-1.68%
Conversion factor
- Proposed CY 2027 nonqualifying factor $32.84, from $33.40
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White paper · Buyer guide, PT billing services
Physical therapy billing services: a ten-point scorecard for 2027
Short answer: billing services look alike in a sales deck. The differences show in January, when the fee schedule moves, the KX threshold resets, RTM rules tighten and a RAC topic aimed at KX claims is already approved. Each is a published rule with a date, so each becomes a test you give a vendor before you sign. Ten criteria, a weighting, the evidence to ask for, scored on your own visits.
10 criteria · 200 points
$33.40 → $32.84 · conversion factor, proposed
$2,540 · proposed KX threshold
RAC 0228 · KX claims under review
Edition
2027 buyer guide
Focus
PT billing vendors
Audience
Owners · CFOs
Framework
10 criteria, 200 pts
Effective date
Jan 1, 2027
Length
13 min read
10criteria
Unit accuracy, thresholds, plan-of-care clocks, modifiers, authorizations, RTM, denials, telehealth, reporting, controls [5]
$32.84
Proposed CY 2027 nonqualifying conversion factor, down 1.68% from $33.40 [2]
$2,540
Proposed CY 2027 KX threshold, PT and SLP combined, pending the final rule [3]
10treatment days
Progress report period a billing partner should be tracking for you [6]
Four rules with dates, four tests
The weights are ours; change them for your payer mix. Everything else is drawn from CMS rules and manuals, sources at the end. A billing partner is graded on rules that are already written down: ask for the evidence, not the promise.
$2,540
KX threshold
- Proposed for PT and SLP combined, pending the final rule
Jan 1, 2027
RTM conditions
- Proposed start of established-patient, initiating-visit and employed-staff conditions
Apr 15, 2026
RAC topic 0228
- Therapy claims billed with KX, complex review, all A/B MACs
Ten criteria, out of 200
Score each 0 (not demonstrated), 1 (described but not evidenced) or 2 (evidenced on your data), multiply by the weight, compare totals. A vendor that will not run a blind test on your own visits scores 0 on criterion 1 regardless of the deck.
| Criterion | What good looks like | Evidence to request | Weight |
|---|---|---|---|
| 1. Unit accuracy | Units built from total timed minutes per day, allocated by largest remainder; untimed codes at one unit | 20 recent visits re-counted blind against the treatment notes | 15 |
| 2. Threshold tracking | Per-beneficiary KX and medical review accrual across all providers, updated for CY 2027 the day the final rule posts | Screenshot of the accrual view and the January change log | 10 |
| 3. Plan-of-care clocks | 30-day certification, 10-treatment-day progress report, 90-day recertification tracked per patient with an owner | The certification worklist for one clinic, today | 10 |
| 4. Assistant modifiers | CQ on PTA minutes under the de minimis rule, paid at 85%; never applied by default to a whole visit | CQ rate by therapist versus the staffing roster | 10 |
| 5. Authorization and visit limits | Payer limits, authorization vendors and effective dates by state and plan; auth counts decrement per visit | Their payer rule source and its last update date | 10 |
| 6. RTM compliance | Established patient, initiating visit and employed-staff conditions built into the 2027 workflow if finalized | Written RTM protocol for January 2027 | 10 |
| 7. Denial management | Denials worked by reason code with a named owner and a root-cause fix, not just resubmission | Denial report by CARC for the last quarter | 10 |
| 8. Telehealth modifiers | BB and BC from January 1, 2027; a plan for the December 31, 2027 end of PT, OT and SLP telehealth | Their claim edit for modifiers BB and BC | 5 |
| 9. Reporting | AR by age and payer, never-touched lines, past-follow-up lines, first-pass rate, monthly reconciliation to the EMR | A sample monthly pack, redacted | 10 |
| 10. Controls and transition | Work inside your EMR under your enrollments, audit trail per claim, HIPAA-aligned access controls, a written cutover plan | Transition plan with dates and a role matrix | 10 |
Weighting: 100 points, times a score of 0 to 2
Unit accuracy carries the most because it is the one criterion a vendor cannot talk around.
