How Is Physical Therapy Billed and What to Expect

Physical therapy billing can seem complicated, often differing from billing for other medical services. Understanding the details of how physical therapy is billed is helpful for patients, as it clarifies the charges they receive and how their insurance coverage applies.

Key Elements of a Physical Therapy Bill

A physical therapy bill itemizes the services provided using specific codes and units. These codes standardize the description of treatments, evaluations, and other procedures, allowing for consistent communication between providers and insurance companies.

Current Procedural Terminology (CPT) codes are central to physical therapy billing, identifying the distinct services rendered. For instance, CPT code 97110 represents therapeutic exercises designed to improve strength, endurance, flexibility, or range of motion in one or more body parts. Another common code, 97140, is used for manual therapy techniques, which involve hands-on procedures like mobilization, manipulation, or manual traction applied to specific body regions. Physical therapy evaluations are also coded, with 97161 for low complexity, 97162 for moderate complexity, and 97163 for high complexity, reflecting the varying levels of assessment required for a patient’s condition.

Many physical therapy services are billed in units, often corresponding to 15-minute increments of direct patient contact. This means that the total charge for a service like therapeutic exercise or manual therapy is determined by the number of units provided during a session.

Modifiers are two-digit codes appended to CPT codes to provide additional information about a service without changing its fundamental definition. Modifier 59, for example, indicates that a procedure or service was distinct or independent from other services performed on the same day.

Diagnosis codes, known as ICD-10 codes, are also included on a physical therapy bill. These codes specify the patient’s medical condition or injury, providing the medical necessity for the services rendered. An ICD-10 code, such as S43 (dislocation and sprain of joints and ligaments of the shoulder girdle), justifies why the physical therapy treatment is necessary.

Insurance Coverage and Payment Mechanisms

Insurance plans play a significant role in determining how much a patient pays for physical therapy. Understanding how different insurance terms apply to physical therapy services clarifies a patient’s financial responsibility.

A deductible is the amount a patient must pay out-of-pocket for covered healthcare services before their insurance plan begins to pay. For physical therapy, this means patients typically pay the full cost of sessions until they meet their annual deductible. Once the deductible is satisfied, other payment structures, such as co-payments or co-insurance, usually come into effect.

A co-payment, or co-pay, is a fixed amount a patient pays for each physical therapy session at the time of service. This amount is determined by the insurance plan and can vary based on the type of service received.

Co-insurance is a percentage of the cost of a healthcare service that a patient is responsible for paying after their deductible has been met. For example, if a plan has an 80/20 co-insurance, the insurance covers 80% of the allowed amount, and the patient pays the remaining 20%.

An out-of-pocket maximum is the most a patient will have to pay for covered services in a plan year. Once this limit is reached, the insurance plan typically pays 100% of the cost for covered benefits for the remainder of the year.

Some insurance plans require prior authorization or a referral before physical therapy services are covered. Prior authorization is an approval from the insurance company that services are medically necessary and will be covered. Without prior authorization, the patient may be responsible for the full cost of services. Referrals, typically from a physician, may also be required by some insurance plans, even if state laws allow direct access to physical therapy without one.

The distinction between in-network and out-of-network providers also impacts coverage. In-network providers have contracts with insurance companies to provide services at pre-negotiated rates, generally resulting in lower out-of-pocket costs for patients. Out-of-network providers do not have such agreements, meaning patients might pay more per session or a higher percentage of the cost, often paying the provider directly and seeking partial reimbursement from their insurer.

Understanding Your Explanation of Benefits

An Explanation of Benefits (EOB) is a document sent by an insurance company after a healthcare claim has been processed. It details how the insurance plan has covered the services received and is not a bill from the provider. Reviewing an EOB is important for understanding how charges were processed and what amount, if any, remains the patient’s responsibility.

The EOB typically includes information about the healthcare provider, such as the physical therapy clinic’s name and address. It also lists the dates services were rendered, along with the CPT codes that correspond to each service.

A key section of the EOB is the “Amount Billed,” which shows the total charge submitted by the physical therapy provider for the services. Adjacent to this, the “Allowed Amount” indicates the maximum amount the insurance company agrees to pay for those services.

The EOB further details how the patient’s financial responsibilities are applied. It will show any portion of the cost that was “Applied to Deductible,” indicating how much of the billed amount went towards meeting the patient’s annual deductible. Following this, the document specifies the co-pay or co-insurance amounts, which are the patient’s fixed payment or percentage responsibility after the deductible has been met.

The “Amount Paid by Insurance” section displays the sum the insurance company has paid directly to the provider. Finally, the “Patient Responsibility” amount is clearly stated, representing the remaining balance the patient owes after insurance processing. If a claim was denied or adjusted, the EOB will also include codes or explanations detailing the reasons for these actions.

Managing Out-of-Pocket Costs

Patients have several strategies to manage their out-of-pocket costs for physical therapy. Proactive communication and careful review of billing documents are important steps in controlling healthcare expenses.

Before starting treatment, patients should inquire about costs, verify their insurance coverage, and understand the clinic’s billing practices. Asking about the estimated number of visits and the associated costs can help patients plan their finances.

Upon receiving a bill from the physical therapy provider, it is advisable to compare it against the Explanation of Benefits (EOB) received from the insurance company. This comparison helps ensure that the services billed match those on the EOB and that the patient responsibility aligns with the insurance’s determination. Any discrepancies should be questioned promptly.

Many physical therapy clinics offer various payment options to help patients manage their financial obligations. These can include payment plans that allow patients to spread out the cost of treatment over time, or financial assistance programs based on income. Some providers also offer discounts for patients who choose to pay for services in cash. Health Savings Accounts (HSAs) and Flexible Spending Accounts (FSAs) are additional tools that allow individuals to use pre-tax dollars for medical expenses, including physical therapy.

If a patient believes there is an error on their bill or EOB, they have the right to dispute it. This typically involves contacting the provider’s billing department and, if necessary, the insurance company. Providing clear documentation and a detailed explanation of the perceived error can facilitate the resolution process. The No Surprises Act, a federal law, also offers protections against unexpected medical bills, particularly for out-of-network services, by requiring providers to give patients a good faith estimate of costs before services are rendered.