Understanding Billing Units in Occupational Therapy: Definitions and Examples

As an occupational therapist, you have a range of responsibilities that extend far beyond patient care. Accurate billing in occupational therapy ensures that your patients receive quality services and your practice receives prompt compensation. The billing process in any medical field involves numerous complex hurdles, evaluation codes, insurance restrictions, state and local laws, and more.

You must file billing units alongside the traditional CPT codes in occupational therapy services. Billing units (occupational therapy applications) allow you to dictate more specificity regarding your therapeutic procedures.

When focused on therapy services, keeping up with the ever-changing medical documentation guidelines can feel overwhelmingly complex. Read on to learn everything you need to know about billing units in occupational therapy to maintain successful claims.

Understanding Occupational Therapy Billing Units

The billing process requires a few key components for successful claims:

• Documentation detailing the outpatient therapy services you provided
• The patient’s diagnosis code (ICD-10 code)
• Current Procedural Terminology (CPT) codes outlining the services or procedures provided
• Occupational therapy billing units providing the service duration
• The correct claim form, depending on the insurance company

Occupational therapy billing units are just one aspect of the claims submission process. However, you must understand what this coding mechanism is and how it differs from more basic medical status codes.

What Are Billing Units in Occupational Therapy?

Billing units are timed codes outlining how long you provided an occupational therapy service. Insurance companies determine reimbursement rates using billing units because patients may only be covered for a certain number of treatment minutes, depending on the type of therapy plan or service.

There are two main types of billing units that providers typically use: untimed and timed. You use untimed units for something like an initial evaluation where the service duration does not impact the number of units charged.

When using a timed code, you must follow the strict “8-Minute Rule,” where units begin at eight minutes, then progress in 15-minute durations. We will cover this in more detail below.

Billing Units vs. Billing Codes

Billing units differ from billing codes as CPT codes describe the type of service, procedure, or evaluation provided to the patient, while units define the duration of the service. Providers can combine both using timed CPT codes when the CPT code requires a duration, essentially requiring a billing unit attached to the code.

All healthcare industries have a wide range of codes covering just about every possible service, procedure, or evaluation, so we won’t cover them all here. Instead, we’ll discuss the most common types.

When billing untimed evaluations, providers may choose from three different evaluation codes:

• Low complexity (97165): Low complexity evaluations typically take 30 minutes to complete and may identify one to three performance deficits. The evaluation should describe a brief medical history, the patient’s medical record, and the primary complaint requiring service.
• Moderate complexity (97166): Moderate complexity evaluations can take 45 minutes and typically identify three to five performance deficits. The evaluation should include a more detailed record of the patient’s therapy history, including more factors regarding functional performance.
• High complexity (97167): High complexity evaluations can take 60 minutes and may identify five or more performance deficits and multiple treatment options. You must include a detailed assessment and the patient’s therapy history record regarding their functional status.

Another option for untimed evaluation codes is 97168, the re-evaluation code, which may be necessary during follow-up appointments if patient progress is made. The re-evaluation code may work for new clinical findings, treatment progression, and more.

Additional common billing codes that go beyond the initial occupational profile include the following:

97530: Therapeutic activity (one-on-one patient contact) to improve functional performance

97535: Self-care or home management training (compensatory strategies, meal prep, etc.)

97112: Neuromuscular re-education

97633: Sensory integrative techniques to promote adaptive responses

97110: Therapeutic procedures

97140: Manual therapy techniques

97113: Aquatic therapy

97150: Group therapy

Timed vs. Untimed Codes

As mentioned above, not all occupational therapy practice codes require time-based CPT codes. Understanding when to use a timed code at your occupational therapy practice can ensure you submit claims correctly.

Each CPT code has its stipulations regarding whether or not it needs a timed billing unit. Therapeutic exercises or a primary procedure will likely require billing units, while manual muscle testing during the initial appointment can fall under the untimed evaluation category.

Based on the Medicare benefit policy manual, insurance providers typically follow the 8-Minute Rule, where you must include a timed modifier of at least one unit for services provided for more than eight minutes. According to this Medicare Part B rule, services under eight minutes will not be billable.

