Physical Therapy Billing: Process, Documentation and Follow-Up

Physical therapy billing is the process of turning documented treatment into a claim, tracking the payer’s response, and following up on payment or denial. This guide walks through patient information, documentation and coding, claim submission, adjudication, and payment follow-up. Start with the workflow below, then use the linked resources for Medicare timed units, denial-code explanations, and billing costs. Looking for billing support rather than a process guide? See our physical therapy billing services and compare billing service costs.

In this guide: Billing workflow · CPT codes & timed units · Modifiers (GP, KX, CQ, 59) · Medicare enrollment & revalidation · Substitute PT billing (Q5/Q6) · MPPR, PTA rate & telehealth · Medicare documentation checklist · Diagnosis codes, filing limits & group therapy · Billing software · In-house vs. outsourced billing · Next billing resources

How Physical Therapy Billing Works: Five Steps

Physical therapy billing involves the submission of claims to insurance companies or other payers to receive payment for services provided. The process typically includes the following steps:

Patient Registration and Insurance Verification

This initial step involves collecting accurate patient information and verifying insurance coverage. For Original Medicare, keep the eligibility response with the date of the inquiry and the requested date of service. CMS explains that HETS eligibility data is accurate only at the time of the transaction and that a 271 response is not a guarantee of payment. Direct Medicare Advantage benefit questions to the plan identified in the response, rather than assuming that Medicare Part A or Part B eligibility establishes that plan’s benefits. See CMS HETS eligibility guidance (May 2026, disclosure statement and page 2). It is crucial to ensure that patients’ insurance details are up to date and accurately recorded to avoid potential claim denials.

Documentation and Coding:

Match the billed services and units to the treatment record rather than relying on software suggestions alone. For Medicare outpatient therapy, CMS requires documentation of both timed-code treatment minutes and total treatment time, including timed and untimed services. Do not count untimed-service minutes toward timed-code units. See the CMS outpatient rehabilitation documentation guidance (pages 3, 6 and 7). Use our Medicare 8-minute rule calculator as a calculation aid, not a replacement for the treatment record or the applicable payer policy.

Also Read: 10 Reasons Why Your Physical Therapy Insurance Claims Will Get Denied

Claim Submission:

Before transmitting a claim, confirm the billing provider type, payer requirements and required claim format. For Medicare, CMS identifies 837P as the electronic format for health care professionals and suppliers, and 837I as the electronic format for institutional providers. The corresponding paper forms are CMS-1500 and CMS-1450 (UB-04); Medicare paper submission is subject to applicable Administrative Simplification Compliance Act (ASCA) exceptions. See CMS professional billing guidance and CMS institutional billing guidance (December 2025, page 3). Do not assume that every physical therapy claim uses the same format; confirm the applicable provider and payer instructions before submission.

Claims Adjudication:

The insurance company reviews the claim, verifies the information, and determines the amount of reimbursement. This process can involve various stages, including claim edits, eligibility verification, and medical necessity review.

Payment and Denial Management:

Separate a rejected claim from a denied claim. For Original Medicare electronic claims, CMS describes front-end checks that can reject a batch or an individual claim for correction and resubmission. Later coverage and payment-policy edits can result in a rejection or a denial. Read the actual response before choosing the next step; a transmission acknowledgment is not a payment decision. See CMS: How Electronic Claims Submission Works.

Reconcile the remittance with the submitted claim. Medicare remittance advice reports adjudication and payment information, including the reason and value of adjustments. Review the claim adjustment group code, claim adjustment reason code (CARC), and any remittance advice remark code (RARC) together. See CMS remittance advice guidance and our physical therapy denial-code guide.

Choose the payer-specific follow-up. Before correcting, resubmitting or appealing, check the payer’s instructions and applicable deadline against the actual response and supporting records. Do not automatically resubmit every denied claim. Keep the claim, acknowledgment, remittance and follow-up records together; other insurance plans may use different processes.

