Introduction
If you’ve ever been to an occupational therapist (OT) or a physical therapist (PT), you might have noticed how structured their sessions are. Every minute counts. That’s because therapy clinics bill insurance companies based on time and specific services provided. But have you ever wondered how they calculate these charges?
That’s where billing units come in. Billing units determine how much a therapist gets reimbursed for their services. If they don’t bill correctly, they could lose money—or worse, face claim denials. That’s why understanding occupational therapy billing units, physical therapy billing services, and ot billing units is so important for therapists, clinics, and even patients.
In this guide, we’ll break down how billing units work, the key differences between OT and PT billing, and how you can avoid common mistakes. Let’s dive in!
Section 1: Understanding Billing Units in Therapy Services
What Are Billing Units?
Billing units refer to the way therapy services are recorded and billed to insurance providers. They are based on the amount of time a therapist spends with a patient and the type of treatment provided.
For both OT and PT, the Current Procedural Terminology (CPT) codes determine what services are billable. These codes are standardized across the U.S. and help insurance companies understand what treatments were given.
How Insurance Impacts Billing Units
Billing units aren’t just about time—they’re also influenced by who’s paying the bill. Different insurance providers, including Medicare, Medicaid, and private insurers, have their own rules. For example:
- Medicare follows the 8-minute rule, which we’ll cover next.
- Private insurance may have stricter guidelines on what can be billed.
- Medicaid varies by state, sometimes requiring prior authorization.
Understanding these rules ensures that therapists get paid correctly for their work and that patients receive the care they need without billing surprises.
Timed vs. Untimed Codes
One critical part of therapy billing is knowing the difference between timed and untimed codes.
- Timed codes depend on how long the therapist spends with the patient.
- Untimed codes are fixed amounts, meaning they’re billed as one unit regardless of time spent.
Now, let’s look at the 8-minute rule, which plays a big role in timed codes.
Section 2: The 8-Minute Rule – How It Affects Billing
What Is the 8-Minute Rule?
The 8-minute rule is a Medicare guideline that helps determine how many billing units can be charged based on therapy time. It applies to timed CPT codes only. If a therapist spends at least 8 minutes on a service, they can bill for one unit.
How to Apply the 8-Minute Rule
To calculate billing units correctly, follow this breakdown:
- 8–22 minutes = 1 unit
- 23–37 minutes = 2 units
- 38–52 minutes = 3 units
- 53–67 minutes = 4 units
If a therapist provides multiple services, the total minutes are combined before determining the number of units. For example:
- 12 minutes of manual therapy + 15 minutes of therapeutic exercise = 27 minutes (2 units).
How It Differs Between OT and PT
- Occupational therapists often provide activities of daily living (ADL) training, which includes a mix of timed and untimed codes.
- Physical therapists primarily bill for rehabilitation exercises, which mostly use timed codes and rely heavily on the 8-minute rule.
Understanding this difference ensures correct billing and helps avoid denied claims.
Section 3: Timed vs. Untimed Codes in Occupational Therapy and Physical Therapy
Timed Codes
Timed CPT codes require therapists to work one-on-one with a patient. These codes are used in both OT and PT.
Common Timed Codes:
- 97110 – Therapeutic exercise (PT & OT)
- 97112 – Neuromuscular re-education (PT & OT)
- 97530 – Therapeutic activities (OT-specific)
- 97140 – Manual therapy (PT-specific)
Example of Timed Code Billing:
- A PT provides 24 minutes of therapeutic exercise (97110) and 10 minutes of manual therapy (97140).
- Total treatment time = 34 minutes → 2 billing units.
Untimed Codes
Untimed codes do not depend on how long a therapist spends with a patient. They are billed as one unit per session, no matter the duration.
Common Untimed Codes:
- 97161-97163 – PT evaluations
- 97165-97167 – OT evaluations
- 97597 – Wound care
Since untimed codes don’t follow the 8-minute rule, they simplify billing but must be used correctly to avoid claim denials.
Section 4: Key Differences in Billing Units for OT vs. PT
| Aspect | Occupational Therapy (OT) | Physical Therapy (PT) |
| Primary Focus | Helps patients regain daily living skills | Improves movement, strength, and function |
| Billing Units | Uses a mix of timed and untimed codes | Primarily timed codes |
| Common CPT Codes | ADLs training, splinting, sensory integration | Manual therapy, gait training, therapeutic exercise |
| Medicare Rules | Often uses 8-minute rule and untimed evaluations | Heavily relies on the 8-minute rule |
Section 5: Common Billing Mistakes & How to Avoid Them
- Misunderstanding the 8-minute rule – Incorrect unit calculations.
- Overbilling or underbilling – Leading to claim denials or revenue loss.
- Incorrect use of modifiers – Examples of KX, GP, GO modifiers and when to use them.
- Not documenting correctly – Importance of keeping detailed patient records.
- Billing the wrong CPT codes – Choosing the right codes for the therapy provided.
Section 6: Best Practices for Accurate Billing in OT & PT
- Use electronic billing systems to reduce errors.
- Stay updated on insurance and Medicare policies.
- Regularly train staff on CPT coding and billing compliance.
- Conduct internal audits to catch billing mistakes before submission.
- Work with physical therapy billing services to ensure accuracy.
Conclusion
Billing for therapy services isn’t just about counting minutes—it’s about understanding the rules that govern occupational therapy billing units and physical therapy billing services. The 8-minute rule, timed vs. untimed codes, and insurance policies all play a major role in how clinics get reimbursed.
By mastering these concepts, therapists can reduce claim denials, improve cash flow, and ensure patients receive uninterrupted care. If you have any questions, drop a comment below! We’d love to help you better understand OT and PT billing units.