1. Unit accuracy
1515% of the total
2 to 7, 9, 10eight criteria
10 each80% of the total
8. Telehealth modifiers
55%
HeaviestStandard weightLightest, no payment effect
Unit accuracy under the 8-minute rule
Claims Processing Manual Chapter 5, section 20.2: total timed minutes in the day set the number of 15-minute units, a single timed service needs 8 minutes to bill, untimed codes bill one unit regardless. Rounding each code separately overbills; truncating the day's remainder underbills [5].
Units billed by total timed minutes in a day
1 unit
8 to 22 min12% of 127
2 units
23 to 3712%
3 units
38 to 5212%
4 units
53 to 6712%
5 units
68 to 8212%
6 units
83 to 9712%
7 units
98 to 11212%
8 units
113 to 12711%
0326495127 min
Minute band per unit countTop of the table
The blind test
- Pull 20 visits with treatment notes, strip the billed units, ask the vendor to count
- Compare to what was billed and to the manual
What a miss looks like
- Units above the band for total minutes
- A 7-minute service billed alone
- Extra units on the code with fewer minutes
The tool
- Our therapy units calculator runs the same logic, CQ and CO at 85% included
- Applied to a PT clinic with KX and CQ: the 8-minute rule case study
Threshold tracking that moves on January 1
CMS accrues each beneficiary's expenses at the PFS rate less any multiple procedure payment reduction and counts every provider the patient saw, so the tracker must read the Medicare accrual, not just your ledger. Ask when the 2026 amounts were loaded and who owns the January change [3].
Medicare therapy thresholds, PT and SLP combined
Claims above the KX line without KX are denied. CY 2027 uses an estimated 2.5% MEI; the final figure comes in the November final rule. Medical review stays at $3,000 through 2027 [1].
CY 2026 KXin force
$2,480100%
CY 2027 KXproposed
$2,540+2.4%
Targeted medical reviewthrough 2027
$3,000121% of the 2026 line
$0$1,000$2,000$3,000
In forceProposedReview selection line
Plan-of-care clocks and assistant modifiers
Three dates gate Medicare payment: certification within 30 calendar days of the first treatment day, evaluation included; progress reports every 10 treatment days; recertification every 90 days or when the plan changes significantly. A vendor that tracks none is leaving the therapists to remember [6].
- 0Day 0Evaluation, plan established: diagnoses, long-term goals, type, amount, duration, frequency
- 30Day 30Certification deadline; verbal order plus signature within 14 days
- 10Treatment day 10First progress report period ends
- 90Day 90Recertification deadline at the latest
Signature chase
Daily queue; escalate by day 20
Progress reports
Every 10 treatment days, recurring
Certified period
Up to 90 days, then recertify
Dated gatesRecurringCertified period
Ask to see the worklist
- Today, one clinic: every open plan with certification due, next progress report due, recertification date
Ask who owns the signature chase
- A named person, a daily queue, escalation when a physician has not signed by day 20
Ask for the on-time rate
- Recertifications signed inside the window as a share of plans, by month
On-time recertification, 22-clinic PT, OT and SLP group
Clocks moved from memory to a worklist; therapy authorization turnaround case study
71%Beforein memory
99.2%Afterin a worklist
Payment on a PT line by who furnished it
Criterion 4: CQ on PTA minutes under the de minimis standard, since January 1, 2022; a flat CQ rate across clinicians means the modifier is applied by rule, not by minutes [1]
100%Physical therapistfee schedule amount
85%PTA minutes with CQ15% reduction
Authorization and visit limits
Commercial and Medicare Advantage rules change by notice. UnitedHealthcare removed prior authorization for speech codes 92507, 92508 and swallowing code 92526 on Medicare Advantage and D-SNP plans from October 1, 2026, while PT and OT 97xxx codes stayed on the list [8]. A partner needs a maintained source and a counter that decrements before the patient is seen.
