If you plan to treat Medicare or Medicaid patients, you must clear every CMS credentialing requirement first. Skip a step and you risk landing on the dreaded “red list,” which means zero reimbursement. Relax, though: credentialing is not rocket science. Think of it as brewing your morning coffee—simple, but you still need the right steps.

In this guide, you will learn about:

• Provider enrollment basics (PECOS, CMS-855I, CMS-855B)
• Medicare and Medicaid credentialing checklists
• Telemedicine credentialing rules for virtual visits
• Delegated credentialing and how large groups speed things up

As a medical billing specialist, I have helped thousands of clinics move from pending to paid status without a single denial. You can do the same. Follow along and see how to:

• Build a spotless CAQH profile
• Avoid common credentialing denials
• Keep your NPI linked to the correct taxonomy code
• Meet every re-credentialing deadline

Have questions like “How do I join Medicare as a new provider?” or “What is the fastest way to update PECOS?” They are answered here. By the end, you will know exactly what CMS expects, which forms to file, and how to stay on the green list so your healthcare claims get paid in full and on time.

CMS Credentialing Requirements for Healthcare Providers in the USA

CMS (Centers for Medicare & Medicaid Services) credentialing requirements refer to the processes and standards that healthcare providers must meet in order to be approved for participation in Medicare and Medicaid programs. 

Some of the basic requirements are:

1). Obtain Your National Provider Identifier (NPI)

The initial step in the CMS credentialing process is obtaining your NPI number. It is a 10-digit identifier utilized for all healthcare billing, including payment for Medicare and Medicaid. You will not be able to send in or get reimbursed for any claims if you do not have it.

Application for your NPI is possible through the National Plan and Provider Enumeration System (NPPES). The application involves basic information such as your name, practice address, tax ID, contact information, license, and credentials.

The majority of healthcare professionals register for the NPI first, since they will also require it during later PECOS registration and CMS enrollment.

Having an NPI is among the most usual prerequisites for any medical billing operation. It ensures that CMS and payers are able to track who is offering the services, particularly for specialties such as family medicine, behavioral health, or physical therapy.

2). Ensure Your License is Current and Validated

You will need a current and unrestricted license to practice in the state in which you will be treating patients. CMS will not accept an expired or restricted license, and they will check for this information when you are enrolling.

Depending on your provider type, you may also be asked to furnish proof of board certification or further training. For instance, some positions, such as cardiologists or nurse anesthetists, will require additional credentials.

The CMS also cross-checks the Office of Inspector General (OIG) List of Exclusions. In case you have participated in healthcare fraud, abuse, or other disqualifying conduct, you will be excluded from participation in Medicare. This is done to make sure that nothing but eligible health care providers are permitted to charge Medicare and Medicaid.

3). Fill out the CMS Enrollment Forms or Use PECOS

Once your licensure and NPI are verified, the following step is to formally enroll in Medicare. You may do this by filing the respective CMS-855 form or by enrolling online through PECOS, or Provider Enrollment, Chain, and Ownership System.

Every form has a particular function:

• Individual healthcare providers, such as physicians, therapists, and nurses, use CMS-855I.
• The CMS-855B is utilized for group practices and clinics.
• CMS-855A is for institutional providers, including hospitals and nursing facilities.
• CMS-855R is for reassigning Medicare benefits to an entity, such as a group or an organization.

PECOS is the most popular choice among providers as it enables quicker submission and immediate tracking of application status. Filing the incorrect form or omission of documentation will hold up your credentialing process by a great deal, hence you need to do this step with care.

4). Credentialing by a Medicare Administrative Contractor (MAC)

During CMS enrollment, every provider passes through a Medicare Administrative Contractor for review. A MAC is a private firm that manages Medicare enrollment, handles claims processing, and verifies provider credentials within its region.

A MAC checks your forms, confirms your license, and makes sure every supporting document is in place. If something is missing, you receive a request for more information instead of a flat denial. Processing times vary by region, so keep local timelines in mind.

When the MAC approves your file, CMS issues a Provider Transaction Access Number (PTAN). You will need this PTAN whenever you submit Medicare claims or update your record in PECOS.

Smooth MAC credentialing sets the stage for trouble-free billing with Medicare beneficiaries.

