8 Minute Rule vs. SPM: Are you losing money?

Most people are familiar with the 8 minute rule as the common way to bill units of physical therapy services in the outpatient setting. However, if you’re young in the profession, like myself, you may not have even heard of Substantial Portion Methodology (SPM). Even if you’ve been a practicing clinician for a number of years, you may have neglected SPM to make life easier, or just forgot about SPM all together due to how your respective company bills insurances. SPM actually precedes the medicare’s 8 minute rule and was actually used for medicare in the recent past. Under the right circumstances, you can actually bill more units and, in turn, make more money using SPM.

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8 Minute Rule: Centers of Medicare and Medicare Services (CMS) 
Medicare providers are required to bill Medicare patients according to CMS rules, but medicare rules do not apply to other insurances unless other wise specified.

Transmittal 747 December 1999, the Health Care Financing Administration (HCFA) announced that beginning April 1, 2000, The 8′ rule must be used to bill Medicare beneficiaries for outpatient therapy services.

The system applies to therapeutic services involving direct patient contact by thecenters_for_medicare_and_medicaid_services_logo_2014 provider. A unit was redefined as the number of times the service reported was performed.

“The schedule of times is intended to provide assistance in rounding time into 15 minute increments.”

“It does not imply that any minute until the 8th should be excluded from the total count as the timing of active treatment counted included time.”

“If more than one CPT code is billed during a calendar day, then the total number of units that can be billed is constrained by the total treatment time.”

This Transmittal 747 came to be known as Medicare’s 8′ minute rule

8 min SPM

SPM: Substantial Portion Methodology

SPM is not new! It actually predates the 8 minute rule (2000). SPM is how services were billed to all patients, including medicare, before the 8′ rule.

  • Current Procedural Terminology (CPT) codes were first created in 1966.
  • Health Insurance Portability and Accountability Act (HIPPA) of 1996 sought to insure that all health care claims were standardized.
  • CPT assistant affirmed the use of SPM in December 2003 CPT Assistant & again in August 2005.

The SPM sources of information is the Current Procedural Terminology (CPT) Assistant.  “In the past, the focus and purpose of the CPT Assistant was to impart coding advice from the AMA perspective based on discussion on the use and interpretation of the codes at panel meeting and as reflected in the official panel minutes. With the creation of the editorial board, the focus of the newsletter will subtly shift from providing strict CPT coding guidance and interpretation to responding to ‘real world’ coding issues.” (CPT Assistant February 2007 / Volume 17,Issue 2)

“Payers may develop a payment policy related to the reporting of timed codes in the 97000 series that follow Medicare or are more strict (ie., require services be provided for the full 15-minutes) or allow documentation to support medical necessity for any portion of the care provided within the range of the 15-minute service descriptor. Many private payers either have no stated policy or follow medicare policy.” (CPT Assistant, August 2005/Volume 15,Issue 8)

billing“Although this reporting method reflects the intent of CPT, third-party payers may request that these services be reported differently. It is best to contact your third-party payer for specific reporting guidelines. Coding should not be determined based on number of minutes spent per body part, but rather the total aggregate time.” (CPT Assistant, August 2003/Volume 13, Issue 12)

Can a facility bill differently to payer sources for the exact same service? Yes, Medicare does not set the rules for other payer sources. Facilities should follow payer guidelines in that payers contract. If the contract is silent on specifics for timed codes, SPM set forth by the CPT assistant should be considered as a foundation for code selection.

Every payer can dictate how they choose to pay for physical therapy services. ie: Medicare requires facilities to bill all medicare patients according to Centers of medicare and medicaid services (CMS) 8′ rule.

The 8′ rule is a medicare rule, not a requirement that all payer sources are required to bill services by.

After the 8′ rule was created in 2000, there was a lot of confusion about how to charge patients and many thought that commercial insurance companies would switch to the 8′ rule but that has not happened yet.

In other words, we can still use SPM!

The sources who require physical therapy be billed according to the 8′ rule:

  • Medicare
  • Medicaid
  • Other Federal Payers:
    • Tricare (Armed Services)
    • Blue Cross for Federal employees
    • Champus (veteran’s)
    • OWCP: Office of Worker;s Compensation Program administers by ACS
  • Medicare Advantage Programs
    • Medicare Plus Blue
    • Pyramid Life
    • Humana (advantage programs)
    • Aetna Advantage Plans
    • If not sure if the payers is federal, Bill according to the 8′ Rule

Payers who can be billed according to SPM:

  • Blue Cross Blue Shield
  • Aetna
  • Cigna
  • Auto (Geico, State Farm, Allstate)
  • Workman’s Comp

Primary vs Secondary Payers: If either payer is a federal payer, bill according to the 8′ rule.

