As a Medicare beneficiary, you might not care much about CPT codes and how medical billing works. However, a good understanding of how healthcare providers bill their services to Medicare can help ensure you pay the proper amount for your treatments.
This is especially true when receiving physical therapy or other one-on-one services. Many physical therapists are not experts at medical billing, especially regarding Medicare coverage so that errors can occur.
The 8-minute rule is essential when these providers render treatment and bill Medicare for that treatment. So, just what is the 8-minute rule, and how does it work? Keep reading as we tell you everything you need to know about it.
What Is Medicare’s 8-Minute Rule?
The 8-minute rule sets the standard for recording and billing time-based CPT codes for outpatient services such as physical therapy.
These timed codes allow the practitioner to bill Medicare based on the time spent performing the service on the patient. For each 15-minute treatment increment, the provider may bill Medicare for one billable unit. The total number of units billed to Medicare depends on the overall length of the treatment.
- The 8-minute rule is significant because the treatment must last at least 8 minutes for the provider to bill a treatment unit to Medicare.
So, Medicare would be billed for one treatment unit between 8 minutes and 22 minutes. From 23 minutes to 37 minutes, the provider could bill two units. Remember that this rule only applies to time-based CPT codes. This means the provider provides one-on-one service to only one patient during that time.
- This rule applies to most outpatient service providers who accept Medicare, such as skilled nursing facilities, rehabilitation facilities, private practice physical therapists, and hospital outpatient departments.
It also applies to nearly all Federally Funded programs, including Medicaid services. Though many differences exist between Medicare and Medicaid, the 8-minute rule applies to both programs. The Centers for Medicare and Medicaid Services publishes instructions for reporting service units. In addition, many private insurance plans also follow the 8-minute rule.
KEY TAKEAWAYS
- Under the Medicare 8-minute rule, a treatment must last at least 8 minutes for the provider to bill a treatment unit to Medicare.
- Medicare’s 8-minutes rule does not apply to service-based codes, only to time-based codes.
- Depending on the services received, a Medicare health provider may bill Medicare for service-based and time-based procedures during the same visit.
What Are Service-Based Codes?
The American Medical Association (AMA) publishes its list of codes, along with descriptions and details about each. Service-based codes do not depend on the amount of time spent on the service. These are untimed codes billed as one unit, regardless of the service’s length.
For instance, a physical evaluation or the application of a cold pack would be billed as one unit. Many services billed as service-based codes can be performed unattended and do not require direct contact with the patient.
If the service is performed virtually, it would automatically need to follow a service-based code. Time-based codes must be done in person. Similarly, activities that do not require the provider’s one-on-one attention would be service-based.
Unattended electrical stimulation, for example, would be another type of activity coded using a service-based code. You cannot bill more than one unit at a time for these services, regardless of the total time spent performing the activity.
What Are Time-Based Codes?
Time-based codes are essentially the polar opposite of service-based codes. Time-based codes are billed to Medicare in units, according to the total amount of time spent with the patient. These are billed in 15-minute increments, with one unit equal to one 15-minute increment.
There are a few rules when it comes to billing time-based codes. First, the provider must have direct contact with the patient, and the service must be a one-on-one, constant attendance procedure. This includes modalities such as gait training, manual therapy, therapeutic exercise, other therapeutic activity, neuromuscular re-education, ultrasound, and attended electrical stimulation.
So, for every 15 minutes of service provided, your provider is allowed to bill one unit to Medicare. If at least eight minutes are left over, an additional unit can be billed.
For example, after the first 15 minutes of service, there are only 7 minutes left over for 22 minutes of service, which would only allow one unit of service to be billed. However, if the service lasted 23 minutes, then there would be 8 minutes left over after the first 15-minute increment, which would allow an additional unit to be billed, so the provider would be able to bill Medicare for two units of that particular service.
