Your Complete Guide to Medicare’s 8 Minute Rule

Medicare is known for its tough claim filing and reimbursement regulations. This federal agency necessitates strict adherence to its rules to provide proper patient care and compliance within the United States. 

The “Medicare 8 Minute Rule” is one example of such a regulation.

The 8-minute rule is Medicare’s way of billing outpatient services and physical therapy. Though it might sound simple enough, this rule can be tricky and lead to mistakes and denied claims. 

This is why we are here with this comprehensive guide on the Medicare 8-minute rule. In this cheat sheet, we will discuss this rule, how to calculate it, its examples, and what factors influence its reimbursement rate. 

So, without any further ado, let’s dive into the deets of this rule! 

What is the Medicare 8 Minute Rule?

Let us make you understand with a simple scenario.

Imagine a situation where a patient visits a doctor’s office for what seems like a simple issue. One doctor quickly asks a few questions and moves on within five minutes. Meanwhile, another doctor at the same practice spends a generous 20 minutes with a patient who has a similar diagnosis. They take the time to answer questions thoroughly and offer personalized advice. Is it fair for both encounters to be billed at the same rate?

Some health insurance providers, like Medicare, don’t think so. To prevent doctors from charging too much by exaggerating the time spent (known as upcoding), they have implemented something called the 8 minute rule therapy for time-based services.

So, this is how we can describe this rule: 

The 8-Minute Rule, which Medicare introduced in April 2000, plays a crucial role in how therapists get paid for their work. It ensures that therapists are compensated fairly based on the time they spend helping patients, specifically under certain CPT codes. This rule applies to various healthcare providers, including: 

• Private Practices, 
• Skilled Nursing Facilities, 
• Rehabilitation Centers, 
• Home Health Agencies offering Medicare Part B therapy at patients’ homes, 
• Hospital Outpatient Departments, including Emergency Rooms.

These providers follow the 8 Minute Rule when they bill Medicare for the services they render.

How Does the 8-Minute Rule Work?

Understanding and applying Medicare’s 8-Minute Rule can be really frustrating, especially when you have to deal with untimed codes as well. To make things easier, you can use the chart below. It helps you figure out how much time you spend with each patient in terms of billable units:

8-Minute Rule Cheat Sheet 

Still confusing, right? Here are two methods for calculating billing using the Medicare 8 minute rule:

Method of Division:

• Divide the total time spent with the patient by 15 (the standard time for one billable unit).
• Take the whole number part of the quotient and note the remainder.
•  If the remainder is 8 or more, add one unit to the whole number part.
• For instance, if you spent 23 minutes (23 ÷ 15 = 1 remainder of 8), you would add one unit to the whole number 1, resulting in 2 billable units. Note that a standard calculator cannot be used for this calculation due to its inability to display the remainder.

Starting with Eight:

• Use 8 as the starting point for the first billable unit.
• Add multiples of 15 for each subsequent unit.
• For example, the second unit starts at 8 + 15 = 23 minutes, the third unit starts at 8 + 30 = 38 minutes, and the fourth unit starts at 8 + 45 = 53 minutes.
• This method maintains billing in 15-minute increments but begins counting from 8 instead of 0.

Understanding Time-Based vs. Service-Based Codes

As we mentioned before, Medicare 8 minute rule is only applicable to timed codes (constant attendance). Service codes, also known as untimed CPT codes —- come with a set fee. 

8-Minute Rule Example Scenarios

Here are explanations of how the 8-minute rule applies in different therapy scenarios:

1. Physical Therapy Example

Imagine a physical therapist guiding a patient through 33 minutes of therapeutic exercises for a musculoskeletal issue. According to the 8-minute rule, they divide the total time by 15 (the billing unit). Here, 33 minutes divided by 15 equals 2 units with a remainder of 3 minutes. Since the remainder is less than 8 minutes, they can bill for only 2 units.

2. Occupational Therapy Example

During a session focused on improving fine motor skills, a therapist works with a patient for 30 minutes. Applying the 8 minute rule, they divide 30 by 15, which equals 2 units with no remainder. Therefore, they can bill for 2 units.

3. Speech-Language Pathology Example

For a speech-language pathology session addressing communication difficulties, let’s say the therapist spends 72 minutes with a patient. Dividing 72 by 15 gives 4 units with a remainder of 12 minutes. Since the remainder (12 minutes) is greater than 8 minutes, they can add another unit to the 4 already calculated, resulting in billing for a total of 5 units.

Calculating Physical Therapy Units As Per The Medicare 8 Minute Rule

To calculate the accurate number of physical therapy units per billing, you need to follow the following steps: 

Step 1: Add all the time spent on timed services to determine the total number of billable units. 

Step 2: Now separate each whole 15-minute unit by CPT code. For instance, 2 units of 97761 would equal 30 minutes. 

 Appropriate Billing Modifiers

Here are the modifiers that impact the reimbursement for 8-minute rule physical therapy. 

Billing with Mixed Remainders

Billing with mixed remainders involves managing leftover minutes from different billing codes. Here’s an example scenario:

• Manual Therapy (97140): 21 minutes
• Gait Training (97116): 17 minutes

Steps to bill correctly:

1. First unit for each code: 97140 (15 minutes), 97116 (15 minutes)
2. Remaining minutes: 6 minutes (97140), 2 minutes (97116)
3. Combine remaining minutes to bill an additional unit of 97140

Management and Assessment Time

Therapists can bill for patient management, assessment, and education time if provided one-on-one. Here are some billable activities:

• Assessing response to interventions
• Educating patients on self-care
• Answering patient inquiries
• Documenting in the patient’s presence

Pro Tips for Smooth Compliance with the 8 Minute Rule

• Regularly train and educate staff.
• Maintain comprehensive documentation practices and perform regular audits.
• Stay updated on changes in physical therapy billing standards and CMS revisions.
• Seek guidance from consultants or industry experts for complex billing situations.

