3 Administrative Challenges that are Costing You Money

Chess pieces on a board

Address these costly insurance and reimbursement issues to bump your bottom line.

By Danielle Pantalone, MPP*, and Jane Oeffner PT, DPT, MBA*

Insurance is confusing and most time-strapped physical therapists simply don’t have the resources to comb through and decipher all the ever-changing rules.

These include administrative requirements for credentialing, prior authorization, and setting up payers in accordance with guidelines by the Centers for Medicare and Medicaid Services (CMS) or American Medical Association (AMA).


Credentialing is a complex process in which physical therapists submit their qualifications, education, training, and experience in order to bill an insurance company for reimbursement. Becoming credentialed involves obtaining, filling out, and submitting a series of applications with insurance companies. Once applications have been submitted, submitters must confirm the application has been received and follow up frequently to ensure the process is progressing. Although it might sound fairly straightforward, the process is rarely uncomplicated. The credentialing process must be repeated for each and every insurance company where physical therapists wish to submit claims. On average, a provider can expect the credentialing process to take 90 to 120 days. Most therapists would describe the process as burdensome, as it draws time away from patient care and puts strain on office administrators.

This is where it is essential to understand the ins and outs of the practice’s payer mix. Some insurances backdate claims to credentialing application submission date so PTs can see patients immediately while other insurances do not backdate and all claims that are submitted during that timeframe will be denied. The billing team and clinical team should work together to ensure all requirements are met. Denials can also result from failing to complete a section or submit a document, which can cost many lost hours and ongoing effort to resubmit applications. All these issues ultimately cost practices time and money.


For most prior authorizations, practices must follow multiple steps. The process, overall, seems simple but has proven to be extremely cumbersome. Insurance companies are constantly changing requirements on what needs to be authorized as well as changing the process obtaining authorization. Often with each authorization, significant time is spent on the phone on hold, either trying to get answers regarding the payer’s process or to obtain the actual authorization. Too frequently, the time to submit one prior authorization reaches up to 60 minutes!

More payers than ever are requiring prior authorization for physical therapy. This year alone, United Healthcare and Anthem Blue Cross Blue Shield have both implemented strict prior authorization requirements in dozens of states. If these authorizations are overlooked, all visits for that patient will be denied and are unable to be appealed. It has become absolutely necessary to verify a patient’s insurance ahead of time in order to know what their plan requires for prior authorization.


Unfortunately, very few therapists understand the core differences between billing for insurances that follow AMA guidelines and insurances that follow CMS guidelines. Within an EMR, practices should be able to set up and customize the billing and payer settings to ensure they are billing accurately and getting reimbursed properly for the services rendered. First and foremost, it is extremely important that the billing team is verifying with each insurance carrier whether they follow CMS or AMA guidelines.

Per CMS, in order to bill one unit of a timed CPT code, PTs must perform that associated modality for at least 8 minutes. Medicare takes the total time spent in a treatment session and divides by 15 to figure out how many units are rendered on a given service date. If 8 or more minutes are left over, therapists can bill that time as an additional unit. If 7 minutes or fewer minutes are left over, one may not bill a unit for those minutes, but may count them in total treatment time.

The main difference under AMA guidelines is that the AMA does not calculate the total time or cumulative time of a treatment session. They consider each unit and each unit must be at least 8 minutes in order to bill for it. This is why some people call the AMA guidelines the “Rule of 8s.” If physical therapists don’t set up insurance payers correctly, they may be cutting themselves short on the number of units they are billing and therefore, experience significant decreases in reimbursement.

It “pays” to be in the know! 

Examples for Understanding the AMA Rule of 8s:
  • Bill 97530 for 8 minutes and then bill 97110 for 8 minutes = 2 units billed under AMA guidelines. 1 unit billed under CMS guidelines.
  • Bill 97530 for 16 minutes and then bill 97110 for 7 minutes = 1 unit billed under AMA guidelines. 1 unit billed under CMS guidelines.
  • Bill 97530 for 8 minutes, 97110 for 8 minutes and 97112 for 8 minutes = 3 units billed under AMA guidelines. 2 units under CMS guidelines.

Danielle Pantalone and Jane Oeffner

Danielle Pantalone, MPP, is co-founder/owner and president and Jane Oeffner, PT, DPT, MBA, is director of business development for Lincoln Reimbursement Solutions. They can be reached at dpantalone@lincolnrs.com and joeffner@lincolnrs.com.

*The author has a professional affiliation with this subject.

Copyright © 2018, Private Practice Section of the American Physical Therapy Association. All Rights Reserved.

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