Most people are familiar with the 8 minute rule as the common way to bill units of physical therapy services in an outpatient setting. However, if you’re young in the profession, like me, you may not have heard of Substantial Portion Methodology (SPM). Even if you’ve been a practicing clinician for a number of years, you may have neglected SPM to make life easier, or just forgot about SPM all together due to how your company bills insurance.
8 Minute Rule: Centers for Medicare and Medicaid Services (CMS)
Medicare providers are required to bill Medicare patients according to CMS rules, but Medicare rules do not apply to other insurance policies unless otherwise specified.
In December 1999, the Health Care Financing Administration (HCFA) announced that as of April 1, 2000, the 8 minute rule must be used to bill Medicare beneficiaries for outpatient therapy services, according to Transmittal 747. The system applies to therapeutic services involving direct patient contact from the provider. A unit was re-defined as the number of times the service reported was performed.
- “The schedule of times is intended to provide assistance in rounding time into 15 minute increments.”
- “It does not imply that any minute until the 8th should be excluded from the total count as the timing of active treatment counted included time.”
- “If more than one CPT code is billed during a calendar day, then the total number of units that can be billed is constrained by the total treatment time.”
Eventually, Transmittal 747 came to be known as Medicare’s 8 minute rule.
SPM: Substantial Portion Methodology
SPM is not new! It actually predates the 8 minute rule. Before the 8 minute rule, SPM is how services were billed to all patients, including Medicare beneficiaries.
- Current Procedural Terminology (CPT) codes were first created in 1966.
- Health Insurance Portability and Accountability Act (HIPPA) of 1996 sought to insure that all health care claims were standardized.
- CPT assistant affirmed the use of SPM in December 2003 and again in August 2005.
The SPM sources of information is the Current Procedural Terminology (CPT) Assistant. “In the past, the focus and purpose of the CPT Assistant was to impart coding advice from the AMA perspective based on discussion on the use and interpretation of the codes at panel meetings and as reflected in the official panel minutes. With the creation of the editorial board, the focus of the newsletter will subtly shift from providing strict CPT coding guidance and interpretation to responding to ‘real world’ coding issues” (CPT Assistant February 2007 / Volume 17,Issue 2).
“Payers may develop a payment policy related to the reporting of timed codes in the 97000 series that follow Medicare or are more strict (i.e. require services be provided for the full 15-minutes) or allow documentation to support medical necessity for any portion of the care provided within the range of the 15-minute service descriptor. Many private payers either have no stated policy or follow Medicare policy” (CPT Assistant, August 2005/Volume 15,Issue 8).
Can a facility bill differently to payer sources for the exact same service? Yes, Medicare does not set the rules for other payer sources. Facilities should follow payer guidelines in that payer’s contract. If the contract is silent on specifics for timed codes, SPM set forth by the CPT assistant should be considered as a foundation for code selection.
Every payer can dictate how they choose to pay for physical therapy services. Medicare requires facilities to bill all Medicare patients according to the Centers for Medicare and Medicaid Services (CMS) 8 minute rule. However, the 8 minute rule is a Medicare rule, not a requirement that all payer sources are required to bill services by.
The sources who require physical therapy be billed according to the 8 minute rule:
- Other Federal Payers:
- Tricare (Armed Services)
- Blue Cross for Federal employees
- Champus (veteran’s)
- OWCP: Office of Worker’s Compensation Program, administered by ACS
- Medicare Advantage Programs
- Medicare Plus Blue
- Pyramid Life
- Humana (advantage programs)
- Aetna Advantage Plans
Payers who can be billed according to SPM:
- Blue Cross Blue Shield
- Auto (Geico, State Farm, Allstate)
- Workman’s Comp
Primary vs secondary payers:
- If either payer is a federal payer, bill according to the 8 minute rule.
SPM only applies to timed codes; nothing changes with service based/un-timed codes:
- Serviced based/untimed codes – nothing changed from 8 minute rule:
- Do not require direct 1 on 1 time with the patient
- Can only bill one unit of each untimed code daily per discipline per patient (patient starts w/ hot pack and ends w/ cold pack = 97010 x 1)
- Allowed to double book timed and untimed codes
- Timed Codes- SPM only applies to timed codes:
- Any unskilled therapy is NOT covered
- Must be 1 on 1 with the patient
- Dressing changes still not covered
- Specific time of treatment must still be documented
- Co treatments and re-checks remain the same as with the 8 minute rule
What’s the difference?
“As with any 15 minute timed code, it is important to recognize that a substantial portion of 15 minutes must be spent in performing the pre-, intra-, and post service work in order to report (a timed code). If only a few minutes are spent performing the physical medicine service, either code should not be billed” (CPT Assistant, August 2005/Volume 15, Issue 8; CPT Assistant, December 2003/Volume 13, issue12).
“If the manual therapy provided takes a minor portion of 15 minutes, the provider should…not bill the second service unit” (CPT Assistant, December 2003).
SPM examples for modalities:
- Iontophoresis (does not change): you can charge for everything except run time
- Ultrasound, attended e-stim, contrast bath, hubbard tank (does change): the prep and clean-up part of “pre, intra- and postservice work” is included in the charge
Choosing between the 8 minute rule and SPM (for commercial insurances)
- If you’re in a contract with Medicare, you cannot charge less for a service than what Medicare will reimburse. When a commercial insurance pays for therapy services, the numbers must be run both ways:
- Determine the number of minutes provided for each separate CPT (10 minutes manual therapy, 8 minutes ther ex)
- Run the numbers both ways
- Apply the most appropriate billing method
- Using the 8 minute rule, the patient will be charged 1 unit
- Using SPM, the patient would not be charged since none of the CPT codes were greater or equal to 8 minutes
- Since no single unit is greater than or equal to 8 minutes, the codes must be totaled, and the 8 minute rule will be applied to bill the correct charge.
- With commercial insurance, billing methods may vary from one session to another depending on the treatment provided (for example, the patient is billed according to the 8 minute rule on Tuesday, then billed according to SPM on Thursday)
- 8 minute rule: apply greater skill principle and charge 2 units
- SPM: Manual x 1 , Ther Ex x 1 , Neuro Re-ed x 1 = 3 units
- Manual therapy and NRE codes are less than 8 minutes. The codes must be totaled and the 8 minute rule can be applied.
A substantial portion of the 30 minutes was utilized performing manual therapy, therefore it is appropriate to bill manual therapy x 2:
- 25 minutes – (15 minutes, 1 unit) = 10 minutes
- 10 minutes > 8 minutes
- 8 minutes = substantial portion of 1 whole unit of 15 minutes
- Bill Manual x 2 and Gait x 1
Medicare has seemed to take over or even scare the physical therapy profession into only utilizing the 8 minute rule. As of today, the common way to bill units of physical therapy services in the outpatient setting is the 8 minute rule. However, there is another method that can be used to bill commercial insurance that predates the CMS 8 minute rule. This method is substantial portion methodology (SPM). Under the right circumstances, you can actually bill more units and, in turn, make more money using SPM.
If you’re young in the profession, you may not have heard of this method. Even if you’ve been a practicing clinician for a number of years, you may have neglected SPM to make life easier or you may have forgotten about SPM altogether due to how your company bills insurances. If you are a practice owner or in a managerial position, I encourage you to look further into SPM. Under the right circumstances, you can actually bill more units and make more money to protect your bottom line using SPM.
Rick Gawenda seminars: https://gawendaseminars.com/
CPT Assistant Book
Medicare claims processing manual, Chapter 5, section 20.2
Medicare pdf: “11 Part B Billing Scenarios for PTs & OTs”