Physical therapy reimbursement and payment policy

Physical therapy reimbursement and payment policy

            Physical therapy charges and reimbursements involve a complex with some carriers setting up their own Reasonable and Customary reimbursement amounts for services and Durable Medical Equipment (DME). Other carriers use the relative value units set up by Medicare. Maximizing reimbursement in regard to physical therapy related charges for services and equipment used is one of the aims of physical therapy providers. The methodology used by providers of physical differ in terms of setting physical therapy related charges. As such, each policy has its strengths and weaknesses.

            The payment policy established by Tufts Health Plan for physical therapy providers follows several guidelines for commercial providers. The provider has to meet several billing requirements such as specific and up-to-date standardized codes as well as a modifier. Modifiers that affect the reimbursement process must be included in the first field whereas the secondary fields contain description details about the modifier. Having the right billing codes and descriptions is crucial to successful reimbursement as per the Tufts Health Plan. Pricing of physical therapy services follows a daily maximum payment in addition to pricing as per fee schedule procedures. After the provider has submitted claims, a statement of account is issued by the Tufts Health Plan detailing the status of the reimbursements (Tuft Health Plan, 2009).

            According to HIPAA compliant 835, electronic remittance advice is allowed where the provider submits claims and complaints electronically. Codes have to be standard for the claim process to be reflected (Tuft Health Plan, 2009). It is notable that failure to submit the correct and standard codes for the physical therapy service offered as well as the equipment used to administer therapy results into rejection of the claims (NCHC Policy No. NCHC2009.43., 2010).

            The American Psychical Therapy Association has outlined procedures related to billing of statements and reimbursement claims. The strength of the system is that it checks whether the claimed fees are in tandem with the geographic area where the patient received the services. The credibility of the physical therapist is also assessed in addition to checking for double billing (America Physical Therapy Association, 2009). It is also evident that the physical therapist has to justify the appropriateness of the services in terms of frequency and time taken to administer therapy.

            With the Tufts Health Plan for determining reimbursement and payment for physical therapy provider, the provider is given a chance to apply for claims through an electronic means. An electronic means of billing using certain software packages is an important approach to enhancing overall workflow for the billing company. It is notable that there is improved efficiency when reimbursement information as well as enhancing documentation (Gault, 2008). This is essential in that the providers of physical therapy services have an easier way of submitting claims and enquiring claim status. Using modifiers and standard billing codes, the Tufts Health Plan is able to detect defaulters thus preventing unnecessary costs. This is however not appealing to providers since likelihood of using the wrong modifiers and codes are very likely thus leading to denial of claim (Physical Therapy Billing, 2007). For a provider to maximize reimbursements, it is advisable to avoid using the same billing process for different patients since different patients have different billing requirements depending on the type of service offered. It is evident that physical therapy carriers need to have a wide knowledge of the guidelines provided by billing companies in order to be shielded from losses related to rejected reimbursement claims.


America Physical Therapy Association. (2009). Guidelines: Physical Therapy Claims Review BOD G08-03-03-07 [Amended BOD 03-03-13-29; BOD 02-02-22-31; BOD 03-01-16-52; BOD 03-00-22-56; BOD 03-99-16-50; Initial BOD 11-97-16-54] [Guideline]. Retrieved 19, July 2010 from

Gault, G. M. (2008). Physical therapy and reimbursement – where are we heading? Retrieved 19, July 2010 from—Where-Are-We-Heading?&id=1203728

NCHC Policy No. NCHC2009.43. (2010). Division of medical assistant physical therapy. Retrieved 19, July 2010 from

Physical Therapy Billing. (2007). Physical therapy billing secrets. Retrieved 19, July 2010 from

Tuft Health Plan. (2009). Physical Therapy Professional Payment Policy. Retrieved 19, July 2010 from


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