After reaching the eight-minute threshold, the number of units you bill will progress in durations of 15 minutes:

• 1 unit: 8 to 23 minutes
• 2 units: 23 to 38 minutes
• 3 units: 38 to 53 minutes
• 4 units: 53 to 68 minutes
• 5 units: 68 to 83 minutes
• 6 units: 83 to 98 minutes
• 7 units: 98 to 112 minutes
• 8 units: 113 to 127 minutes

For example, if you provide 20 minutes of therapeutic exercise in the form of one-on-one patient contact, you would bill one unit. Remember that if you pause service during the treatment session to adjust machinery or perform other functions, the timing will also stop. CMS only accounts for constant attendance minutes of skilled therapy or one-on-one contact provided to the patient.

How Billing Units and Billing Codes Work Together 

When completing the billing process at your occupational therapy practice, you’ll need to use billing units and codes, as they work together to provide a full picture of your services.

Here is a basic overview of how billing units and billing codes work together each time you submit a claim for a patient:

1. Identification of Service (Identify Code): All patient appointments will include some form of service that you must identify to select the proper ICD-10 and CPT coding. ICD-10 codes will outline the patient’s diagnosis, while CPT numbers represent the services you provide to the patient based on their clinical needs.
2. Quantification of Service (Identify Unit): All services will fall into two quantification categories: timed and untimed codes. After identifying the provided services, you will quantify them using specific unit guidelines.
3. Billing statement creation (CPT Code + Unit): After identifying the billing unit for each service, the billing statement will include units with the codes, almost like modifiers.
4. Auditing and accountability (Code + Unit): The insurance company will review each claim to ensure that your documentation uses the correct codes and units, identifies session goals, outlines patient responses to the treatment, and addresses why the patient requires the treatment. Your billing department should conduct regular in-house audits to prevent denials.

The effective management of billing units and codes in occupational therapy practices is crucial for accurate claims submission, ensuring each service is correctly identified, quantified, and validated for successful insurance processing and financial accountability.

How To Use Billing Units in Occupational Therapy: A Therapeutic Exercise Example

Understanding how to use billing units in occupational therapy can seem overwhelmingly complex without a practical example. We will use a sample occupational profile to help you better understand the process.

Say you have a patient who has visited your office a few times and received their diagnosis. Now, the patient arrives weekly for 30-minute therapeutic activity sessions to work on improving their functionality. When you bill this patient, you do not need to enter an evaluation for each session, though you do need to add CPT and unit codes for the services provided and their duration:

1. Identification of Service (Identify Code): The primary service you provide for the patient falls under the umbrella of therapeutic activity, so you would use the code 97530.
2. Quantification of Service (Identify Unit): The patient arrived for a 30-minute activity session, which, according to CMS, counts as two billing units. For the sake of argument, say you spend three minutes preparing equipment, reducing your time spent providing clinical skills to 27 minutes. In this case, the activity session would still qualify for the same billing units.
3. Billing statement creation (CPT Code + Unit): Now, you would enter the 97530 code in the billing statement, then use the units field to indicate the two units provided to the patient.

The above is simply an example. For your patients, you will need to provide in-depth documentation regarding their medical history, treatment necessity, and more.

Staying Updated With Occupational Therapy CPT Codes and Billing Procedures

As an occupational therapy assistant, provider, practice owner, or billing professional, staying updated on the latest procedures will help you provide the best patient care while maintaining practice success. As regulations continue evolving, the top tips to keep in mind are as follows:

• Stay away from vague or general diagnoses
• Use your best clinical judgment when determining medical necessity
• Maintain a detailed occupational profile of patients
• Double- and triple-check patient information before submitting (name, birthdate, etc.)
• Check each insurer’s specific unit rules and billing requirements (not all providers follow the eight-minute protocol)
• Offer a clear, well-rounded picture regarding the patient’s history and treatment necessities
• Provide full documentation with all claims

Thorough documentation with accurate coding can help you keep a clean, successful claims record. At the same time, you must keep up with the frequent changes to coding requirements so you don’t miss new regulations.

Annual Updates and Changes for Occupational Therapists

Billing guidelines update frequently, making it challenging for your practice to stay current on the latest requirements. The dynamic nature of billing updates can quickly lead to high claim denial rates and payment delays that frustrate your patients and set your practice back. If you want to avoid these complexities, consider adopting a more automated, flexible solution that can take the manual work off of your staff’s hands, eliminating the potential for human error.

Streamline Your Billing Processes With Weave

Accurate billing is vital to your practice’s success and financial stability, so you must continue educating staff members on the ever-changing billing procedures. At Weave, we provide occupational therapy billing software that allows you to organize your patients’ information while automating the complex billing process in one unified platform.

Are you interested in streamlining your billing process? Get a demo today to see how Weave can transform your practice’s payment solutions.