Ask for the source
- Where payer notices are read, how often, when the last therapy update was logged
- Our PT, OT and speech therapy payer matrix keeps a source link and date per cell
Ask for the counter
- Show a patient at visit 11 of 12 and what the front desk sees
- If the answer is a spreadsheet, score 1
Ask for the denial
- CARC 197 and 198 denials last quarter, and what changed because of them
What a visit-limit control should moveIn the same case study, authorization denials fell from 3.2% of visits to 0.4% and the group recovered $724,000 of an $809,000 annualized leak in twelve months.
RTM compliance in 2027
CMS wrote the employed-staff condition specifically to stop third-party monitoring companies. If your vendor, or a company your vendor brought in, runs RTM for you, ask how the January 2027 workflow changes if the rule is finalized [3].
1
Patient is established
New patients cannot start RTM under the proposal; the relationship must exist first.
2
Initiating visit documented
In person or by telehealth, RTM discussed, consent obtained, visit separately billable.
3
Employed clinical staff do the monitoring
Time counts only for direct employees under general supervision; contracted staff would not qualify.
4
Codes unchanged for now
The four G-codes (GRTM1, GRTM2 and the RPM pair) are a comment solicitation, not a proposal; 98975 to 98981 and 98984 to 98986 remain the plan for January. Proposed, not final.
Denial management by reason code
CMS loads new and modified reason codes three times a year, most recently effective October 1, 2026 under Change Request 14492, Transmittal 13791 issued May 27, 2026 [10]. The fixes live in different places, so the report must carry an owner. Full map with remark codes: outpatient therapy CARC map.
| CARC | X12 description (abridged) | Owner |
|---|---|---|
| 151 | Information submitted does not support this many/frequency of services | Coder and therapist |
| 197 and 198 | Precertification or authorization absent, or exceeded | Authorization desk |
| 4 | Procedure code inconsistent with the modifier used | Coder |
| 50 | Not deemed a medical necessity by the payer | Therapist and compliance |
| 236 | Procedure or modifier combination not compatible under NCCI | Coder |
| 119 | Benefit maximum for this time period reached | Billing and authorization desk |
The testAsk for last quarter's report in that shape. If they cannot produce it, they are resubmitting, not fixing.
Telehealth modifiers and the 2028 date
Jan 1, 2027
BB and BC required
- BB: services through a contracted virtual platform; BC: incident to a practitioner [7]
- A vendor should have a claim edit for both
Dec 31, 2027
Last day of PT, OT, SLP telehealth
- Section 6209, Consolidated Appropriations Act, 2026; from January 1, 2028 they can no longer furnish it
- Ask for the 2028 plan for the service line
$0
Payment effect of BB and BC
- Per the FAQ of October 8, 2026; a missing modifier is still a claim edit waiting to happen
Reporting you can reconcile
A monthly pack shows AR by age and payer, lines never touched, lines past follow-up, first-pass acceptance and a reconciliation of the AR file to EMR visits. Ask every vendor whether they will measure your whole book before working it, and what the measurement includes.
What one PT AR baseline showed at intake: 38 clinics, AR file dated September 15, 2026
$1.52 million was already past its follow-up date. The first two numbers a new partner should show you on your own book. Full baseline: PT franchise AR baseline case study [12].
AR never commented onshare of dollars
58.3%of AR dollars
AR over 90 daysshare of dollars
32.8%of AR dollars
0%25%50%75%100%
Never touchedAged past 90 days
Controls and transition
The lowest-risk transition: the vendor works inside your EMR and practice management system under your existing payer enrollments, so the cutover is a date of service. Ask for the role matrix, access model, audit trail per claim and PHI handling; the right answer describes controls built for HIPAA-aligned operations, not a certificate the software does not hold.