Common Physical Therapy CPT Codes and Timed Units

Physical therapy claims combine untimed (service-based) codes—which bill 1 unit per date of service regardless of how long they take—and timed (15-minute) CPT codes, which require direct one-on-one contact and documented timed minutes (CMS Medicare Claims Processing Manual, Pub. 100-04, Chapter 5, Section 20.2).

Medicare 8-Minute Rule vs. CPT Midpoint Rule (“Rule of 8s”): Original Medicare adds all timed minutes for the day together to cap total timed units: 8–22 timed minutes = 1 unit, 23–37 minutes = 2 units, 38–52 minutes = 3 units, and 53–67 minutes = 4 units (CMS Pub. 100-04, Ch. 5, Sec. 20.2). Commercial payers that follow the AMA CPT midpoint rule (summarized by APTA) count each timed code on its own, requiring at least 8 minutes of that single code to bill 1 unit. Compare both rules side by side in our 8-minute rule vs. CPT rule of 8s guide and calculator.

Physical Therapy Modifiers: GP, KX, CQ, 59/XU, and GA

Missing or mismatched therapy modifiers cause immediate front-end rejections or post-adjudication denials. Check these five modifiers against the treatment note before submitting a claim:

• GP (Physical Therapy Plan of Care): Required on every “always therapy” code for Original Medicare outpatient physical therapy (CMS Chapter 5, Section 10.4). Claims without GP are returned as unprocessable under CO-4 (CARC 4: procedure code inconsistent with modifier).
• KX (Medical Necessity Threshold Attestation): Required on Original Medicare outpatient therapy claims once a beneficiary’s incurred therapy charges exceed the annual KX threshold—$2,480 in CY 2026 for physical therapy and speech-language pathology combined (with targeted medical review above $3,000). Omitting KX above the threshold triggers a CO-119 benefit maximum denial. Do not append KX routinely when the threshold is not approached (CMS Chapter 5, Section 10.3).
• CQ (Physical Therapist Assistant Services): Paired beside GP when a physical therapist assistant (PTA) independently furnishes more than 10% of a timed or untimed service under the CMS CQ/CO billing examples and Section 20.1 rules. Submitting CQ without GP causes a CO-4 unprocessable return.
• 59 and XU (Distinct Procedural Service — NCCI Edits): Used only when two billed CPT codes hit a National Correct Coding Initiative (NCCI) procedure-to-procedure edit and clinical documentation supports a distinct, separate session or procedure (2026 Medicare NCCI Policy Manual). Compare CO-97 bundled PT codes and CO-236 modifier 59/XU rules.
• GA (Waiver of Liability / ABN on File): Indicates that a required Form CMS-R-131 Advance Beneficiary Notice of Non-coverage (ABN) was issued for Original Medicare therapy expected to be denied as not medically reasonable and necessary (CMS ABN Tutorial). Never use GA and KX together, and see CO-50 medical necessity denials for appeal vs. patient-liability rules.

Medicare Enrollment Comes First: NPI, PECOS, Effective Dates and Revalidation

No claim rule matters until the therapist and the practice are enrolled with the payer. For Original Medicare, enrollment is a defined CMS process with dates that decide which visits can be billed at all. Medicare Advantage and commercial plans run their own credentialing and contracting, so confirm each plan’s requirements with that plan.

