuse care.
  • Use standard CPT codes, such as 97012, 97110, 97140, for medically necessary services and insurance billing. CPT codes are not needed if a cash patient needs a simple walk-out receipt.
  • For wellness/maintenance examinations, consider using ICD-10 code Z00.00 (encounter for general adult examination without abnormal findings).
  • For wellness/maintenance care, consider using HCPCS code S8990 (manipulative therapy performed for maintenance rather than restoration). Do notuse S8990 for Medicare claims.

  1. Use Appropriate Diagnosis Codes

If clinically applicable and justified in your documentation, use longer term diagnosis codes such as disc herniation, sciatica, cervical radiculopathy, ligament sprain, etc. as your primary codes followed by pain, stiffness, and spasm. I also recommend using complicating factor diagnosis codes to paint the most compliant patient clinical picture. Examples includechronic fatigue syndrome (R53.82), diabetic neuropathy (E08.40), pins and needles (R20.2), anxiety/depression (F41.8), and dizziness (R42).

  1. Avoid Denials

Make sure you know what constitutes “medical necessity.” According to the CMS, medical necessity is a service, treatment, procedure, equipment, or supply provided by a physician or other health care provider that is required to identify or treat a patient’s illness or injury and which is:

  1. Consistent with the symptom(s) or diagnosis and treatment of the patient’s illness or injury;
  2. Appropriate under the standards of acceptable practice to treat that illness or injury;
  3. Not solely for the convenience of the participant, physician, or other health care provider; and
  4. The most appropriate service, treatment, procedure, equipment, or supply which can be safely provided to the patient and accomplishes the desired end result in the most economical manner.

If you’re getting denials based on the patient reaching maximal medical improvement, use good “fight-back” letters. You should respond and appeal improper denials, especially on medical necessity. Examples of what good appeal letters include are the following:

  • The patient went from being in pain 80% of the day to only 30% within the first month of care.
  • Pain levels went from 9/10 to 5/10 over a 30-day period.
  • Bending and lifting abilities improved approximately 30% over the past 6 weeks of care.
  • Lumbar flexion range of motion went from 40/90 with pain to 65/90 without pain.
  • The patient needed pain medication due to the exacerbations of joint pain and discomfort. Part of the care provided in this office was to try and help the patient reduce the amount of medication taken. The patient reported that due to the care in this office he/she now takes less medication.
  • Use scores and grading scales to prove care was beneficial.
  • Use orthopedic/neurological tests, pain questionnaires, and outcome assessment tools.
  • Include radiology results, MRI findings, and any other diagnostic test results to the patient records and try to connect those findings to the patient’s signs and symptoms or to the inability to perform certain normal daily activities of living. Example, at the present time, due to the patients radiating pain, numbness, and stiffness in his right leg, which stems from a herniated disc in his low back, he cannot play on the floor with his children and cannot put on his socks and shoes without assistance.

Use the following for Medicare:

  • STOP treating Medicare patients if you are NOT submitting claims to Medicare.
  • STOP treating Medicare patients if you are NOT enrolled in Medicare.
  • DO NOT confuse Non-Par with Opt-Out.
  • If you want to treat Medicare patients, YOU MUST submit claims to Medicare.
  • If you do not want to submit Medicare claims, refer the patient to another physical therapist that is enrolled in Medicare.
  • You do not have to accept assignment on secondary/supplemental plans (unless under contract).
  • Medicare strongly suggests that providers get Proactive. This means having a formal billing and coding compliance manual with written policies and procedures. If you’d like to see a copy of our Physical Therapy OIG Compliance Plan, send an email to info@targetcoding.com.

  1. Documentation

Create a plan of care for every patient. Make sure functional improvement is evident in chart notes. Do re-evaluations to establish medical necessity and conversion to wellness/maintenance care. Have a HIPAA Notice of Privacy Practices form filled out on every patient. Email info@targetcoding.com for a sample HIPAA notice form. For minors, have a consent to treat minor form on file.

Address the following to ensure documentation compliance:

  • Make sure your notes are legible.
  • Document progress towards goals.
  • Provide planned re-evaluations.
  • Have a valid signature that services were performed.
  • Document time spent in therapy and for each exercise.
  • Supply worksheets indicating the specific exercises done.

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If you don’t know who your Account Manager is, please call 866.528.2144 to find out.

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