• Specialty billing guide Physical therapy

Physical therapy billing: the 8-minute rule, the KX threshold, and the certification rule that changed

Last updated: August 2026

By Mindy Corbett, CSPO, CPC, CPB, CPPM · 15 years RCM leadership · 14 min read

THE BOTTOM LINE

PT billing runs on minutes and signatures. Get the minutes right and the plan of care signed on time, and most of the rest follows.

The three things that generate the most preventable denials: units calculated from per-code time instead of pooled timed minutes, plans of care that are unsigned, undated, or out of period, and the KX modifier missing on claims after a patient crosses the annual threshold.

One thing worth knowing before you read further: the plan of care certification rules changed for dates of service on or after January 1, 2025, and a lot of practices are still running the old workflow. That section is below.

Definitions and frequently used terms

Timed codes. Codes billed in 15-minute units based on actual minutes of skilled one-on-one intervention.

Untimed codes. Codes billed once per session regardless of how long they took.

"Always therapy" codes. A separate concept from timed codes, and the two get conflated constantly. Always-therapy codes are the ones that are always therapy services no matter who furnishes them, which means they always require a GP, GO, or GN modifier. That category includes both timed and untimed codes. Evaluations are always-therapy and untimed.

KX modifier. Your attestation that services above the annual threshold are medically necessary and documented in the record.

KX threshold. The annual dollar amount above which the KX modifier is required. Not a cap. See below.

Targeted medical review threshold. A separate, higher dollar amount at which claims may be selected for documentation review.

MPPR. Multiple Procedure Payment Reduction. A payment reduction applied to the practice expense portion of second and subsequent always-therapy codes on the same date.

CQ and CO modifiers. Required when a PTA (CQ) or OTA (CO) independently furnishes more than 10% of a service. Payment drops to 85% of the otherwise applicable amount.

CARC and RARC. Claim Adjustment Reason Code and Remittance Advice Remark Code. CARCs are numeric or alphanumeric. RARCs carry M, N, or MA prefixes. NOTE: B7 is a CARC, not a RARC, and you will see it labeled wrong almost everywhere.

Timed and untimed codes, and why the distinction is the whole game

Most of PT's billable volume sits in timed codes, which makes this specialty unusual. A surgeon either performed the procedure or did not. A therapist who furnishes 22 minutes of therapeutic exercise bills one unit, not two, no matter how the session felt.

Timed codes, billed in 15-minute units:

Untimed codes, billed once per session:

IMPORTANT: 97150 is untimed and it is not therapeutic activities. It is group therapy, billed once per patient per session regardless of how long the group ran. Therapeutic activities is 97530, and that one is timed. These two get swapped for each other in reference material often enough that it is worth checking your own charge master.

The common error in the other direction is applying a unit count to an untimed code, like billing two units of 97010 because packs were on for 25 minutes. Untimed means one unit, one line, always.

NOTE on 97010 specifically: it is bundled under Medicare and never separately payable, so it is a poor example to build a workflow around even though the unit rule is right.

NOTE on electrical stimulation: Medicare requires G0283 for unattended electrical stimulation. CPT 97014 will deny. If you have 97014 in a Medicare-facing template, that is a quick fix worth making today.

The 8-minute rule

Medicare's 8-minute rule is in the Medicare Claims Processing Manual (Pub. 100-04), Chapter 5, Section 20.2. It is not in the Benefit Policy Manual, which covers coverage and plan of care rules instead. I am being specific about this because a wrong manual citation in an audit response undermines everything around it, and this particular miscitation is widespread.

Add up total minutes across all timed services in the session, then apply the table:

Total timed minutesUnits
8 to 221
23 to 372
38 to 523
53 to 674
68 to 825
83 to 976
98 to 1127
113 to 1278

Assigning the remainder unit

Here is the part that is most often described incorrectly.

After full 15-minute units are assigned, the remainder unit goes to the service with the greatest number of remaining minutes. This is a requirement, not a preference, and you do not get to choose.

Worked example. A session with 25 minutes of 97110 and 12 minutes of 97140 totals 37 minutes, which is 2 units.

  1. 97110 absorbs one full 15-minute unit and retains a 10-minute remainder.
  2. 97140 has a 12-minute remainder.
  3. Because 12 is greater than 10, the second unit goes to 97140.
  4. Bill one unit of each.

CMS's own example runs the same way: 33 minutes of 97110 plus 7 minutes of 97140 is 40 minutes, or 3 units, billed as 2 units of 97110 and 1 unit of 97140. The single unit lands on 97140 with only 7 remaining minutes, because the rule compares remainders rather than asking whether each remainder independently clears 8.

