Physical therapy is billed with two kinds of CPT codes. Evaluations (97161, 97162 and 97163, by complexity) and re-evaluations (97164) are untimed: one unit per visit, however long they take. Most treatment codes, such as therapeutic exercise (97110), neuromuscular re-education (97112), gait training (97116), manual therapy (97140) and therapeutic activities (97530), are timed in 15-minute units. For Medicare, units come from the total timed minutes of the visit under the "8-minute rule", every therapy line carries the GP modifier, and the KX modifier is added once the patient's therapy for the year passes the threshold CMS publishes.
The rules below are Medicare's, from the Medicare Claims Processing Manual, the Medicare Benefit Policy Manual and the National Correct Coding Initiative (NCCI) policy manual. Commercial payers and Medicaid plans may count units differently and have their own visit limits and authorization rules, so check the payer's policy for the date of service. Payment varies by payer and locality; for Medicare, use the Physician Fee Schedule look-up.
What are the physical therapy evaluation codes?
- 97161, 97162 and 97163 are initial evaluations at low, moderate and high complexity. The CPT descriptors set out the elements that decide the level (the patient's history and comorbidities, the examination, the clinical presentation and the clinical decision-making) and a typical time for each level. The level has to match what the evaluation documents.
- 97164 is a re-evaluation of a patient under an established plan of care.
In the 2026 Medicare fee schedule, 97161, 97162 and 97163 carry identical relative values, so for Medicare the level doesn't change payment. It still has to be accurate: other payers may pay by level, and the record should support the code billed.
Occupational therapy has its own evaluation codes (97165 to 97168).
When can a re-evaluation (97164) be billed?
Medicare treats a re-evaluation as a formal reassessment, not routine monitoring. The Benefit Policy Manual says it is covered only when the documentation supports the need for further tests and measurements, for example:
- new clinical findings;
- a significant change in the patient's condition;
- the patient not responding to the treatment in the plan of care.
A re-evaluation before a planned discharge can also be appropriate. Ongoing assessment of progress during treatment is part of each treatment visit and isn't billed as a re-evaluation. NCCI edits pair 97164 with the treatment codes; a modifier (59 or XU) is used only when the patient's status changed and a re-evaluation was reasonable and necessary.
How does the 8-minute rule work?
For Medicare, timed codes are billed in 15-minute units, counted from the total minutes of timed treatment in the visit:
| Total timed minutes | Units |
|---|---|
| 8 to 22 | 1 |
| 23 to 37 | 2 |
| 38 to 52 | 3 |
| 53 to 67 | 4 |
The pattern continues in 15-minute steps. The Claims Processing Manual adds these rules:
- Add up the minutes of all timed services first; the total sets the number of units.
- A service performed for 15 minutes or more gets at least one unit.
- Give the extra units to the service that took the most time.
- If several services each took 7 minutes or less but their total is 8 minutes or more, bill one unit for the service that took the most time.
- Fewer than 8 total timed minutes: no timed unit is billed.
A hypothetical example: 30 minutes of therapeutic exercise (97110) and 8 minutes of manual therapy (97140) make 38 timed minutes, which is 3 units: 2 units of 97110 and 1 unit of 97140.
Untimed codes don't count toward the total. Evaluation minutes aren't counted as treatment minutes either. The record must show the total timed minutes; the Benefit Policy Manual doesn't require minutes for each intervention, although many practices record them.
Which modalities are timed, and which aren't?
- Supervised modalities are untimed: one unit per visit. Medicare doesn't accept 97014 for unattended electrical stimulation (it is not valid for Medicare in the 2026 fee schedule); it uses HCPCS code G0283 instead. Hot or cold packs (97010) are bundled and not paid separately.
- Constant-attendance modalities are timed in 15-minute units, for example therapeutic ultrasound (97035) and attended electrical stimulation (97032).
Medicare also reduces the practice expense portion of payment for the second and later units of therapy services on the same day (multiple procedure indicator 5 in the fee schedule file).
Which modifiers do therapy claims need?
- GP on every physical therapy line, showing the service was delivered under a physical therapy plan of care. GO is for occupational therapy and GN for speech-language pathology.
- CQ when a physical therapist assistant furnished the service in whole or in part. Medicare pays these services at a reduced rate.
- KX once the patient's physical therapy and speech-language pathology services for the year (combined) pass the KX threshold amount; occupational therapy has a separate threshold. KX confirms the services are medically necessary and that the record shows it. The threshold amounts are set each year: see the annual KX threshold CMS publishes. Above a higher amount, claims can be selected for targeted medical review.
- 59 or XU only when two services that an NCCI edit pairs were performed in separate time intervals, and the note shows it.
What does Medicare require for the plan of care?
Medicare pays for outpatient therapy furnished under a written plan of care that a physician or non-physician practitioner certifies:
- Initial certification: a dated signature on the plan (or another document approving it) within 30 days of the first treatment, which includes the evaluation. A verbal certification must be followed by a signature within 14 days.
- Recertification: when the plan needs a significant change, and at least every 90 days.
- Progress reports: at least once every 10 treatment days.
The Benefit Policy Manual warns that payment may be denied if the plan isn't certified, so therapists should send the plan to the certifying practitioner as soon as it is written.
Where do physical therapy claims go wrong?
- Units that don't match the total timed minutes in the note.
- Evaluation level that the documented history, examination and decision-making don't support.
- Routine re-evaluations billed during a course of treatment.
- A missing GP modifier, or KX missing once the threshold is passed, or KX added without a record that supports it.
- 97014 billed to Medicare instead of G0283.
- Plans of care never certified, or recertifications that lapsed.
For billing support, see Highview's physical therapy billing services.
Sources
- CMS, Medicare Claims Processing Manual, Chapter 5: section 10.2 (KX modifier threshold and targeted medical review), section 20.1 (GP, GO and GN modifiers), section 20.2 (timed and untimed codes, counting minutes for 15-minute units).
- CMS, Medicare Benefit Policy Manual, Chapter 15, sections 220.1.3 (certification and recertification of plans of care) and 220.3 (documentation, progress reports, re-evaluations, evaluation minutes).
- CMS, Therapy Services: current KX modifier threshold amounts, targeted medical review threshold, CQ and CO modifiers.
- CMS, Medicare NCCI Policy Manual, Chapter 11 (effective January 1, 2026), section P: timed code pairs in different intervals, re-evaluation edits.
- CMS, PFS Relative Value Files, RVU26D: 2026 status and relative values of 97161–97164, 97110, 97112, 97116, 97140, 97530, 97035, 97032, 97014, 97010 and G0283; multiple procedure indicator 5.
- CMS, HCPCS quarterly update (October 2026 file): modifiers GP, CQ and KX.
- CMS, Search the Physician Fee Schedule.