Common Terms in Physical Therapy Billing

Understanding these common billing terms can help you make informed decisions about the physical therapy billing process. You can be more confident in managing your medical expenses. Here are some of the terms worth knowing:

CPT Code

CPT stands for Current Procedural Terminology and is a code used to identify medical, surgical, and diagnostic services. The CPT code is used to bill insurance companies for the services provided by physical therapists.

ICD-10 Code

ICD or International Classification of Diseases is a code used to identify diagnoses or conditions that require treatment. This code is required when submitting claims to insurance companies for reimbursement.


A co-payment is an amount paid by the patient at the time of service in addition to any other fees associated with the visit. It is usually a fixed amount set by the insurance company and is collected at the appointment by the physical therapy billing services.


A deductible is an amount that must be met before insurance will cover any costs associated with physical therapy services. This amount varies depending on the plan chosen by the patient and their insurance provider.

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Coinsurance is an additional fee paid by the patient after they have met their deductible amount for physical therapy services. It consists of a percentage of the total cost of care, which can vary depending on the plan the patient has and their insurance provider.

Preauthorization/ Precertification

Preauthorization is a process where an insurance company reviews medical documentation prior to approving payment for physical therapy services, including those covered under Medicare Advantage plans 2025. They verify the services meet certain criteria to qualify as medically necessary treatments. This will determine whether the plan covers the costs or not.

Modifier Codes 

Modifier codes are two-digit codes added to CPT codes when submitting claims that indicate special circumstances. They are related to how or why services were provided, such as services that are performed bilaterally. 

NPI Number  

NPI stands for National Provider Identifier. It’s a unique 10-digit number assigned by the Centers for Medicare and Medicaid Services (CMS) to all healthcare providers.

Without your own NPI number, you may not be able to file claims. This can result in delayed payment processing times or denied reimbursements.

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The Importance of Accurate Documentation in Physical Therapy Billing

Here are reasons why accurate documentation is relevant:

Comply With Medicare and Other Insurance Requirements 

Accurate documentation can help your practice comply with all of the requirements set forth by Medicare and other insurance companies. 

Avoid Denials 

Documenting a patient’s medical history, diagnosis, treatment plan, and progress notes can help you avoid denials from insurance companies. If the information provided is incomplete or inaccurate, it could lead to a denial of payment for services rendered.

Increase Reimbursement Rates 

Proper documentation can increase reimbursement rates from insurance companies. The documentation can help them have a better understanding of what services were provided and how much you should be reimbursed for them.

Reduce the Risk of Fraudulent Claims 

Providing accurate documentation can reduce the risk of fraudulent claims being submitted to insurance companies for payment. This helps protect both physical therapists and patients from potential fraud or abuse of the system.

Be Informed and Prepared When Dealing With Physical Therapy Billing

Physical therapy billing can be a complex and confusing process. Knowing about the CPT code, ICD-10 code, co-payment, deductible, coinsurance, and preauthorization will help you be more informed and prepared when dealing with your medical bills. 

Understanding these terms and their meanings can help you make better decisions related to your billing process. Doing this can help you save time, money, and challenges associated with billing.

If you want more help with your billing services, reach out to a qualified billing management company.