• The four CMS steps: get a National Provider Identifier (NPI) through NPPES, complete the Medicare enrollment application in PECOS (the online Medicare enrollment system), pay the application fee if one applies, and respond to requests from your Medicare Administrative Contractor (MAC) while it processes the application.
• Forms and fees: CMS says PECOS applications tend to process faster than paper. The paper equivalents are the CMS-855I for physicians and non-physician practitioners and the CMS-855B for clinics, group practices and certain other suppliers, usually with the CMS-588 electronic funds transfer agreement. The CMS application fee matrix lists no application fee for non-physician practitioners, for clinics and group practices, or for outpatient physical therapy providers that enroll on the CMS-855B. Outpatient therapy providers that enroll on the CMS-855A do pay the fee for initial enrollment, revalidation and an added practice location.
• Effective date of billing privileges: for physical therapists, 42 CFR 424.520(d) sets the effective date as the later of the date the approved application was filed or the date the therapist first began furnishing services at a new practice location. Under 42 CFR 424.521(a), a therapist who has met all program requirements may bill retrospectively for services at the enrolled practice location for up to 30 days before the effective date if circumstances precluded enrolling in advance (90 days when a Presidentially declared disaster did). Visits earlier than that are not billable to Medicare, so file before a new therapist or a new location starts seeing Medicare patients.
• Physical therapists cannot opt out: CMS lists physical therapists, occupational therapists and qualified speech-language pathologists among the providers not eligible to opt out of Medicare, so the private-contract route that physicians can use is not available to a PT.
• Reporting changes: report a change in ownership, an adverse legal action or a change in practice location within 30 days, and all other changes within 90 days. CMS gives these deadlines as the way to avoid having billing privileges revoked.
• Revalidation: providers and suppliers other than DMEPOS suppliers generally revalidate every five years, and CMS can request an off-cycle revalidation. Due dates are posted on the Medicare Revalidation List seven months ahead, and the MAC sends a notice about three to four months before the due date. CMS grants no extensions. Missing the date can lead to a payment hold or deactivation, and Medicare will not reimburse services furnished while billing privileges are deactivated.

Sources: CMS, Become a Medicare Provider or Supplier, Enrollment Applications and Manage Your Enrollment (both last modified March 4, 2026), Revalidations (last modified July 29, 2025) and the Application Fee Matrix (PDF); 42 CFR 424.520 and 42 CFR 424.521. Checked November 9, 2026.

Covering for an Absent PT: Medicare Substitute Billing (Formerly Locum Tenens), Q5 and Q6

When a therapist is out sick, on leave or on vacation, Original Medicare lets the regular physical therapist bill for a substitute therapist’s visits only in limited circumstances. CMS no longer uses “locum tenens” for one arrangement. Its claims manual describes two: reciprocal billing arrangements and fee-for-time compensation arrangements. Commercial plans and Medicare Advantage plans set their own rules for covering therapists, so check each plan.

• Where it applies to PTs: since June 13, 2017, under section 16006 of the 21st Century Cures Act, a Medicare-enrolled physical therapist may use a substitute physical therapist only for outpatient physical therapy services furnished in a health professional shortage area (HPSA), a medically underserved area (MUA) or a rural area. The manual defines a PT’s “covered visit service” as outpatient physical therapy furnished in one of those areas. HRSA designates HPSAs and MUAs. CMS treats an area as rural if it is not designated urban in the county-to-CBSA crosswalk in the current Inpatient Prospective Payment System final rule.
• Two arrangements, two modifiers: use Q5 when another therapist covers on an occasional reciprocal basis. Use Q6 when the regular therapist pays the substitute on a per diem or similar fee-for-time basis. The modifier goes after the procedure code in item 24D of the CMS-1500.
• Conditions for both: the regular therapist is unavailable, the Medicare patient has arranged or seeks to receive the services from the regular therapist, and the substitute does not provide the services to Medicare patients over a continuous period of longer than 60 days. The one exception to the 60-day limit is a regular therapist called to active duty in the Armed Forces.
• How the 60 days are counted: the period starts on the first day the substitute treats the regular therapist’s Medicare Part B patients and ends on the last day the substitute treats them before the regular therapist returns to work. It keeps running on days when the substitute furnishes no services. In the CMS example, a regular therapist leaves June 30 and returns September 4, and the substitute’s first visit is July 2. The regular therapist can bill the substitute’s services from July 2 through August 30. Services from August 31 through September 2 must be billed in the substitute’s own name and billing number, or by the person or group the substitute reassigns payment to. A new period can begin after the regular therapist has returned to work.
• Records and payment: keep a record of each service the substitute furnished, with the substitute’s NPI, and give it to the Medicare Administrative Contractor (MAC) on request. The MAC sets the payment amount as though the regular therapist furnished the service.
• Group practices: a physical therapy group can bill this way only if the substitute has not reassigned Medicare payment to the group through an approved CMS-855R. The group identifies the regular therapist by NPI in item 24J of the line. Under a fee-for-time arrangement, a group may also bill for a temporary replacement of a therapist who has left the group for up to 60 days.
• The modifier is a certification: entering Q5 or Q6 certifies that the visits are covered visit services furnished by the substitute named in your records. MACs are not required to track the 60 days before paying. CMS says penalties for a false certification may include civil or criminal fraud penalties and revocation of Medicare billing privileges.