5). Medicare Participation Agreement

After credentialing, CMS asks you to sign a Medicare Participation Agreement. This short contract spells out what you agree to when you treat Medicare patients.

• You follow all CMS regulations, including coding rules, reimbursement limits, and fraud-prevention policies.
• You accept the Medicare fee schedule as full payment, except for allowed coinsurance or deductibles.
• You send clean claims on time and bill only for medically necessary services.
• You maintain quality-of-care standards, which CMS may audit through its quality reporting programs.

Once the agreement is on file, you can begin seeing Medicare patients and submitting electronic claims without delay.

6). Ongoing Compliance with Federal and State Rules

CMS approval is not the finish line. Providers must stay current with both federal regulations and state requirements to keep billing privileges active.

➜ Federal rules

• Medicare Conditions of Participation (CoPs) and Conditions for Coverage (CfCs)
• HIPAA privacy and security safeguards
• Policies in the Affordable Care Act that affect provider enrollment
• Current CMS billing and coding guidelines

These standards apply to physicians, therapists, hospitals, home health agencies, and every other Medicare-enrolled entity.

➜ State rules

• Professional licensure laws require an active, unrestricted license in each state where you practice.
• Scope-of-practice statutes limit which services your license allows you to perform.
• Each state Medicaid program has its own enrollment steps that build on federal guidance.
• Managed Care Organizations (MCOs) may add extra credentialing checks before they will contract with you.
• State privacy laws, such as California’s CCPA, can be stricter than HIPAA.
• If you deliver telehealth, you must follow every state’s telemedicine and cross-state licensure rules.

Meeting these federal and state obligations helps you avoid claim denials, overpayment recoupments, and potential exclusion from government programs.

7). Clear Background Check

CMS only accepts providers whose records are clean. During both initial credentialing and the three-year recredentialing cycle, CMS runs a background check that looks at professional qualifications, criminal history, and any past Medicare fraud or abuse. Failing this review can delay or deny enrollment, revoke billing privileges, and trigger legal or financial penalties.

What CMS reviews:

• Criminal convictions at the federal or state level
• Medicare and Medicaid exclusion lists
• License status plus any disciplinary actions
• Malpractice claims and settlements
• Education, training, and residency verification

8). Malpractice Insurance Requirements

Every provider must carry active malpractice (professional liability) insurance to protect patients and themselves against errors or negligence claims. CMS checks coverage at enrollment, at recredentialing, and during random audits.

• Most plans require at least one million dollars per claim and three million dollars aggregate each year, although limits can vary by state or specialty
• A current Certificate of Insurance (COI) must list the insured name, policy number, coverage dates, limits, and carrier
• Providers changing jobs or retiring may need tail coverage to insure prior acts

Without proof of adequate coverage, CMS can deny enrollment or terminate participation.

9). Meeting CMS Quality Standards

CMS expects all enrolled professionals and facilities to deliver safe, effective, and high-quality care. Compliance is also tied to value-based payment models.

Key quality checkpoints:

• Adhering to Medicare Conditions of Participation (CoPs) and Conditions for Coverage (CfCs)
• Reporting through MIPS if eligible
• Tracking and submitting Clinical Quality Measures (CQMs)
• Failure to meet these benchmarks can reduce reimbursement or trigger corrective action plans.

10). Provider-Specific Rules

CMS tailors requirements to the provider’s role.

• Pharmacists, physician assistants, and other non-physician practitioners may need proof of specialty certification or documented supervision
• Telemedicine professionals must hold a valid license in each state where patients are located and meet state-specific virtual-care rules

11). Additional Certifications CMS May Require

Depending on services offered, you might need extra credentials alongside standard Medicare enrollment.

12). Site Visits and Operational Standards

CMS may conduct on-site inspections during initial enrollment, revalidation, or whenever red flags arise. Inspectors confirm that:

• The office address on your application physically exists and matches signage
• Posted hours are accurate and staff are present
• Patient-care areas, record storage, and equipment meet health and safety rules
• Policies align with HIPAA, infection control standards, and local building codes

Passing the site visit proves that your practice is real, operational, and ready to serve Medicare and Medicaid beneficiaries.

