Have you ever had a medical appointment that felt like it was over before it even began?
Let’s say a patient comes in with a seemingly simple issue. Their clinician asks a few questions and then rushes off to the next patient. The whole encounter took about five minutes. Meanwhile, another clinician at the same practice spends 20 minutes with a patient with a similar diagnosis, offering plenty of time to answer questions and offer personalized advice. Is it fair to bill the same amount for these two experiences?
Some health insurance payers, including Medicare, have ruled that it is, in fact, not fair. To avoid upcoding—essentially overcharging—for a time-based service, they presented the 8-minute rule.
Read on for a detailed explanation and tips on calculating billable units, along with a handy 8-minute rule cheat sheet.
What Is the 8-Minute Rule?
Medicare introduced the 8-minute rule in 1999 and fully adopted it in 2000. Put simply, the 8 minute rule dictates that healthcare providers must provide at least eight minutes of direct, face-to-face patient care to bill for one unit of a timed service. Anything less than that doesn’t qualify as billable time.
The rule exists to help ensure accurate and fair reimbursement for outpatient services, such as physical, occupational, and speech therapy.
How Does the 8-Minute Rule Work?
It can be frustrating—and downright confusing—to apply Medicare’s 8-minute rule, especially in combination with untimed codes. As a reference, you can use the 8-minute rule chart below to translate time spent with your patients to billable units:
Here are two ways to think about billing using the Medicare 8 minute rule:
- Long division. Take the total time (in minutes) spent with the patient and divide by 15, the standard time for one billable unit. Look at the whole number in the answer, and then count the remainder. If the remainder is 8 or more, add one unit to that whole number. For example, 23 minutes divided by 15 is 1 with a remainder of 8. That means you can add one more unit to the whole number 1, resulting in 2 total billable units. The tricky part is that you can’t use a standard calculator for this method since it won’t give you the remainder.
- Starting with eight. Another way to think about this is to use 8 as your base for one unit and add multiples of 15 for every consecutive unit. For example, two units begin at 8 + 15, or 23. Three units begin at 8 + 30, which is 38, and four units begin at 8 + 45, which is 53. In other words, you are still billing in 15-minute increments. But instead of starting the count at zero, you start at eight.
Understanding Time-Based vs. Service-Based Codes
Keep in mind that the 8-minute rule only applies to timed codes. Untimed CPT codes—or service-based codes—come with a set fee. You must charge that predetermined amount for the service, regardless of the time actually spent with the patient.
Let’s say you complete a physical therapy evaluation (code 97161) for 54 minutes and neuromuscular re-education (code 97112) for the same time. The evaluation uses a service-based code, meaning you ignore the time spent and charge the flat rate. However, the neuromuscular re-education uses a time-based CPT code, so you need to bill for four units.
8-Minute Rule Example Scenarios
The Medicare 8-minute rule is followed by all federal payers and some commercial payers. To avoid billing issues, it’s often a good idea to follow the 8-minute rule when a federal payer is primary, but also if that payer is secondary or tertiary.
Here are a few example scenarios of how you can use the 8-minute rule to bill Medicare for rehab therapy services:
- Physical Therapy. A physical therapist guides a patient through 33 minutes of therapeutic exercises to address a musculoskeletal condition. Divide 33 by 15 to get 2 with a remainder of 3. Since 3 is less than 8, you can’t add another billable unit — it’s just 2 units. Or you can think about it this way: If you recognize that 30 is 2 times 15, you can add the required base of 8 to see how many minutes are needed to reach the 3-unit range. The answer is 38, which is more than the time spent, so you can only bill for two units.
- Occupational Therapy. In a session focused on improving fine motor skills, a therapist works with the patient for 30 minutes. Applying the 8-minute rule, you divide 30 by 15 to get 2 with no remainder. So, you can bill for just 2 units.
- Speech-Language Pathology. For a speech-language pathology session addressing communication difficulties, the therapist works with a patient for 72 minutes. Divide that number by 15, which gives you 4 with a remainder of 12. Since 12 is more than 8, you can add another unit to 4 for a grand total of 5 billable units.
8-Minute Rule vs. The Rule of Eights
Don’t confuse the 8-minute rule for the Rule of Eights (also known as the “midpoint rule” or “Substantial Portion Methodology”). Though these billing rules are similar in name, there are important differences in how they should be applied.
At the basic level, these rules follow the same basic principle: Don’t charge for care that takes less than half of one standard 15-minute unit—or less than 8 minutes.
However, there are two main differences between the 8-minute rule and the AMA Rule of Eights:
Different payers. Besides Medicare, other federal and private insurers have officially adopted the 8-minute rule. The Rule of Eights, though, was introduced by the American Medical Association (AMA) and is now used by several private insurers.
How to calculate billable units. As mentioned above, the same basic principle of not charging for anything less than eight minutes applies to both rules. However, the 8-minute rule combines all time-based services for one patient before calculating the number of billable units. The Rule of 8s determines the billable units for each time-based service separately.
💯 Practical Advice
Keep in mind, there are additional options that may be used for specific payers, like MaineCare Partial Unit Rules, 5-minute thresholds, and no rounding rules.
Reducing Friction in PT, OT, and SLP Billing
Precision is critical to ensure fair reimbursement and compliance in the world of medical billing.
Understanding your payers’ rules is part of the job—but applying the rules doesn’t have to be such a time-consuming manual process. Specialized billing software can reduce friction and human error, helping your team capture revenue faster and more easily manage the complexity that comes with growth.
Here at Raintree Systems, we help physical therapy, occupational therapy, speech-language pathology and multi-disciplinary practices grow and succeed with scalable and robust software solutions. Raintree offers the only ONC-certified EHR system designed specifically for rehab therapy. Want to learn more? Schedule a demo and learn why high-growth PT, OT, SLP, and multi-disciplinary practices choose Raintree.
Maria Stearns is the VP of Operations RCM at Raintree Systems, where she oversees revenue cycle management processes and services for hundreds of providers across the US. She brings more than 10 years of experience in leading and managing operations in the medical practice industry, with a focus on improving efficiency, quality, and profitability.
Frequently Asked Questions
What are some common mistakes in calculating billable units?
Here are a few examples of common coding and billing mistakes:
Rounding instead of counting remainders when calculating units according to the 8-minute rule or the Rule of 8s.
Not accurately reporting time spent with patients, leading to discrepancies in your claims.
Purposefully spending more time with the patient to reach the next billable unit of time.
Including time spent on documentation rather than just one-on-one time with the patient.
Combining time- and service-based procedure times when calculating billable units.
Do other types of health insurance use the 8-minute rule?
In addition to Medicare, other federally funded insurance providers like TRICARE and Medicaid use the 8-minute rule. Some other commercial insurers have adopted it as well.
When does the 8-minute rule start?
Billing for the 8-minute rule requires at least 8 minutes of therapy service. If a therapist spends less than 8 minutes with a patient, that is not considered a billable unit.
Are there exceptions to the 8-minute rule?
Yes. The 8-minute rule does not apply to group therapy, complex cases, and service-based CPT codes. Some telehealth services may also be exempt, but it's essential to confirm on a case-by-case basis since rules on this have changed. And as we’ve mentioned, some payers do not use the 8-minute rule in favor of other billable unit calculations.