Source: CMS, Medicare Claims Processing Manual, Chapter 1 (PDF), sections 30.2.10 and 30.2.11 (Rev. 3774, effective June 13, 2017). Checked November 10, 2026.

Medicare Payment Rules That Change What a PT Claim Pays: MPPR, the PTA Rate and Telehealth

A correctly coded Original Medicare claim can still pay less than the fee schedule amount on every line. Two CMS payment policies explain most of that difference, and two CY 2026 updates affect which remote services a therapist can bill. These are Original Medicare rules; Medicare Advantage and commercial plans set their own policies.

• Multiple procedure payment reduction (MPPR): Medicare applies an MPPR to the practice expense component of certain “always therapy” services. The rate has been 50 percent since April 1, 2013, in both practitioner/office and institutional settings. It applies to the second and subsequent therapy services provided to a patient on the same day: the service with the highest practice expense relative value unit (RVU) is paid at 100 percent, and the practice expense of the remaining services is reduced. When you check an 835 remittance, a lower payment on later same-day therapy lines can be the MPPR at work, so compare it with the CMS MPPR Rate File for the year before treating it as an underpayment.
• PTA payment rate (85 percent): since January 1, 2022, physical therapy services furnished in whole or in part by a physical therapist assistant are paid at 85 percent of the otherwise applicable Physician Fee Schedule amount. Those lines carry the CQ modifier alongside GP.
• When CQ is not required: under the CMS de minimis standard, the portion a PTA furnishes independently of the physical therapist must be reported with CQ only when it exceeds 10 percent of the total service or unit of service. Minutes the PTA and the PT furnish together count as the PT’s. CMS also defines two exceptions. First, when one final 15-minute unit is left to bill and the PT personally furnishes 8 or more minutes of it, that unit is billed without CQ. Second, when two units of the same service remain, the PT and the PTA each furnish between 9 and 14 minutes, and the combined time is at least 23 but no more than 28 minutes, one unit is billed with CQ and one without. Use the 8-minute rule calculator to check the unit count first.
• Telehealth by therapists: section 6209 of the Consolidated Appropriations Act, 2026 extended the ability of PTs, OTs and SLPs to furnish Medicare telehealth services, including the telephone assessment and management codes 98966–98968, through December 31, 2027.
• Remote therapeutic monitoring (RTM): for CY 2026, CMS added three new RTM codes (98979, 98984 and 98985) to its therapy code list as “sometimes therapy” services and revised the descriptors of 98976 and 98977. Check the CMS 2026 Therapy Code List and Dispositions before billing them.

Source: CMS, Therapy Services (CY 2026 Therapy Services Updates; page last modified March 10, 2026).

What Documentation Supports a Medicare Physical Therapy Claim?

For Original Medicare outpatient therapy, review more than the billed code and minutes. CMS identifies missing evaluations, incomplete plans of care, certification problems and incomplete progress reports among common documentation errors. Use this focused checklist alongside the full CMS guidance; it is not a complete coverage checklist or a rule for every payer.