CMS Telemedicine Credentialing Requirements

Telemedicine follows the same core CMS enrollment rules as in-person care, yet it adds a few extra layers that reflect the unique, screen-to-screen setting. Providers who plan to deliver virtual visits to Medicare or Medicaid patients must meet each standard below to secure reimbursement and avoid claim denials.

Here are the key CMS telemedicine credentialing requirements:

Provider Enrollment

• Complete the correct CMS-855 application and choose the telemedicine service type when prompted.
• Submit your National Provider Identifier (NPI), proof of active license, malpractice coverage, and any state-specific forms.
• Keep your information current in PECOS so payers can verify your status before processing remote-care claims.

Licensure Across State Lines

• Hold an active license in the state where the patient sits during the visit, even if you live elsewhere.
• Many providers rely on the Interstate Medical Licensure Compact or similar nursing and psychology compacts to speed up multi-state approval.
• Track renewal dates carefully; an expired out-of-state license can halt payment for every virtual visit.

HIPAA-Compliant Technology

• Use a HIPAA-compliant telemedicine platform for video, chat, and file sharing.
• Encrypt data in transit and at rest, maintain audit logs, and restrict user access to the minimum necessary.
• Provide patients with the standard Notice of Privacy Practices that explains how their data is stored and shared.

State and Federal Telemedicine Rules

• Follow your state’s practice standards, prescribing limits, and modality restrictions for virtual care.
• Some states enforce payment parity laws that require commercial plans to cover telehealth at the same rate as face-to-face visits; CMS often mirrors these rules for Medicaid.
• Document each visit just as thoroughly as an in-office encounter, including location of patient and provider.

Patient Consent

• Obtain informed telehealth consent before the first virtual session of the patient.
• Explain how the service works, any technology risks, and steps taken to secure data.
• Keep a signed or electronically acknowledged consent form on file, as CMS may request it during audits.

Supervision and Delegation

• If nurse practitioners, physician assistants, or other clinicians deliver remote care, meet CMS and state supervision or collaboration requirements.
• Clearly outline who can provide which services, how oversight is documented, and how escalation to a supervising physician occurs.

CMS Delegated Credentialing Requirements

Sometimes a health plan or large provider group lets a separate entity handle day-to-day credentialing. This is known as delegated credentialing and it comes with its own set of CMS rules. Even when the work is handed off, the original organization is still responsible for meeting every CMS standard.

Here are the key CMS delegated credentialing requirements:

Formal Delegation Agreement

A clear, written agreement must be in place before any work starts. The document should

• list every task the delegate will complete, such as primary-source verification or final credentialing decisions
• spell out performance targets and how results will be reported
• describe how the delegating organization will monitor, audit, and if needed, cancel the arrangement
• require the delegate to follow NCQA or an equivalent set of credentialing standards when the health plan is NCQA-accredited

Oversight and Accountability

The health plan—or other delegating group—keeps full responsibility for compliance. To show CMS that proper oversight exists, the plan must

• review and approve the delegate’s policies and procedures before work begins
• audit the delegate, usually once a year, to confirm rules are being followed
• maintain written records of every review, audit, and corrective action
• step in quickly if audits reveal non-compliance

Credentialing Standards to Maintain

The delegate has to apply all routine credentialing checks, including primary-source verification of

• active state license and any required specialty license
• DEA certificate if the provider prescribes controlled substances
• board certification when the specialty calls for it
• education, training, and recent work history
• current malpractice insurance with adequate limits
• sanctions, disciplinary actions, and the OIG exclusion list

These safeguards ensure every provider in the network is licensed, competent, and in good standing.

Revoking or Correcting Delegation

If audits show that credentialing standards are not met, the health plan must

• issue a corrective action plan with clear deadlines
• revoke the delegation if problems persist
• resume direct credentialing in-house or choose a new, compliant delegate

By keeping a close eye on every delegated activity, the health plan protects patients and stays aligned with all CMS credentialing regulations.

FAQs

What is CMS credentialing and why does it matter?

CMS credentialing is the process that confirms a provider’s identity, professional qualifications, and compliance record before allowing Medicare or Medicaid billing. Without it, claims will be rejected and you cannot treat covered patients.

