Two rules that live in the note, not on the claim
Most therapy billing errors are not coding errors. They are disagreements between the claim and the note it came from: four units billed where the minutes in the note support three, or a Medicare line sent past the year's therapy threshold without the modifier that says the care is still medically necessary.
Two Medicare rules account for a large share of that, and both are rules about documentation as much as billing. This article explains them in plain terms, says what the record has to show, and then describes exactly what ArkCloud Rehab checks - and what it leaves to your biller.
Nothing here is billing advice for your practice. The rules come from the Centers for Medicare & Medicaid Services (CMS), and commercial payers set their own.
The 8-minute rule, counted across the visit
Therapy procedure codes come in two kinds. Untimed codes are billed once per visit whatever the time spent, the evaluation codes being the familiar example. Timed codes are billed in 15-minute units: therapeutic exercise (97110), manual therapy (97140), therapeutic activities (97530), neuromuscular re-education (97112), gait training (97116) and the rest of the timed list.
The CMS rule, in the Medicare Claims Processing Manual (chapter 5, section 20.2), works like this:
- Add up the minutes of every timed service delivered in the visit.
- Bill one unit for each full 15 minutes.
- Bill one more unit if the remainder is 8 minutes or more.
So 8 to 22 total timed minutes supports one unit, 23 to 37 supports two, and 38 to 52 supports three. Under 8 minutes of timed treatment in the whole visit supports none.
The detail that catches people is the word total. Medicare counts across the visit, not per code. Ten minutes of 97110 and ten minutes of 97140 is 20 timed minutes, which supports one unit, not two. Which code that one unit goes to is a billing judgement; how many units the visit supports is arithmetic.
Many commercial payers use a per-code "substantial portion" convention instead. For a visit with a single timed code the two give the same answer. For a visit with several, they can differ, so the payer's own rule is the one that counts.
What the note has to show for timed codes
The arithmetic is only as good as the minutes it starts from. CMS asks for the total timed-code treatment minutes and the total treatment time of the visit to be documented, in minutes, in the record (Medicare Benefit Policy Manual, chapter 15, section 220.3).
In practice that means:
- Minutes for every timed service, recorded at the time, not reconstructed from the units afterwards.
- The visit's own length, so that the timed minutes can be read against it.
- Units that the minutes support. Billing fewer is the practice's own choice. Billing more is the overbill an audit looks for.
The quiet failure is the visit where every number looks plausible on its own: 30 minutes of 97110 and 30 minutes of 97140, billed as four units, in a visit that ran for half an hour. Each line is fine. Together they describe an hour of treatment delivered in thirty minutes.
The KX threshold
Medicare used to cap outpatient therapy spending per beneficiary per year. The hard cap was removed by the Bipartisan Budget Act of 2018, but the threshold it set remains as a checkpoint: once a patient's therapy spending for the year passes it, Medicare pays further therapy only on lines carrying the KX modifier.
Three things about KX matter for documentation:
- KX is an attestation. Adding it says the services are medically necessary and that the record supports that. It is not a formatting step, and it is not something software should add on a clinician's behalf.
- There are two thresholds, not one. Physical therapy and speech-language pathology are counted together. Occupational therapy is counted on its own.
- The amount changes every calendar year. CMS publishes it annually, so any figure written into a template goes stale on January 1.
Medicare also asks for a progress report at least once every 10 treatment days (Medicare Benefit Policy Manual, chapter 15, section 220.3), which is where medical necessity is usually shown.
What ArkCloud checks
Every behavior below is in the product today and is described in the charge capture documentation.
Units are checked against minutes, never silently changed. When a therapist records timed services with units, ArkCloud counts the visit's total timed minutes and works out how many units the 8-minute rule supports, across the whole visit. If the recorded units are more than the minutes support, the recording form says so. ArkCloud only derives units from minutes when no units were entered at all; it never rewrites a number a person typed, because the split across codes is the biller's call.
The overbill cannot become a charge. The same check runs again at billing. A visit whose timed units exceed what its minutes support is held out of billing with the reason shown until it is corrected. So is a visit whose timed minutes add up to more than the visit lasted, for every payer, because that is arithmetic rather than a payer rule. A Medicare visit with a timed service that has no minutes recorded is held too, since the rule cannot be applied without them. Billing fewer units than the minutes support is not flagged.
KX is suggested, and a person decides. For a Medicare patient, ArkCloud adds up that patient's billed therapy charges for the calendar year, in the right group - physical therapy and speech-language pathology together, occupational therapy separately - and suggests KX once the total reaches the threshold. It uses billed charges, which run higher than the allowed amounts Medicare actually counts, so the suggestion can arrive early but not late. The modifier is added only when a person accepts it, and only before the service becomes a charge.
A line past the threshold without KX is held. Where the year's threshold is configured for the service, a Medicare line past it without KX does not go to billing. Where it is not configured, the line is not held, and the billing screen warns that it was not checked rather than passing it silently.
The discipline modifier comes from the episode. Medicare therapy lines need GP, GO or GN for physical therapy, occupational therapy or speech-language pathology. ArkCloud adds the right one from the episode's discipline when it can, and holds the line when it cannot tell - a multidisciplinary episode, for example.
Progress reports are counted. For Medicare, a treatment visit is held once the 10-treatment-day limit since the last progress report is reached, until the report is written. The progress report documentation covers how the count works.
What ArkCloud does not do
It does not choose procedure codes. Your clinic's service catalog does, and a qualified coder assigns them. It does not decide how units are split across codes. It does not add KX for anyone. And it does not know a payer's private rules unless they are the Medicare rules above.
The point of all of it is narrower than "automated billing": the claim should never say something the note does not.
ArkCloud Rehab is generally available. ArkCloud Rehab is $49.99 a month per organization, not per clinician. A clinic that also wants ArkCloud to build and track its insurance claims adds RCM Essentials at $499 a month, so the two together are $548.99 a month. Both prices are published on the pricing page.
See how these checks fit a physical therapy, occupational therapy or speech-language pathology practice, or request a demo to walk a visit from note to charge. Related reading: the referral is the front door.