• Initial evaluation: Check that the evaluation includes the clinician’s signature, professional identification and evaluation date.
• Written plan of care: Check for diagnoses, long-term goals, and the type, amount, frequency and duration of therapy. The person who established the plan should sign and date it and include their professional identity.
• Certification and recertification: Verify the applicable physician or non-physician practitioner certification requirements. Do not assume a referral always replaces certification. CMS permits a written order or referral to substitute for the initial plan-of-care signature only under specified conditions; that exception does not apply to recertifications or comprehensive outpatient rehabilitation facilities.
• Progress reports: CMS specifies reports at least once every 10 treatment days, including a signature, professional identification and date. Count treatment days rather than treating this as a 10-calendar-day interval.
• Treatment time: Record both timed-code treatment minutes and total treatment time, including timed and untimed services, to support the units billed. Keep the documentation review separate from the arithmetic in a unit calculator.

Source: CMS, Complying with Outpatient Rehabilitation Therapy Documentation Requirements, September 2025, pages 3–5. If a remittance requests therapy records, use the N900/N901 documentation guidance to distinguish missing from incomplete records and review the payer’s actual request.

When is a Medicare PT re-evaluation separately billable? Routine assessment of progress is part of ongoing therapy, not a separately payable re-evaluation. CMS says a formal re-evaluation is covered only when the documentation supports the need for further tests and measurements after the initial evaluation. Indications include new clinical findings, a significant change in the patient’s condition, or failure to respond to the interventions in the plan of care. A progress-report deadline alone does not establish that need. See the Medicare Benefit Policy Manual, Chapter 15, section 220.3 C. Check other payers’ requirements separately.

Diagnosis Codes, Filing Deadlines and Group Therapy: Three Claim Details to Get Right

How should ICD-10-CM diagnosis codes be listed on a PT claim?

Each physical therapy claim pairs CPT procedure codes with ICD-10-CM diagnosis codes. For a therapy-only outpatient visit, the official guidelines say to “sequence first the diagnosis, condition, problem, or other reason for encounter/visit shown in the medical record to be chiefly responsible for the outpatient services provided during the encounter/visit,” and that “codes for other diagnoses (e.g., chronic conditions) may be sequenced as additional diagnoses.”

• Code coexisting conditions that matter: “Code all documented conditions that coexist at the time of the encounter/visit and that require or affect patient care, treatment or management.”
• Use full specificity: diagnosis codes “are to be used and reported at their highest number of characters available and to the highest level of specificity documented in the medical record.”
• Do not code uncertain diagnoses: the outpatient guidelines say not to code diagnoses documented as “probable,” “suspected” or “rule out”; code the documented signs or symptoms instead.

Source: ICD-10-CM Official Guidelines for Coding and Reporting, FY 2027 (CMS and NCHS; effective October 1, 2026 through September 30, 2027), Sections I.B.2, IV.H, IV.J and IV.L. A diagnosis the notes do not support is a common route to a CO-50 medical necessity denial.

What is the Medicare timely filing limit for physical therapy claims?

For Medicare Part B, federal regulation says the claim “must be filed no later than the close of the period ending 1 calendar year after the date of service.” Limited exceptions exist, such as an error by a Medicare contractor or retroactive Medicare entitlement, and a deadline that falls on a federal nonworkday moves to the next workday (42 CFR 424.44). Commercial and Medicare Advantage plans set their own filing limits in the payer contract, so check each one. A late claim usually comes back as CO-29.

When do you bill group therapy (97150) instead of one-on-one codes?

CMS says group therapy “consists of simultaneous treatment to two or more patients who may or may not be doing the same activities.” If the therapist is dividing attention among patients, giving only brief, intermittent personal contact, or giving the same instructions to two or more patients at the same time, CMS says “it is appropriate to bill each patient one unit of group therapy, 97150 (untimed).” Timed one-on-one codes need direct one-on-one contact, counted under the 8-minute rule.