IMPORTANT: never compare a summed remainder against the 8-minute floor. The 8-minute threshold applies to the pooled session total in the table above. The remainder comparison is a separate step and it compares codes against each other.

Commercial payers may not use this rule at all

This matters more than it usually gets credit for.

Many commercial payers follow AMA CPT's substantial-portion methodology, sometimes called the rule of eights. Under that method each timed code is evaluated independently, and a unit is billable each time the midpoint of that code is passed, which is 7 minutes 31 seconds for a 15-minute code. Minutes are not pooled.

The two methods produce different answers on ordinary sessions. Eight minutes of 97110 plus eight minutes of 97140 is 1 unit under Medicare's pooled rule and 2 units under the rule of eights.

So "calculate from total timed minutes" is correct advice for Medicare and wrong advice for a rule-of-eights payer. APTA's guidance is direct about this: review payer policy to determine which method applies. Build that into your payer grid rather than standardizing on one calculation.

The KX threshold

The hard therapy cap was repealed by the Bipartisan Budget Act of 2018. The dollar amounts survived as thresholds. It is not a cap and calling it one in front of a payer or a patient invites confusion about whether you can keep treating. You can.

For CY 2026:

Once cumulative allowed PT and SLP charges reach $2,480, every subsequent claim needs the KX modifier. KX attests that continued services are medically necessary and documented. You do not send extra documentation with the claim, but the documentation has to exist and be producible.

Claims above the threshold without KX are denied. This is a pure tracking failure, which is a frustrating way to lose money because the claim is correct in every other respect.

The targeted medical review threshold is $3,000, and it applies separately to PT and SLP combined and to OT. Worth knowing: that figure has not moved since CY 2021 and will not move until 2028, when it starts indexing by the MEI. It does not step up annually the way the KX threshold does, so do not assume it tracked upward with the other number.

Set your alert below the threshold, on purpose

Flag patients at roughly $2,200 in cumulative allowed charges, not at $2,480.

That is about 90% of the threshold, and the gap is deliberate. It gives you room to add KX before the next claim crosses rather than after. If you set the alert at the threshold itself, you will find out you needed the modifier on the claim that already went out without it.

Pull that report monthly. It is a short task and it eliminates an entire denial category.

Plan of care certification, including the rule that changed in 2025

Outpatient PT must be furnished under a plan of care established and certified by a physician or NPP. The therapist cannot self-certify. This is the second big structural difference in PT billing, and it is where a single audit can reach back across months of paid claims.

The timing rules

Initial certification is due within 30 days of the initial therapy treatment. Treatment may begin before the signature comes back. I want to be clear about this because the "get it signed before you treat" version circulates widely and it is not the rule. It also idles evaluations while you wait on a physician office that has its own backlog, which helps nobody.

Delayed certifications are additionally acceptable without justification for 30 days after they are due.

Recertification is required every 90 days or at the end of the initial certification period, whichever is less. That last clause matters. If the plan of care was written for 30 days, recertification is due at 30 days, not 90. The flat "every 90 days" version is correct as a ceiling and misleading for any short-duration plan.

The certifying physician or NPP must sign and date the plan. They do not need to re-examine the patient at recertification, but they do need to review and sign.

The January 2025 exception, which changes the workflow

IMPORTANT: for dates of service on or after January 1, 2025, when a patient arrives with a signed and dated order or referral, that order satisfies the certification requirement, provided the order is in the record and there is evidence the plan of care was submitted to the referring provider within 30 days of the initial evaluation.

The referring provider no longer has to return a signed plan of care. Silence operates as assent.

This is in the CY 2025 Physician Fee Schedule final rule at 89 Fed. Reg. 97710, with the operative discussion at 97912 through 97918.

If your practice is still running a fax-back-and-chase workflow for the initial signature on referred patients, a good part of that work is no longer necessary. You still need the order in the record, and you still need proof you sent the plan within 30 days, so build the workflow around documenting the send rather than chasing the return.

Recertification still requires a signature. The exception covers initial certification.

Progress reports and discharge

Two requirements that get overlooked in guides that focus on certification:

Both are in Medicare Benefit Policy Manual Chapter 15, Section 220.3.

NCCI edits, and an honest note about the 97140 pairs

NCCI defines which code pairs can be billed together. Before reaching for a modifier, check the pair's modifier indicator. Indicator 1 means a modifier can bypass the edit when the clinical facts support it. Indicator 0 means nothing bypasses it.

When an edit exists and the services genuinely were distinct, meaning different body regions or separate treatment objectives during identifiable, separately documented time intervals, modifier 59 or the appropriate X modifier is the correct tool. When they were not genuinely distinct, the bundled payment is the correct outcome and you should take it.