Which core documents do I need to start a CMS application?

You will need an active state license, National Provider Identifier (NPI), malpractice insurance certificate, work history, education and training records, and a completed CMS-855 application (or the PECOS online equivalent).

How long does initial credentialing for CMS usually take?

Most clean applications pass through a Medicare Administrative Contractor in thirty to ninety days. Missing paperwork, pending license renewals, or background issues can extend the timeline.

How often must I complete CMS recredentialing or revalidation?

CMS requires recredentialing every three years for all enrolled providers. A separate revalidation notice can arrive sooner if you move, change ownership, or trigger other risk factors.

What is the difference between a CMS-855 paper form and PECOS?

CMS-855 is the paper enrollment packet. PECOS is the secure online portal that lets you fill out the same information electronically, upload documents, and track your application status. Use one method per enrollment cycle.

Can my practice delegate CMS credentialing to a Credentialing Verification Organization (CVO)?

Yes. A formal delegation agreement must spell out the CVO’s duties, performance standards, audit schedule, and termination clauses. Even with delegation, your organization remains accountable for meeting every CMS rule.

Does CMS perform site visits and why?

Yes. CMS or its contractor can conduct a site visit during initial enrollment, revalidation, or when they detect billing anomalies. Inspectors verify that the listed address exists, hours are posted, staff are present, and records are secure.

Do I need a separate state license for each location where patients are treated, including telehealth?

Yes. You must hold an active license in every state where the patient is located at the time of service. This applies to both in-person care and telemedicine appointments.

When Medicare sneezes, healthcare providers catch a cold!

First came the sequester. Then came MACRA. Now, healthcare providers are getting ready for what could be the biggest round of cuts to Medicare yet; these cuts are likely to happen in 2025. Since the Medicare trust fund is supposed to run out by 2036, big changes are likely to happen.

As providers get ready for what 2025 will bring, this coming change makes them uncomfortable and excited at the same time.

This blog will talk in depth about the Medicare cuts that are coming in 2025, based on the best and most correct predictions.

Medicare Reimbursement Cuts Coming In 2025

The Centers for Medicare & Medicaid Services (CMS) has suggested a new decrease in the Medicare Physician Fee Schedule (MPFS) conversion factor for 2025. If this is put into action, the conversion factor will go down from $33.29 to $32.36, leading to a 2.8% reduction in payments to doctors. This new cut comes after a 1.68% decrease in 2024 and a 2% decrease in 2023. This is the fifth year in a row that healthcare providers who serve Medicare patients have seen their payment rates go down.

Budget cuts are not liked by many people, but there are good reasons for both sides of this topic.

Reducing Medicare spending might help lower the national debt and make the program more financially stable in the future. But, these cuts also make it harder for doctors to manage the increasing costs of running a medical office.

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“We must protect Medicare for future generations, but not at the expense of those it serves today.”

On one hand, Medicare does need to reduce spending to remain financially viable. As more Baby Boomers age into the program, costs continue to rise. Some cuts are reasonable to keep Medicare sustainable.

However, continual cuts also jeopardize seniors’ access to care. Many doctors now refuse new Medicare patients due to low reimbursements. Others have been forced to join large health systems and limit visit time to make up for losses. Quality of care suffers.

Perhaps the answer lies in a balanced approach. Instead of blanket cuts, reforms could target inefficiencies and waste while protecting access. For instance, paying doctors for providing coordinated, high-value care instead of fee-for-service. Or allowing Medicare to negotiate drug costs. We need bipartisan solutions that address cost drivers while maintaining quality.

Comparison of Medicare Cuts from 2020 to 2025

In recent years, Medicare reimbursement rates have gone down, which has caused a lot of worry among healthcare providers. To see how these cuts will affect things, let’s look at how things changed from 2020 to 2025.