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Service-Based Units vs. Time-Based Units
Now that you know what each of these means, let’s examine how they can interact. The total number of billable units depends on the specific treatments performed on the patient and can involve both service-based and time-based units.
We will examine more specific examples later in this article. However, know that the total units billed do not always correlate with the number of minutes spent with the patient. In some cases, the provider might perform multiple services that are billed to different codes. They may provide a certain number of minutes of treatment in addition to applying a cold pack.
In that example, the provider would be able to bill Medicare for the time-based treatment according to its duration. The cold pack application could only be billed at one unit because service-based units can never be billed in multiple increments for the same treatment.
Strategies For Calculating Billable Units
You probably know by now that physical therapy billing can get quite complex, especially when multiple treatments are involved during the same visit. Some therapy services are billed based on the treatment time, while others are billed for one unit regardless of the time it takes.
Service-based CPT codes are a little easier to determine. The billing guidelines only allow for one unit of a service-based code on the date of service. The provider can never bill for multiple units of the same code during the same visit, so correctly billing the service-based codes is not extremely difficult.
However, time-based codes can get a little more complex. Timed CPT codes are generally harder to track and bill. It requires precisely tracking the time spent on that particular service and then using the 8-minute rule to determine how many units to bill. Here is how to do that.
- First, take the total number of minutes spent on the service and divide that number by 15. This will give you the minimum number of billing units you can bill.
- Then, look at the leftover minutes after you complete the division. You cannot bill anything additional if there are seven or fewer leftover minutes.
- However, if there are eight or more leftover minutes, then you can bill an additional unit for the service that was completed.
For example, if you complete 32 minutes of ultrasound, you will have two billable units with two leftover minutes. Since you have fewer than eight minutes left, you cannot bill for an additional service unit. Leftover minutes from multiple services are called a mixed remainder. In the next section, we will discuss how to handle this situation in the examples.
TIP
It is helpful to understand how your healthcare provider should bill Medicare so that you can ensure you are billed properly and don’t end up paying extra out-of-pocket.
8-Minute Rule Scenarios
So, now that you know what the 8-minute rule is, it can often be helpful to take a look at real examples to see how it works in practice. Here are a few examples to help explain some fairly common situations that you may encounter. While some of these examples may differ slightly depending on the payer, we will explore how these would commonly be handled by Medicare.
The Bottom Line
The 8-minute rule informs outpatient service providers, particularly physical therapists, about billing for time-based services. The billing must correlate with the total time spent on the treatment.
The treatment must include direct contact with the patient and be conducted one-on-one with constant attendance.
Things can get a little tricky when billing both timed and untimed codes during the same therapy session. Remember to follow your billing guidelines, as failure to bill Medicare appropriately could result in improper reimbursement.
Frequently Asked Questions
The 8-minute rule was first introduced in December of 1999. It took effect on April 1, 2000. You might also hear this rule called the “rule of eights.”
It governs how certain service providers must bill their time with patients to Medicare and other Federally-funded health care programs. To qualify for one billable unit, the provider must spend at least eight minutes in direct contact, one-on-one treatment with the patient.
Medicare is one of the largest insurances that follow the 8-minute rule. In addition, nearly all Federally-funded insurance programs follow this rule. This includes Medicaid, TRICARE, and CHAMPUS. While not all private insurance companies follow this rule, many of them do.
You would need to check your coverage details with your insurance company to determine whether they follow the 8-minute rule. It has become somewhat of an industry standard when it comes to billing outpatient services, so you are likely to find that your insurance follows the rule as well.
Remember that Medicare Advantage plans are managed and administered by private insurance companies. While Medicare requires certain health care providers to follow the 8-minute rule, not all Medicare Advantage plans have this same requirement.
Whether or not your Medicare Advantage plan requires providers to follow the rule depends on the specifics of your particular plan. You will find that many Medicare Advantage plans do require their providers to follow the 8-minute rule, while there are some plans out there that do not have this requirement.
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