Would you like to know how Insurance reimburses physical therapy? For many, physical therapy (PT) is integral to recovery and helps people regain strength, mobility, and function.
However, understanding the insurance policy behind physical therapy costs can be tricky as policies and criteria vary.
In this guide, we break it down and answer the most common questions you have about insurance reimbursement for physical therapy.
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Now, let’s get started.
Does Insurance Cover Physical Therapy
Most insurance plans cover physical therapy, but coverage varies greatly. Medicare, Medicaid, private, or other health insurance companies consider physical therapy essential to help treat an injury, recover from surgery, or control a chronic condition.
However, depending on your type of insurance plan, the specifics of coverage include the number of sessions allowed, out-of-pocket costs, etc.
Patients may be limited to a certain session count in a given year and may need a doctor’s referral before being approved for PT coverage from their insurance provider.
For example, Medicare Part B pays for physical therapy within strict guidelines, such as frequency of treatment and condition for which treatment is appropriate.
First, you should always check with your insurance provider to see what PT coverage exactly means under your plan.
What Are The Common Requirements For Physical Therapy Insurance Reimbursement
Insurance companies require certain requirements before you are eligible for reimbursement for physical therapy services. The most common requirements include:
Medical Necessity: Insurers typically consider physical therapy medically necessary, meaning it must be prescribed by a licensed healthcare provider and intended or directed to improve a medical condition or injury.
Documentation and Progress Reports: Your physical therapist sends your insurance providers documentation of your progress, including an initial evaluation and periodic progress reports. These reports justify further treatment.
Pre-Authorization: Some insurance plans require pre-authorization, which means the insurer agrees to the therapy sessions in advance. The treatment may not be reimbursed without this authorization.
Knowing this can save you from charges on unexpected costs and can help you be confident that your Insurance will pay for your physical therapy session.
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How Much Does Insurance Typically Pay For Physical Therapy
Your physical therapy coverage will depend on how much Insurance pays, your deductible, and your out-of-pocket maximum for the year.
Generally, Insurance covers a significant portion of physical therapy costs, but there are factors to keep in mind:
Co-pays and Co-insurance: Individual insurance plans often require a co-pay (a set amount you will pay at each session) or co-insurance (a percentage of the total cost you will owe at each session).
An example would be that a plan may need a $30 co-pay or 20% co-insurance, which means you pay 20 per cent of each session’s cost, and Insurance is responsible for the other 80.
Deductibles: If you haven’t met your annual deductible (the amount you pay before Insurance kicks in and covers some of the cost), you will probably pay for some or all of the first sessions until you do.
Session Limits: Some plans cap the number of physical therapy sessions they’ll cover annually. For example, an insurance provider may cover up to 20 sessions yearly, but it’s on you after that.
Do You Need a Referral for Physical Therapy Coverage
In many cases, physical therapy coverage requires a certified primary doctor or a specialist to give you a referral. For insurance companies, referrals are verification that the patient’s condition necessitates and supports the therapy being provided.
Whether you need a referral depends largely on your insurance plan:
Health Maintenance Organization (HMO) Plans: Physical therapy is usually required under HMO plans. The plan needs a referral from your primary care doctor, who has been treating you. It controls costs and guarantees that only medically necessary treatments are covered.
Preferred Provider Organization (PPO) Plans: This differs from the HMO plan in that you may visit a physical therapist in the network directly without a referral. However, the PPO may still require authorization for this purpose.
It is crucial to check with your insurer before you schedule a PT. This can help you properly understand whether a referral is needed, avoiding unexpected out-of-pocket expenses.
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How Do Physical Therapy Billing Codes Affect Insurance Reimbursement
The billing codes used by physical therapists to describe what services were provided determine how much Insurance will reimburse.
Each type of therapy has a unique Current Procedural Terminology (CPT) code that indicates the specific treatment, such as:
Evaluation Codes: These codes are used for initial assessments to indicate that the therapist could assess the patient and create a treatment plan.
Therapeutic Exercise Codes represent prescribed exercises to strengthen, stretch, or condition (endurance).
Manual Therapy Codes are used for hands-on techniques such as massage or manipulation to relieve pain and improve movement.
Some therapies may receive greater reimbursement, while others may have less. If, for example, you are dissatisfied with the charges on your insurer’s account, understanding these codes can be useful.
Does Insurance Cover Out-of-Network Physical Therapy Services
Your insurance plan determines the kind of coverage that you get for out-of-network providers. Here’s how it generally works:
In-Network vs. Out-of-Network: Typically, insurance companies will have a contract with certain physical therapy providers, called in-network providers. However, these providers have agreed to offer services at pre-negotiated rates. That means the insurer will only pay a portion of that cost, and you’d be responsible for the rest—so you’d pay much more out of pocket if you went out-of-network.
Reimbursement Rates: Some insurers partially reimburse out-of-network costs, but most require a higher share. For instance, if you have 80% in-network coverage, your insurer will only pay 50% for out-of-network services.
Submitting Claims for Reimbursement: If you pick an out-of-network provider, you may pay session by session and submit claims for some reimbursement. It’s also important to keep all invoices and receipts for the Insurance to process.
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What Happens If Physical Therapy Insurance Claims Are Denied
Denied claims are a frustrating thing, but appealing and reversing the decision is something you can do. Here’s how:
Understand the Reason for Denial: In this case, you can check out the explanation of benefits (EOB) statement and speak to your insurance provider to find out why the claim was denied or rejected. Reasons might be a lack of documentation, incomplete information, or over the session limit.
Gather Supporting Documentation: Put together your paperwork, such as your doctor’s referral, therapy notes, and progress reports. This proves the necessity of the treatment.
File an Appeal: Consider this option if you experience a case of denied or rejected claims. Insurance companies often have an appeals process that you should follow; you should file an appeal as instructed by your insurer. You might contact your physical therapist if they need to explain additional documentation or why you should be covered.
Final Thought
Insurance reimbursement for physical therapy can get complicated, but knowing your coverage and the bill and being proactive with documentation can make it easier to navigate.
By asking the right questions and staying informed, you can maximize your benefits and keep down your out-of-pocket expenses for vital physical therapy.