Medicare Conversion Factor Reductions (2020-2025)

The Medicare conversion factor is an important number that helps decide how much money doctors and healthcare providers get paid. This is a yearly list of the Medicare conversion factor and the percentage cuts for each year:

2020 Conversion Factor — $36.09

Example Calculation: If a provider was reimbursed $100 for a service in 2020:

2021 Conversion Factor — $34.89

Example Calculation: If the same service was reimbursed in 2021:

2022 Conversion Factor — $34.61

Example Calculation: If the same service was reimbursed in 2022:

2023 Conversion Factor — $33.89

Example Calculation: If the same service was reimbursed in 2023:

2024 Conversion Factor — $33.29

Example Calculation: If the same service was reimbursed in 2024:

2025 Conversion Factor — $32.36 (Proposed)

Example Calculation: If a provider is reimbursed $100 for a service in 2025:

Summary of Impact

Between 2020 and 2025, the conversion factor is expected to go down from $36.09 to $32.36. This means a total decrease of about 10.3%. This decrease shows a continuing pattern of lower payment rates even though the costs of providing healthcare are going up.

➜ In 2020, a service paid at $100 would receive $100.

➜ By 2025, the same service would be reimbursed at approximately $89.70, representing a 10.3% reduction over five years.

These cuts have a big impact on healthcare providers, especially those working in expensive or rural areas. The ongoing drop in payment rates, while practice costs keep going up, adds to the money problems many medical practices are experiencing.

Reactions from the Healthcare Community

Medicare payments have gone down by about 29% since 2001 when we consider inflation. This is a big problem for many medical practices.

Dr. Bruce A. Scott, the president of the AMA, said that the Medicare Economic Index (MEI), which looks at the cost of running a practice, is expected to go up by 3.6% in 2025. This will make the difference bigger between what doctors are paid and the real cost of giving care.

Doctors in rural areas and those helping low-income communities are especially at risk. They usually work with less money and deal with more difficulties in their operations.

Groups like the American Medical Association (AMA), Premier, Medical Group Management Association (MGMA), American Academy of Family Physicians (AAFP), National Association of Accountable Care Organizations (NAACOS), and Society for Cardiovascular Angiography & Interventions (SCAI) spoke out against the rule soon after CMS announced it.

The American Medical Association (AMA) is very worried about these budget cuts. They say these cuts could make it harder for older people to get good medical care, especially in areas that do not have enough services, like rural places.

The Medicare Payment Advisory Commission (MedPAC) has warned that these cuts might reduce access to care for people on Medicare, making current healthcare access problems worse.

This year, the Medicare Economic Index (MEI), which measures the increase in practice costs, is 3.6%. The AMA and the Medical Group Management Association (MGMA) have spoken out against the proposal, noting that this is the fifth consecutive year that Medicare payments have been lowered. The cut is now even more “short-sighted.” These organizations are working in the US House of Representatives for a bipartisan bill. This bill would connect the MEI to a yearly pay update based on inflation.

Also, when healthcare workers have to deal with high costs while doing their jobs, their situation becomes very difficult. In 2024, the costs to operate have increased compared to 2023. They will feel even more frustrated about the upcoming Medicare payment cuts in 2025.

Changes in the Medicare Fee Schedule from 2020 to 2025

The Medicare Fee Schedule (MFS) helps decide how much money is paid for services given to people who have Medicare. It is a system with several important parts:

Relative Value Units (RVUs) – RVUs are important in the MFS. They show how valuable each service is compared to others. RVUs take into account the physician work required, practice expenses, and malpractice costs associated with a service. Services that are more complicated and take more time have higher RVU values.

Geographic Practice Cost Indices (GPCIs) – GPCIs are adjustments made based on location to consider differences in costs in different areas. There are separate GPCIs for the work component, practice expense component, and malpractice component of RVUs. Places where it costs more to run a medical practice have higher GPCI numbers.

Conversion Factor – The conversion factor is a dollar amount. It is multiplied by the RVU to find out the final Medicare payment amount. It changes the relative values into real payment amounts. The conversion factor is changed every year by CMS.

The following are the changes in the Medicare Fee Schedule from 2020 to 2025:

2020 Fee Schedule

2021 Fee Schedule

2022 Fee Schedule

2023 Fee Schedule

2024 Fee Schedule

2025 Fee Schedule (Proposed)

Impact of Medicare Cuts on Patient Care

Medicare cuts affect patients in many ways, some obvious and some not so obvious. Even if budget cuts look small on paper, they can have serious effects on people who depend on Medicare services.

