As a Medicare beneficiary, you might not care much about CPT codes and how medical billing works. However, having a good understanding of how health care providers bill their services to Medicare can help you make sure you are paying 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 when it comes to Medicare coverage, so you will find that errors can occur. The 8-minute rule is extremely important 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 how time-based CPT codes should be recorded and billed for outpatient services, like physical therapy. These timed codes allow the practitioner to bill Medicare based on the amount of time spent performing the service on the patient. For each 15-minute increment of treatment, 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.
Here is what is significant about the 8-minute rule. The rule states that the treatment must last at least 8 minutes for the provider to bill a unit of treatment to Medicare. So, for treatment between 8 minutes and 22 minutes, Medicare would be billed for one unit of treatment. 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 that the provider is providing 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, hospital outpatient departments, and others. The rule also applies to nearly all Federally-funded programs, including Medicaid services. Though there are many differences between Medicare and Medicaid, the 8-minute rule applies to both programs. In fact, 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.
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 are those codes that do not depend on the amount of time spent on the service. These are untimed codes that are billed as one unit, regardless of how long the service takes. For instance, a physical evaluation or the application of a cold pack would be billed as one unit. Many of the services that are billed as service-based codes can be performed unattended and do not require direct contact with the patient.
If the service is performed virtually, then 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 one-on-one attention of the provider would be service-based. Unattended electrical stimulation, for example, would be another type of activity that would be coded using a service-based code. For these services, you cannot bill more than one unit at a time, 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 being equal to one 15-minute increment of time. 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 there are at least eight minutes left over, then an additional unit can be billed. For example, for 22 minutes of service, there are only 7 minutes left over after the first 15-minute increment. This 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. This would allow an additional unit to be billed, so the provider would be able to bill Medicare for two units of that particular service.
Service-Based Units vs. Time-Based Units
Now that you know what each of these means, let’s take a look at how they can interact with each other. The total number of billable units depends on the specific treatments performed on the patient, and it can involve both service-based and time-based units. We will take a look at 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 be performing multiple services that are billed to different codes. They may provide a certain number of minutes of treatment in addition to the application of a cold pack.
In that example, the provider would be able to bill Medicare for the time-based treatment according to how long the treatment lasted. The application of the cold pack 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 amount of 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 amount of 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 that you can bill. Then, take a look at the leftover minutes after you complete the division. If there are seven or fewer leftover minutes, then you cannot bill anything additional. 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, then you would have two billable units with two leftover minutes. Since you have fewer than eight leftover minutes, you cannot bill for an additional unit of the service. When you have leftover minutes from multiple services, this is called a mixed remainder. We will discuss how to handle this situation in the examples in the next section.
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.
- Example 1. Physical Therapy Evaluation Plus 15 Minutes Of Manual Therapy
We will start with an easy example. Let’s imagine that a patient visits a physical therapist for an evaluation. While there, the patient also receives 15 minutes of therapeutic exercise or manual therapy after the evaluation. In this case, Medicare could be billed two units. The fifteen minutes of therapy would allow for one billable unit. Since an evaluation is a service-based code, only one billable unit would be allowed regardless of how long the evaluation took. So, even if the evaluation lasted 45 minutes, the therapist would only be able to bill Medicare for two units for the entire visit – one unit for the evaluation and one unit for the 15 minutes of therapy.
- Example 2. Mixed Remainders
This example shows how things can start to get a little more complex. A mixed remainder occurs when you have leftover minutes from more than one service. For example, suppose that you receive 20 minutes of manual therapy and 19 minutes of ultrasound. You should immediately see that you can bill two units to Medicare. One billable unit would be for the manual therapy with five leftover minutes, and another billable unit exists for the ultrasound with four leftover minutes. There are now a total of nine leftover minutes, but they are spread across two different services. Neither is enough for an additional billable unit on its own. So, how is this handled?
According to most billing rules, you would be entitled to bill an additional unit of a treatment since the total leftover minutes exceed eight. It is generally agreed that you bill the additional unit to the service with the most leftover minutes. So, in this example, you would bill an additional unit to manual therapy. This means that a total of three units would be billed – two to manual therapy and one to ultrasound.
- Example 3. 20 Minutes Manual Therapy Plus 7 Minutes Self Care Education
So, what happens if one service does not meet the 8-minute rule? Can you still include that service when calculating the remainder? The answer is yes. In this example, you could bill for one unit of manual therapy. This leaves you with five leftover minutes. You can then add the seven minutes of self-care education which gives you a total of 12 leftover minutes. Since self-care education is the service with the most leftover minutes, then you would bill the additional unit to this service. This example would result in one unit billed to manual therapy plus one unit billed to self-care education.
The Bottom Line
The 8-minute rule provides details to outpatient service providers, particularly physical therapists, about how time-based services must be billed. The billing must correlate with the total timed minutes spent on the treatment. The treatment must include direct contact with the patient, and it must be conducted in a one-on-one manner 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
When did the 8-minute rule start?
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.
Which insurances follow the 8-minute rule?
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.
Does Medicare Advantage follow the 8-minute rule?
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.