What PTs, OTs, And SLPs Need To Know About This

In the complex world of medical billing, accuracy is crucial for ensuring correct reimbursement and adherence to regulations.

Understanding the specific rules of your payers is essential, but implementing these rules doesn’t have to be a burdensome, manual task. Advanced billing software can streamline processes, reducing friction and minimizing human errors. This efficiency allows your team to optimize revenue capture and effectively manage business expansion’s complexities.

At Physician Billing Company, we specialize in empowering physical therapy, occupational therapy, speech-language pathology, and multi-disciplinary practices with scalable and robust software solutions. Our ONC-certified EHR system is uniquely designed for rehab therapy, supporting growth and success in diverse clinical settings.

Interested in discovering more? Schedule a demo to explore why high-growth PT, OT, SLP, and multi-disciplinary practices trust Physician Billing Company for their operational needs.

8-Minute Rule vs. The Rule of Eights

Let’s compare the 8-minute rule and the Rule of Eights to understand their differences and how they affect billing:

The 8-minute rule and the Rule of Eights share a similar principle: they prevent billing for care lasting less than half of a standard 15-minute unit, which is less than 8 minutes.

However, they differ in two key ways:

1. Coverage by Insurers

The 8-minute rule is accepted by Medicare and some private insurers, while the Rule of Eights originated from the American Medical Association (AMA) and is used by various private insurers.

2. Calculation of Billable Units

Under the 8-minute rule, all time spent on services for a patient is combined before determining billable units. In contrast, the Rule of Eights calculates billable units separately for each time-based service.

Practical Advice:

It’s important to note that specific insurers may have additional billing options, such as MaineCare’s Partial Unit Rules, thresholds for billing at 5-minute increments, and rules prohibiting rounding of billable time.

Other Types of Health Insurance that Use the 8-Minute Rule

The 8-minute rule isn’t limited to Medicare alone. It applies to various federally funded plans, including:

• Medicaid
• TRICARE
• CHAMPUS (Civilian Health and Medical Program of the Uniformed Services)

Additionally, some commercial health insurance plans also adhere to the 8-minute rule. For in-person outpatient services, Medicare mandates compliance with this rule, leaving providers with no alternative billing method choice.

Exceptions to the 8-Minute Rule for Medicare Services

Exceptions to the 8-Minute Rule exist specifically for Medicare services. This rule applies only to direct, one-on-one outpatient services, excluding group therapy sessions. Additionally, certain telehealth services may not adhere to the 8-minute rule, but it’s advisable to confirm with your healthcare provider.

In some cases, healthcare providers can bill for additional time spent if a service requires more than the assigned time frame. However, if all allocated minutes for your outpatient service are not utilized, Medicare does not permit providers to bill for unused time.

Impact of the 8-Minute Rule on Patients

The 8-minute rule can impact Medicare beneficiaries by potentially limiting their access to certain outpatient services, particularly therapy sessions. Providers may restrict session durations or prioritize patients needing at least 8 minutes of continuous one-on-one care due to these billing regulations.

Cost Considerations for Patients Under Medicare’s 8 Minute Rule

If you have Original Medicare (Part A and Part B), you are responsible for paying up to 20% of coinsurance costs for Part B outpatient services. However, if you have a Medicare Supplement (Medigap) plan, your out-of-pocket expenses could be lower, depending on the specific plan you have.

Medicare Advantage plans (Part C) operate under different billing structures. While the 8-minute rule applies to services for MA beneficiaries, your out-of-pocket costs may vary based on your plan’s coverage and network restrictions.

AMA’s Rule of Eights vs Medicare’s 8-Minute Rule

The American Medical Association (AMA) has its own billing guideline known as the “Rule of Eights,” which mandates at least 8 minutes of direct one-on-one treatment per CPT code to bill a unit. Unlike CMS (Centers for Medicare & Medicaid Services), which combines time across all services, the AMA requires separate time calculations for each specific code.

For example:

If a session includes 8 minutes of therapeutic exercise (97110) and 8 minutes of manual therapy (97140):

Under the AMA Rule of Eights:

• 1 unit of 97110
• 1 unit of 97140

Under the CMS 8-Minute Rule:

• Only 1 unit can be billed, as the total time of 16 minutes is aggregated across both codes.

The Complexity of Medicare’s 8 Minute Rule for Therapists: How PBC Can Help

Handling Medicare’s 8-Minute Rule poses challenges and risks for therapists. Incorrect billing can lead to reduced payments or penalties for overbilling, creating a dilemma for practitioners.

However, there’s a straightforward solution. PBC, with its expert medical billing team, has mastered the complexity of Medicare’s 8 Minute Rule. Our highly trained professionals ensure precise unit submissions, safeguarding your payments and compliance.

Curious to see how we can help? Schedule a free demo to witness our effective approach in action. We will guide you through maximizing your claims under Medicare’s 8-Minute Rule, ensuring you receive optimal reimbursement for each service provided.