IMPORTANT, and I would rather say this plainly than write around it: the widely repeated claim that 97140 bundles into 97110 could not be confirmed against the current CMS PTP edit file, and the secondary sources disagree with each other. Some name 97110 and 97140 as an edit pair. Others state that the CMS edit involves 97140 with 97530, and that 97110 with 97140 is payer-level bundling logic rather than an NCCI edit.

Those are materially different situations. If there is no Medicare edit on 97110 with 97140, then appending modifier 59 to that pair as a matter of routine is an unnecessary modifier on every claim, and habitual unnecessary 59s are exactly what post-payment review looks for.

So here is the actual instruction, which holds either way:

  1. Pull the current quarterly practitioner PTP edit file from CMS.
  2. Search it for your own high-volume pairs, specifically column 1 = 97110 with column 2 = 97140, and column 1 = 97530 with column 2 = 97140.
  3. Note the modifier indicator on whatever you find.
  4. Apply 59 or an X modifier only where an edit actually exists and the clinical documentation supports separation.
  5. Repeat quarterly, because the file changes quarterly.

That takes about fifteen minutes and it replaces a rule of thumb with a fact about your own claims. I would rather hand you the method than hand you a code pair I cannot stand behind.

MPPR, because it is quietly reducing your payment

When multiple always-therapy codes are furnished to the same patient on the same day, Medicare applies a 50% reduction to the practice expense component of the second and subsequent codes.

Two things to hold onto. It applies to the practice expense portion only, not to the full payment, so the reduction is smaller than 50% of the line. And it applies to always-therapy codes, which is the category distinct from timed codes discussed at the top.

This matters when you are building expected-payment models or investigating a variance. A claim that looks underpaid may be correctly paid with MPPR applied, and chasing it as a denial wastes a day.

Modifiers you have to get right

GP, GO, GN. GP identifies services under a physical therapy plan of care, GO occupational therapy, GN speech-language pathology. Medicare requires these on outpatient therapy claims. A missing GP means denial or processing under the wrong benefit category. GP claims count toward the combined PT and SLP threshold; GO claims count toward the separate OT threshold.

Build a pre-submission check that flags any PT claim line missing GP before it leaves the practice. This is a five-minute clearinghouse rule that prevents a recurring denial.

CQ and CO. When a PTA independently furnishes more than 10% of a service, CQ is required alongside GP, and payment drops to 85% of the otherwise applicable amount. CO is the OTA equivalent. The de minimis standard is more than 10% of an untimed service, or more than 10% of a 15-minute timed unit.

The word doing the work in that rule is independently. Time the PTA spends alongside the therapist is treated differently from time the PTA furnishes on their own.

The denial patterns you will actually see

1. Unit count exceeds documented time (CARC 96, CARC 97)

CARC 96 is "Non-covered charge(s)." CARC 97 is "The benefit for this service is included in the payment/allowance for another service/procedure that has already been adjudicated."

A therapist furnishes 19 minutes of therapeutic exercise and two units go out. Nineteen minutes is one unit; a second unit needs 23. Payers audit unit counts against documented time, reduce the units, and recoup.

Prevention is per-code time capture, covered in the documentation section below.

2. Plan of care unsigned, undated, or out of period (CARC 150, CARC 151)

CARC 150 is "Payer deems the information submitted does not support this level of service." CARC 151 is "Payment adjusted because the payer deems the information submitted does not support this many/frequency of services."

These surface on audit when the plan of care in the record is not properly signed, dated, or certified within the required period.

NOTE: you will see CARC B7 attached to this pattern in a lot of denial taxonomies. B7 is "This provider was not certified/eligible to be paid for this procedure/service on this date of service," and it is a provider enrollment and eligibility code. Classic triggers are CLIA certification and specialty enrollment mismatches. It does not fire because a therapy certification period lapsed. Filing it under plan of care problems sends staff looking in the wrong place.

3. Threshold crossed without KX (CARC 119)

CARC 119 is "Benefit maximum for this time period or occurrence has been reached." That is the right code for this pattern.

NOTE: CARC 149 is sometimes cited here and it does not belong. CARC 149 is "Lifetime benefit maximum has been reached for this service/benefit category." The KX threshold is annual, not lifetime, so 149 describes a different situation entirely.

4. NCCI bundling (CARC 97, CARC 234, CARC 236)

CARC 234 is "This procedure is not paid separately." CARC 236 is "This procedure or procedure/modifier combination is not compatible with another procedure or procedure/modifier combination provided on the same day according to the National Correct Coding Initiative or workers compensation state regulations/fee schedule requirements."

