Focus on America: The Medicare 8 Minute Rule for Physical Therapy Billing

It is always interesting to study other countries’ methods in the healthcare business. This article will focus on the Medicare 8 minute rule which is applied to physical therapy organization billing Medicare for their patients. Of course, in America, these organizations have to bill insurance companies of their patients, but in this case, Medicare is particular as it represents public insurance in the USA.

The Relationship between Medicare and Physical Therapy Practice

There is no doubt that in America, administration is part of running a physical therapy practice. Whether they welcome only patient with private insurance or not, they’ll still have to delegate some time to invoicing these companies to get paid for the services they rendered to their clients. However, if they decide to accept patients insured by Medicare, the public insurance in America, they will have to follow strictly rules, one of them being the “Rule of 8” billing.

Medicare has put a system in place which is called the Medicare 8 minute rule, used by the physical therapy practices to invoice Medicare. It is based on what it calls “billing units”, which is what will be found of the bill sent to Medicare instead of a simple session billing. With that in mind, let’s explain the role of the “billing units” inside the 8 minute rule for physical therapy billing, used by Medicare in the USA.

What are “Billing Units” inside Medicare 8 Minute Rule?

If a physical therapy practice decides to accept Medicare patients, they also agree to the fact that billing them will be different from all other insurance companies. That is because Medicare has a very precise definition of the time that can be billed in regards to their patients’ care received at their office. Understanding them is key for the practice, before they start treating patients. It is the only way for them to make sure that this treatment is done efficiently during the time they spend with a patient.

That system was created by the Medicare Administrative Contractor National Government Services and is determined by Local Coverage Determination (LCD). Once physical therapy clinics understand the way it works, it is rather simple for them to conform and act accordingly so they can invoice their services correctly. This rule is based on time codes that explain the billing unit. It is there to ensure that therapists only invoice Medicare for the time spent attending to the patients. Anything else, including appointment scheduling or working with colleagues in the office, cannot be inserted in the billing units.

The Medicare Rule of 8 Billing is Strict and Precise

There is no uncertainty around the rule of 8 minutes employed by Medicare, which makes the work of the therapists easier, as they understand what they can do in a given amount time if they want to be able to invoice billing units. Everyone comprehends that the name of the rule explains, in great part, how it works. 8 minutes of work represent 1 unit that can be billed to Medicare. And this needs to be followed strictly. 8 minutes is the minimum amount of time spent on a patient which can be billed. But from the moment the therapist attaints it, it can continue all the way to 22 billing minutes. If the time is separated into two tasks, and one does not amount to the regulation of 8 minutes than they can join both tasks in order to reach the minimum time and create one billing unit. When the first unit of 8 minutes is reached, the rest of the time spent attending to the patient will be billed by increments of 15 minutes. If the therapist attends to the patient for additional time over the last 15 minutes invoiced, and that time is below 14 minutes, they will be wasted as he won’t be allowed to invoice them. It is then crucial for professionals to keep a strict sense of the time spent with the patient, so that they can stop the therapy in time, before they start working for free.

Why Do Physical Therapists Accept Medicare Patients

Although it implies much more administrative measures to be handled, it is still a fact that working with Medicare brings many patients to the practices who accept them. The first few patients that come from Medicare are usually a learning curve for the clinic, in which they have to spend more time than with a regular patient (in terms of administration).

It is also important for the therapist to adapt his way of working accordingly to the 8 minute rule, so that he doesn’t work for nothing. But once the system is installed inside the practice, then the recurrence of patients sent by Medicare fully justifies the work that had to be done to start collaborating with Medicare. There are consequences to the practices that bill incorrectly and request wrong amounts. Medicare may flag them and stop sending them patients to treat.

So, should we look into such a program for public health in the UK, regarding billing of physical therapy treatment? There are always lessons to learn but let’s keep in mind that it can also show us the things this country does well.

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