• Once a day in private practice: “Medicare expects the group therapy code (97150) to be billed only once each day per patient” in PT and OT private practice settings (Scenario 3).
• Same-day group therapy (97150) and one-on-one timed codes: when a patient receives both group therapy (97150) and separate one-on-one timed services (such as 97110 or 97140) on the same date of service, the one-on-one minutes must occur in a separate, non-overlapping time interval and be billed with modifier -59 (or the applicable X subset modifier) to show distinct procedural service (Scenarios 3 and 4).
• Co-treatment unit splitting (PT + OT vs. same discipline): therapists or therapy assistants working together as a team “cannot each bill separately for the same or different service provided at the same time to the same patient.” When a physical therapist and an occupational therapist simultaneously co-treat one patient during the same timed block, they may split the total timed units between the two disciplines (for example, in a 30-minute co-treatment session, the PT bills 1 timed unit and the OT bills 1 timed unit) or one discipline may bill all units while the other bills none; two therapists of the same discipline cannot split or duplicate units for the same interval (Scenarios 6 and 7).
• Co-treatment in a skilled nursing facility, Part A vs. Part B: the unit-splitting rule above is the Part B rule. For a resident in a covered Medicare Part A stay, the facility records therapy minutes on the Minimum Data Set (MDS), and CMS’s MDS manual says that when two clinicians (therapists or therapy assistants), “each from a different discipline, treat one resident at the same time with different treatments, both disciplines may code the treatment session in full.” Co-treatment minutes are entered for each discipline in item O0425. The manual adds that the decision to co-treat “should be made on a case-by-case basis,” that the need for it should be well documented for each patient, and that “its use should be limited.” For Part B, the same manual gives this example: a PT and an OT work together for 30 minutes with one patient on transfer activities. Each could bill one unit of 97530, or either one could bill both units, but not both therapists. Source: CMS, MDS 3.0 RAI User’s Manual, v1.20.11 (effective October 1, 2026), Chapter 3, Section O, pages O-26 and O-38. Checked November 10, 2026.
• Therapy aides and independent exercise are not billable as group or timed therapy: services performed by a therapy aide—even under direct visual supervision—cannot be billed as 97150 or as a skilled timed code, and time a patient spends exercising independently on equipment without skilled therapist intervention is not separately billable (Scenarios 8 and 9).

Source: CMS, 11 Part B Billing Scenarios for PTs and OTs (Scenarios 3, 4, 6, 7, 8 and 9).

The Importance of Digital Billing Solutions

Traditional paper-based billing methods can be time-consuming, prone to errors, and inefficient. Implementing digital billing solutions in physical therapy practices offers several advantages, including:

Streamlined Workflow:

Digital billing solutions automate various aspects of the billing process, eliminating manual tasks and reducing paperwork. This streamlines workflow and allows staff to focus more on patient care rather than administrative tasks.

Improved Accuracy:

Use software checks to flag items for review before claim submission; do not treat a passed software check as proof that the coding is correct or that the claim will be paid. Compare the billed services and units with the treatment documentation and applicable payer requirements.

Electronic Submission and Claim Acknowledgments:

Electronic transmission is not the same as payment approval. For Original Medicare, CMS describes front-end and implementation-guide checks followed by coverage and payment-policy edits; claims can still be rejected or denied. Review the acknowledgment and any error response rather than assuming that sending a claim completes the process. See CMS: How Electronic Claims Submission Works. Other payers may use different workflows.

Enhanced Documentation and Audit Trail:

When evaluating a billing system, check how staff retrieve treatment records, track changes, and connect documentation to the submitted claim. Do not treat electronic storage alone as proof of compliance. For Medicare outpatient therapy, review the CMS documentation requirements alongside the actual clinical record, not just the software’s available features.

Increased Transparency and Reporting:

When evaluating billing reports, ask which data sources they use, when each source was last updated, and whether claim status, remittance information and posted payments are shown separately. Do not assume a dashboard labeled “real-time” contains a final payer decision. For Original Medicare, CMS states that remittance advice is sent after a claim is processed and includes final adjudication and payment information. Check report totals against the underlying remittance and payment records before using them to assess collections. See CMS remittance advice guidance.