Note that 236's official text is explicitly sensitive to the modifier combination, which is another reason to check the pair's indicator rather than assume nothing can bypass it.

See the honest note above about which 97140 pairs actually carry edits.

5. Medical necessity and functional documentation (CARC 50)

CARC 50 is "These are non-covered services because this is not deemed a 'medical necessity' by the payer."

This arises when the record does not connect functional deficits to the services billed. "Patient tolerated exercises well" gives a reviewer nothing. What holds up is objective measurement: range of motion in degrees, strength grades, balance scores, pain rated against a specific activity, and the named functional limitation the intervention targets.

NOTE: CARC 167 is often cited alongside 50 for this pattern, and it means something else. CARC 167 is "This (these) diagnosis(es) is (are) not covered," which is a diagnosis coverage problem rather than a documentation gap. If you want a second code for the insufficient-documentation pattern, CARC 151 fits far better.

6. Same code, same day, different therapist (CARC 18)

CARC 18 is "Exact duplicate claim/service." Two practitioners each documenting and billing 97110 for the same patient on the same date flags as a duplicate whether or not the services were clinically distinct.

Put a pre-submission check in place that catches same code, same patient, same date. When two providers genuinely did furnish the same service type for distinct purposes, the documentation has to describe the separate clinical objectives and a coder should look at it before it goes out.

Documentation and workflow that holds up

Capture time per timed code, not just total session time. Every note for a session with timed services should record start and stop for each code independently:

97110: 2:05 PM to 2:25 PM (20 min)
97140: 2:25 PM to 2:37 PM (12 min)
Total timed: 32 min = 2 units

That format makes the unit calculation auditable without anyone reconstructing it from narrative. It also makes the remainder assignment visible, which is where the arithmetic usually goes wrong.

Tie every service to a plan of care goal. Name the goal the session addressed and describe the response in objective terms. Notes that record interventions without linking them to goals invite medical necessity questions even when the care was entirely appropriate.

Track certification and recertification dates in the PM system. Alert at 75 days from the last certification, send for recertification then, follow up at 85 days if nothing has come back. Do not start at day 90. A certification that arrives on day 92 leaves a gap where claims are not covered, and physician offices have their own backlogs that you cannot control.

Verify GP at the claim level before submission.

Audit KX tracking monthly, flagging at $2,200 as described above.

Confirm habilitative versus rehabilitative benefit category before the first claim for congenital, developmental, or non-injury conditions. Medicare does not distinguish the two. Commercial payers subject to ACA essential health benefit requirements must cover both under 45 CFR 156.115 but may apply separate visit limits, authorization requirements, or benefit tiers to each. A one-time benefits call that asks explicitly which category applies, and a note recording the answer, prevents a mismatch that surfaces months into a treatment course.

Frequently asked questions

What is the 8-minute rule?

A Medicare policy in Claims Processing Manual Chapter 5, Section 20.2, governing unit reporting for timed outpatient therapy codes. At least 8 minutes of a timed service is required to bill one unit. Total timed minutes across the session determine total units: 8 to 22 is 1 unit, 23 to 37 is 2, 38 to 52 is 3, and so on. The service with the greatest remaining minutes after full units are assigned receives the remainder unit, and that assignment is required rather than optional.

Do commercial payers use the 8-minute rule?

Some do. Many instead use AMA CPT's substantial-portion methodology, where each timed code is counted separately and a unit is billable each time that code's midpoint is passed at 7 minutes 31 seconds. The methods give different unit counts on ordinary sessions, so confirm which one each payer follows rather than assuming.

What is the 2026 KX threshold?

$2,480 for PT and SLP combined and $2,480 separately for OT, up $70 from $2,410 in 2025. Once cumulative allowed charges reach it, subsequent claims need KX. A separate targeted medical review threshold of $3,000 applies and has been unchanged since CY 2021.

Is the therapy cap still a thing?

No. The hard cap was repealed by the Bipartisan Budget Act of 2018. What remains is a threshold above which you attest with KX. You may continue treating past it as long as the services are medically necessary and documented.

Can I bill 97140 and 97110 on the same day?

Check the current quarterly PTP edit file for that specific pair before you decide, because the secondary sources disagree about whether a Medicare edit exists on it. If an edit exists, modifier 59 or an X modifier is appropriate only when the services addressed different body regions or separate treatment objectives during separately documented time intervals. If no edit exists, no modifier is needed and adding one routinely creates its own exposure.

When must a plan of care be certified and recertified?