SPM only applies to Timed Codes, nothing is changed with service Based/Un-timed Codes

  • Serviced based / Untimed Codes – nothing changed from 8′ rule
    • Do not require direct 1 on 1 time with the patient
    • Can only bill one unit of each untimed code daily per discipline per patient
      • ex patient starts w/ hot pack & ends w/ cold pack = 97010 x 1
    • Allowed to double book timed and untimed codes
  • Timed Codes– SPM only applies to timed codes:
    • Any unskilled therapy is NOT covered & must be 1 on 1 w/ the patient
    • Dressing changes still not covered
    • Specific time of treatment must still be documented
    • Co treatments & re-checks stay the same as the 8′ rule

What’s the Difference?

question“As with any 15 minute timed code, it is important to recognize that a substantial portion of 15 minutes must be spent in performing the pre-, intra-, and post service work in order to report (a timed code). If only a few minutes are spent performing the physical medicine service, either code should not be billed…” (CPT Assistant, August 2005/Volume 15, Issue 8)(CPT Assistant, December 2003/Volume 13,issue12)

SPM Basic Construct: Each timed code, the therapist should provide a substantial portion of 15 minutes. Substantial portion (over half of 15′) = 8 minutes. (sounds similar to the 8′ rule…I wonder where medicare got the idea from…)

“If the manual therapy provided takes a minor portion of 15 minutes, the provider should…not bill the second service unit…” (CPT Assistant, December 2003)

  • SPM Examples for Modalities
    • Iontophoresis – Does not change
      • you can charge for everything except run time
    • Ultrasound, Attended E-stim, Contrast bath, Hubbard Tank – Does Change
      • Prep & clean-up part of “pre, intra- and postservice work” included in the charge

Choosing between the 8′ rule and SPM (for commercial insurances)

Scenario 1

2

  • If you’re in a contract with medicare, you cannot charge less for a service than what medicare will reimburse.When a commercial insurance pays for therapy services, the numbers must be ran both ways.
  1. Determine the number of minutes provided for each separate CPT
    1. 10′ manual therapy, 8′ minutes ther ex
  2. Run the numbers both ways
  3. Apply the most appropriate billing method

   Scenario 2

2

  • Using 8′ rule, the patient will be charged 1 unit
  • Using SPM the patient would not be charge since none of the CPT codes were greater or equal to 8′
  • Since no single unit is greater than or equal to 8′, the codes must be totaled and the 8′ rule applied to bill the correct charge.
  • With commercial insurance, billing methods may vary one session to another depending on the treatment provided.
    • patient billed 8′ rule on Tuesday, then billed SPM on Thursday
  • * only one billing method can be used per each Tx session

Scenario 3

3

  • 8′ rule: apply greater skill principle & charge 2 units
  • SPM: Manual x 1 , Ther Ex x 1 , Neuro Re-ed x 1 =  3 units

Scenario 4

4

  • Manual therapy & NRE codes are less than 8′. The codes must be totaled and the 8′ rule applied.

Scenario 5

5

A substantial portion of 30′ was utilized performing manual therapy, therefore it is appropriate to bill manual therapy x 2

  • 25′-(15′ 1 unit) = 10′
  • 10′ > 8′
  • 8′ = substantial portion of 1 whole unit of 15′
  • Manual x 2 Gait x 1

Conclusion

Medicare has seemed to take over or even scare the physical therapy profession into only utilizing the 8 minute rule. As of today, the common way to bill units of physical therapy services in the outpatient setting is the 8′ rule. However, there is another method that can be used to bill commercial insurance that predates CMS’s 8′ rule that was actually used for medicare in the near past. This method is the substantial portion methodology (SPM). Under the right circumstances, you can actually bill more units and, in turn, make more money using SPM.

If you’re young in the profession, you may have not heard of this method, and even if you’ve been a practicing clinician for a number of years, you may have neglected SPM to make life easier, or just forgot about SPM all together due to how your respective company bills insurances. If you are a practice owner or in a managerial position, I encourage you to look further into SPM. Under the right circumstances, you can actually bill more units and make more money to protect your bottom line using SPM. Check out Rick Gawenda seminars if you’re interested in more information.

References:
Rick Gawenda seminars   https://gawendaseminars.com/
https://www.cms.gov/Medicare/Medicare.html
CPT Assistant Book
Medicare claims processing manual, Chapter 5, section 20.2
Medicare pdf: “11 Part B Billing Scenarios for PTs & OTs”

Thank You for Your Attention

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Edited: Ffrancesca Famorcan

View More: http://joellearner.pass.us/casey

To learn how Physical Therapy can serve you, see newgradphysicaltherapy.com  GetPT1st ,  Greg Todd , Renewal Rehab Paul Gough Physio RoomsFunctional Patterns  ,  Aaron LeBauer , Kelly Starrett,  The Movement Fix, Anatomy Trains,  The Prehab Guys,  Modern Manual Therapy,   Dr. Ben Fung & Updoc Media ,  Andrews University Physical Therapy
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