As one older patient said,

“These Medicare cuts have made it more difficult for me to get the care I need. I have had to miss doctor appointments and reduce my medicine because of high prices.”

This part will look at how Medicare cuts affect people and what it means for patient care:

Minimized Access to Services

Medicare payment cuts can make it much harder for patients to get medical care. Many providers, especially those in rural or underserved areas, may limit the number of Medicare patients they take on as payment rates go down. This drop in services can make Medicare recipients have to wait longer and have less access to care.

Poor Quality of Care

Medicare reimbursement rates are still declining, which may force providers to make cost-cutting decisions that could lower the standard of care provided. Due to lack of money, staff may be cut, patient care resources may be limited, or investments in new technologies may be lowered. These changes could affect how patients feel and how well they get care generally.

Increased Out-of-Pocket Costs

With Medicare payments decreasing, some providers might shift the burden of costs to patients, resulting in increased out-of-pocket expenses. This shift can affect Medicare beneficiaries’ ability to afford necessary treatments, potentially leading to delayed or foregone care.

For example, a primary care provider who is getting paid less might charge Medicare patients higher co-pays or deductibles, which would make it harder for those patients to pay for their medical bills.

Financial Tips for Providers after Medicare Payment Cuts

Medicare payment cuts are a constant worry for healthcare providers everywhere in the country. But succumbing to panic or despair won’t solve anything. Instead, take action to improve your practice’s finances. In this section, we’ll look at practical ways to lessen the impact of Medicare payment cuts. There are several ways to increase your bottom line, from cutting back on wasteful spending to thinking about different payment choices.

Medicare cuts will be difficult, but they don’t have to be a disaster. With smart money planning, you can keep providing great care and protect your practice from financial problems.

Let’s explore simple solutions to be prepared and succeed despite lower Medicare payments.

Applying Money-Saving Techniques

Healthcare providers can reduce the effects of Medicare cuts by using money-saving strategies. Ways to improve include negotiating payer contracts, making office work easier, and cutting down on extra costs. Taking these steps can help reduce the financial stress from lower payments.

Finding Different Ways to Make Money

Finding additional ways to make money is another plan for providers. This could mean providing extra services that Medicare does not cover or moving into markets that do not use Medicare. Diversification can make revenue more stable and lessen reliance on Medicare payments.

Integrating Technology

Technology investments can increase operational effectiveness and lower expenses. For example, using electronic health records (EHRs) or telemedicine platforms can make work easier and reduce costs for administration. These technologies can help make patient care and practice management better.

For example, a medical practice can use a telemedicine platform. This helps reduce the need for patients to visit in person. It can lower costs for the facility and make it easier for more patients to get care.

Collaborating with Provider Support Groups

Professional groups are very important in pushing for changes to Medicare rules. Groups like the American Medical Association (AMA) and the Medical Group Management Association (MGMA) aim to affect policy choices and deal with provider issues. Providers should connect with these groups to get updates and join in advocacy activities.

Participating in Advocacy

Many laws are being worked on to fix problems with Medicare payments. New bills and negotiations are trying to change how payments work and make it easier for providers financially. Knowing about these efforts can help providers see possible changes and get involved in advocacy. Doing these activities helps make the voices of healthcare providers stronger and can result in better policy results.

For example, providers can join advocacy groups to support laws that connect Medicare payments to inflation. This helps make reimbursement rates more stable and fair.

BellMedEx Can Keep Your Practice Profitable Despite Medicare Cuts

Medicare cuts got you down? Take back control with our medical billing services. We’ll boost your private payer rates so Medicare cuts hurt less. Expert coders get you max, denial-free reimbursements fast. Schedule a free analysis and stop worrying about Medicare cuts today!

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Thanks to BellMedEx, our billing reimbursement is at its highest!

Dr. Esther

Counselor, Mental Health Clinic

Top Features

✓ Medical Billing
✓ High Rate Negotiation
✓ Revenue Cycle Management

One such regulation is the “Medicare 8-Minute Rule”.

This rule can easily trip you up despite its straightforward name, leading to miscalculations and denied claims.

That’s why we’re here to guide you through the complexities of the Medicare 8-Minute Rule, empowering you to confidently and accurately bill for your therapy services.

What is the 8-Minute Rule?

