Medicare Physical Therapy Claim and Reimbursement Analysis – How to create a profitable practice

Typical Physical Therapy Evaluation Date of Service from a Profitable Practice

My private practice has been a profitable practice since the first year of existence in 2002. In this article I will share publicly available data for Medicare physical therapy claims processed in 2022.

Let’s start with the most common CPT codes billed for a first time visit:

• 97161 Low Complexity Physical Therapy Initial Evaluation
• 97110 Therapeutic Exercise
• 97140 Manual Therapy

What usually happens during the first physical therapy visit?

The first visit is the initial evaluation and start of treatment. My practice Total Therapy Solutions LLC is a private practice that specializes in outpatient orthopedic care.

During the evaluation I focus on collecting the Medicare required information along with what may be required by my state practice act and what I believe is important to building a therapeutic alliance with my patient.

97161 Reimbursement in Ohio 2022

Here are screenshots of Medicare Part B Reimbursement Rates for physical therapy services delivered in Ohio. This information is public information and can be found on the CMS Physician Fee Schedule.

In the next three screenshots you will see how each line item processed for the claim described above.

In the first image you can see the initial evaluation CPT code 97161 was billed at a rate of $100.

Medicare is the primary insurance and paid $0 because the Medicare deductible was not satisfied for the calendar year.

The patient’s secondary insurance paid the full allowed amount of $98.60 leaving the patient with $0 out of pocket cost share.

The $1.40 with reason code 45 is the contractual adjustment between the $100 bill rate and the Medicare part B allowed amount for a participating provider. 

97110 Therapeutic Exercise Reimbursement in Ohio 2022

In the image below you can see Medicare paid $0 due to the Medicare deductible not be met for the calendar year. The CPT Code 97110 for therapeutic exercise was charged at $50 for a single unit of service. This is a single unit of CPT Code 97110 delivered on date of service 01/06/2022. You can see the contract adjustment was $21.03 and MPPR was $6.32. This patient’s secondary insurance paid the $22.65 balance and the patient had $0 responsibility.

97140 Manual Therapy Reimbursement in Ohio 2022

In the image below you can see the charge for CPT Code 97140 Manual Therapy was $50. Medicare paid $0 due to the Medicare deductible not being met, the secondary plan paid $21.17, the contract adjustment was $23.30 and the MPPR was $5.53.

In the following video I share an analysis of a physical therapy claim processed by Medicare in 2020.