837P Electronic Claims, CMS-1500 Paper Claims, and 835 Electronic Remittance Advice (ERA):

Under HIPAA administrative simplification rules, the national standard for submitting professional physical therapy claims electronically is the ASC X12N 837P (Version 5010, 005010X222A1) transaction (45 CFR 162.1102(c)(3)). Federal Medicare regulations require providers and suppliers to submit Part B claims electronically unless a statutory exception applies—such as the small-supplier exception for practices with fewer than 10 full-time equivalent employees—in which case the prescribed paper claim form is the CMS-1500 (42 CFR 424.32(b) and (d)(2)–(4)). After adjudication, payers return line-item payment and adjustment data using the ASC X12N 835 (005010X221A1) Health Care Claim Payment/Advice standard, commonly called the Electronic Remittance Advice (ERA) (45 CFR 162.1602(c)), which pairs group codes (CO, PR, OA, PI) with CARC and RARC denial and remark codes.

What Happens After Your EMR Marks a Claim “Clean”:

A physical therapy EMR or practice-management scrubber can do more than check whether required fields are populated. Available checks depend on the product and configuration: for example, WebPT documents CCI-edit and ICD-10 Excludes1-conflict settings. Confirm which checks your system applies and whether its payer settings match your contracts. After claim creation, assign responsibility for these four downstream revenue-cycle tasks:

• Clearinghouse and payer front-end acknowledgments (277CA): resolving front-end rejections for subscriber ID mismatches, rendering/billing NPI enrollment gaps, or invalid ICD-10 pointers before the claim ever enters payer adjudication.
• Line-level 835 ERA payment verification: auditing paid units against your contracted fee schedule and Medicare MPPR calculations rather than letting auto-posting rules write off underpayments hidden behind CO-45 contractual adjustment codes.
• Secondary and workers’ comp coordination of benefits (COB): crossover verification and secondary claim submission when primary 835 adjudication leaves coinsurance, deductible, or copay balances (PR-1, PR-2, PR-3).
• Clinical denial rework and appeals: pulling evaluation, progress report, and timed-minute documentation to appeal CO-50 medical necessity denials, CO-16 missing-information rejections, top PT claim denials, and post-payment recoupment demands before payer appeal windows close.

In-House vs. Outsourced Physical Therapy Billing

When deciding whether to keep billing in-house or partner with an outsourced physical therapy billing company, compare both staffing overhead and daily revenue-cycle execution. Across the market, outsourced PT billing typically ranges from 4% to 8% of collections (per the July 2026 Medical Billing Rates guide; a market range, not ePT’s price), while ePT Billing’s published rate is 4.75% of collections. By comparison, one full-time in-house billing clerk costs about $5,125 a month in wage and benefits alone ($46,630 median annual wage in therapy offices per May 2025 BLS data, plus 31.9% for benefits from June 2026 BLS employer cost data), before software, clearinghouse fees, and office space—meaning a 4.75% fee equals one full-time biller’s direct cost at about $107,903 of monthly collections. Run your own practice numbers in our physical therapy billing cost calculator.

What does a medical billing company do for a physical therapy practice?

A billing company takes over the claim work that follows the visit. At ePT Billing that means submitting primary and secondary claims daily, checking CPT codes, timed units and modifiers before claims go out, posting EOBs and ERAs within 24 hours of receipt, investigating denials and correcting or appealing them, and following up on unpaid claims with a monthly insurance aging report. The table below compares each task with in-house staffing, and the full list is on Our Services.

Choose Your Next Billing Resource

For a specific payment adjustment, start with our physical therapy denial-code guide. If you are comparing staffing options, use the billing cost calculator and its assumptions. To compare service responsibilities rather than software features, review what ePT Billing handles for your practice.

Comparing billing companies? Use our 12-question PT billing company checklist to compare fees, reporting, service responsibilities and contract terms.

Source for Medicare documentation and timed units

[2] Centers for Medicare & Medicaid Services, Complying with Outpatient Rehabilitation Therapy Documentation Requirements, September 2025, pages 3, 6–7. The Medicare-specific guidance above should not be treated as a universal rule for every insurance plan.