The 8-Minute Rule was introduced by Medicare in April 2000. This rule determines how long a therapist needs to work to get paid. It is a way for the government healthcare system, Medicare, to make sure therapists are properly paid for the time they spent helping patients. The Medicare 8-Minute Rule applies to time-based CPT codes only.

The following outpatient providers follow the 8-minute Rule when billing Medicare for their services:

• Private practices
• Skilled nursing facilities
• Rehabilitation facilities
• Home health agencies providing therapy covered under Medicare Part B in the home of the beneficiary
• Hospital outpatient departments (including emergency)

Timed vs. Service-Based CPT Codes

CPT (Current Procedural Terminology) Codes are standardized codes healthcare professionals use to report various medical services and procedures.

In therapy services, these codes are categorized into two main types:

• Service-Based Codes
• Time-Based Codes

To successfully apply the 8-Minute Rule, you must understand the differences between service- and time-based CPT codes.

➜ Time-Based Codes

Time-Based Codes, often called “Timed Codes,” are billed based on 15-minute units. The actual billing is determined by the number of units provided. For instance: 1 unit = 15 minutes ; 2 units = 30 minutes ; 3 units = 45 minutes.

Examples of Time-Based CPT Codes

• Manual Electrical Stimulation (97032) – Application of electrical stimulation with manual assistance.
• Ultrasound (97035) – Application of therapeutic ultrasound.
• Gait Training (97116) – Training for walking or ambulation, including stair climbing.
• Therapeutic Exercise (97110) – Exercises aimed at improving strength, endurance, and flexibility.
• Manual Therapy (97140) – Hands-on therapy techniques such as joint mobilization and manipulation.
• Neuromuscular Re-education (97112) – Activities that help restore balance, coordination, posture, and kinesthetic sense.
• Self-Care/Home Management Training (97535) – Training for daily living skills and activities.
• Prosthetic Training (97761) – Training for the use of prosthetic devices to improve functionality.
• Physical Performance Test or Measurement (97750) – Evaluation of physical performance through testing.

➜ Service-Based Codes

Service-Based Codes are billed only once per session, irrespective of how long the session or procedure takes. The cost remains fixed regardless of whether the procedure took 10 or 40 minutes.

Examples of Service-Based Codes

• Physical Therapy Re-Evaluation (97164) – Follow-up evaluation to assess progress or modify the treatment plan.
• Unattended Electrical Stimulation (97014) – Electrical stimulation does not require continuous attendance by a provider.
• Hot/Cold Packs (97010) – Application of thermal modalities like hot packs or ice packs.
• Group Therapy (97150) – Therapy is provided in a group setting involving multiple patients.

Appropriate Billing Modifiers

When submitting claims, include any relevant modifiers to impact reimbursement for therapy services:

• CQ/CO: Services performed wholly or partly by a PTA or OTA
• GA: Advanced Beneficiary Notice (ABN) on file for non-coverage
• GO: Services provided by an OT
• GN: Services provided by an SLP
• GP: Services provided by a PT
• KX: Exceeded Medicare therapy threshold but still necessary
• XP: Services billed separately by a different provider
• 22: Increased procedural services
• 52: Reduced services at the provider’s discretion
• 59: Designates services not usually provided together (NCCI edit pairs)
• 95: Telemedicine services

Billing with Mixed Remainders

Mixed remainders refer to leftover minutes from different billing codes.

Example:

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

Steps:

• 1 unit of 97140 (15 minutes), 1 unit of 97116 (15 minutes)
• Remaining: 6 minutes (97140), 2 minutes (97116)
• Combine remaining minutes to bill another unit of 97140

Management and Assessment Time

If provided one-on-one, therapists can bill for patient management, assessment, and education time.

Billable Activities:

• Assessing response to interventions
• Patient education on self-care
• Answering patient questions
• Documenting in the patient’s presence

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

The American Medical Association (AMA) follows the “Rule of Eights,” which requires at least 8 minutes of one-on-one treatment to bill a unit for each CPT code. Unlike CMS, which aggregates time across all codes, the AMA separates the time by individual code.

Example:

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 of either 97110 or 97140 can be billed due to the aggregated total of 16 minutes.