Initial certification within 30 days of the initial treatment; treatment may begin before it comes back. Recertification every 90 days or at the end of the initial certification period, whichever is less. For dates of service on or after January 1, 2025, a signed and dated order or referral satisfies initial certification if the order is in the record and the plan of care was sent to the referring provider within 30 days of the evaluation.

What does the GP modifier do?

Identifies the service as furnished under a physical therapy plan of care, distinguishing it from OT (GO) and SLP (GN). Required by Medicare on outpatient therapy claims. Missing GP means denial or wrong benefit application. GP claims count toward the combined PT and SLP threshold.

Are G-codes still required?

No. CMS required G-code functional reporting from 2013 through 2018 and discontinued it effective January 1, 2019. Some commercial payers and accreditors now request patient-reported outcome measures, and validated instruments like PROMIS, FOTO, and OPTIMAL support medical necessity arguments well, so capturing them systematically is worth doing on its own merits.

What is MPPR?

A 50% reduction to the practice expense component of second and subsequent always-therapy codes furnished to the same patient on the same day. It reduces part of the payment, not half the payment, and a claim showing this reduction is usually correctly paid rather than underpaid.

How we work on this at ROI

PT denials are patterned tightly enough that they can be caught before submission rather than worked after.

If you want to see where your own denials concentrate first, the revenue health assessment is free.

Two things to verify in your own practice this week

  1. Pull the current PTP edit file and check your top code pairs, per the NCCI section above.
  2. Check whether your certification workflow reflects the January 2025 exception. If you are still chasing initial signatures on referred patients, you may be doing work the rule no longer requires.

If either of those turns up something that does not match what is written here, tell me. I would rather correct the guide than have the next person work from it and get stuck.

Sources

  1. Centers for Medicare & Medicaid Services. Therapy Services: KX modifier thresholds (CY 2026). https://www.cms.gov/medicare/coding-billing/therapy-services
  2. Centers for Medicare & Medicaid Services. Transmittal R13437CP, CY 2026 therapy threshold amounts. https://www.cms.gov/files/document/r13437cp.pdf
  3. Centers for Medicare & Medicaid Services. Medicare Claims Processing Manual, Pub. 100-04, Chapter 5, Section 20.2 (counting units for timed therapy codes). https://www.cms.gov/regulations-and-guidance/guidance/manuals/downloads/clm104c05.pdf
  4. Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual, Chapter 15, Sections 220 and 220.3 (certification, progress reports, discharge). https://www.cms.gov/Regulations-and-Guidance/Guidance/Manuals/downloads/bp102c15.pdf
  5. Centers for Medicare & Medicaid Services. Complying With Outpatient Rehabilitation Therapy Documentation Requirements (MLN905365). https://www.cms.gov/files/document/mln905365-complying-outpatient-rehabilitation-therapy-documentation-requirements.pdf
  6. Centers for Medicare & Medicaid Services. MM12397, Reduced Payment for PT and OT Services Furnished in Whole or in Part by PTAs and OTAs. https://www.cms.gov/files/document/mm12397-reduced-payment-physical-therapy-and-occupational-therapy-services-furnished-whole-or-part.pdf
  7. Federal Register. CY 2025 Medicare Physician Fee Schedule Final Rule, plan of care certification exception (89 Fed. Reg. 97710, at 97912 to 97918). https://www.federalregister.gov/documents/2024/12/09/2024-25382/medicare-and-medicaid-programs-calendar-year-2025-payment-policies-under-the-physician-fee-schedule
  8. American Physical Therapy Association. Medicare's New Exception to the Plan of Care Certification Requirement. https://www.apta.org/your-practice/payment/medicare-payment/coding-billing/medicares-new-exception-plan-of-care-certification-requirement
  9. American Physical Therapy Association. Coding for Timed Codes. https://www.apta.org/your-practice/payment/coding-billing/coding-for-timed-codes
  10. American Physical Therapy Association. Multiple Procedure Payment Reduction. https://www.apta.org/your-practice/payment/medicare-payment/coding-billing/mppr
  11. American Physical Therapy Association. Medicare Payment Thresholds for Outpatient Therapy Services. https://www.apta.org/your-practice/payment/medicare-payment/coding-billing/therapy-cap
  12. eCFR. 45 CFR 156.115, Provision of essential health benefits (habilitative and rehabilitative services). https://www.ecfr.gov/current/title-45/subtitle-A/subchapter-B/part-156/subpart-B/section-156.115
  13. Centers for Medicare & Medicaid Services. National Correct Coding Initiative Edits and quarterly PTP edit files. https://www.cms.gov/medicare/coding-billing/national-correct-coding-initiative-ncci-edits
  14. X12.org. Claim Adjustment Reason Codes. https://x12.org/codes/claim-adjustment-reason-codes