Eligibility and benefits
CorePulse
- Our verification engine runs 270/271 checks and reads the therapy benefit, visit limits and authorization indicators before the first visit
AR and denial work
Work Genie
- Our AR workflow platform gives every claim an owner and a next action and logs each step against the claim
Credentialing
CredPro
- Our credentialing platform tracks payer enrollments and re-credentialing dates so new therapists are billable on their start date
Copy one column per vendor
| Criterion | Weight | Score 0 to 2 | Weighted | Evidence received |
|---|---|---|---|---|
| 1. Unit accuracy | 15 | |||
| 2. Threshold tracking | 10 | |||
| 3. Plan-of-care clocks | 10 | |||
| 4. Assistant modifiers | 10 | |||
| 5. Authorization and visit limits | 10 | |||
| 6. RTM compliance | 10 | |||
| 7. Denial management | 10 | |||
| 8. Telehealth modifiers | 5 | |||
| 9. Reporting | 10 | |||
| 10. Controls and transition | 10 | |||
| Total | 100 | out of 200 |
Takeaway
Run criteria 1 and 9 on your own data before any contract conversation. Score your current partner first; the gap between their score and the best alternative is the decision.
Before the conversation
Run the blind unit count and the AR measurementCriteria 1 and 9, on your own data; the two a vendor cannot talk around.
Ask for the January 2027 change log in writingKX amounts, conversion factor, RTM protocol, telehealth modifiers.
Put the RAC topic 0228 packet test in the contractA complete KX response file within five business days of request.
Score your current partner firstThen the best alternative; the gap is the decision.
Read the rules behind the scorecardCY 2027 fee schedule impact note, the RAC topic 0228 issue of The Therapy Operator, the KX documentation checklist.
Where we fitOur physical therapy billing services are built around these ten criteria because they are the rules we are audited against. For a written quote, send clinic count, payer mix by state and monthly visits; to score your current operation first, book the audit.
Frequently asked questions
What should a physical therapy billing company be able to prove before I sign?
Three things on your own data: units re-counted blind from treatment notes against the Medicare 8-minute rule table, a measurement of your whole AR book including lines never touched and lines past follow-up, and a written January 2027 change log covering the KX threshold, the conversion factor, RTM conditions and telehealth modifiers BB and BC.
What are the Medicare therapy thresholds for 2027?
The CY 2027 PFS proposed rule would set the KX threshold at $2,540 for PT and SLP combined and $2,540 for OT, up from $2,480, using an estimated 2.5 percent MEI increase, recomputed for the final rule. Targeted medical review stays at $3,000 through 2027.
How does the CQ modifier affect PT billing?
CQ marks services furnished in whole or in part by a physical therapist assistant. Since January 1, 2022 Medicare pays them at 85 percent of the fee schedule amount. It belongs on the lines the PTA furnished under the de minimis standard, not on every line of a visit.
What changes for remote therapeutic monitoring in 2027?
If finalized, RTM is payable only for established patients, only after a separately reportable face-to-face initiating visit at which RTM is discussed, and only when the clinical staff furnishing it are direct employees of the billing practice. CMS is seeking comment, not yet proposing, on four replacement G-codes.
Is physical therapy telehealth still payable by Medicare in 2027?
Yes, through December 31, 2027 under section 6209 of the Consolidated Appropriations Act, 2026. The CMS FAQ of October 8, 2026 says PTs, OTs and SLPs can no longer furnish Medicare telehealth from January 1, 2028, and that modifiers BB and BC are required from January 1, 2027 with no payment effect.
- CMS, Therapy Services: KX modifier thresholds, CQ/CO modifiers, RTM codes and the CAA 2026 telehealth extension
- CMS fact sheet, CY 2027 Medicare Physician Fee Schedule Proposed Rule (July 14, 2026)
- Federal Register public inspection, CMS-1847-P, CY 2027 PFS proposed rule: KX thresholds, targeted medical review, remote monitoring
- CMS, Approved RAC Topic 0228: Therapy Claims Billed with KX Modifier (April 15, 2026)
- Medicare Claims Processing Manual, Chapter 5, section 20.2, Reporting of Service Units With HCPCS
- Medicare Benefit Policy Manual, Chapter 15, sections 220.1.2, 220.1.3 and 220.3
- CMS Telehealth FAQ, updated October 8, 2026
- UnitedHealthcare, prior authorization reduction code list, Medicare Advantage and D-SNP (effective October 1, 2026)
- X12, Claim Adjustment Reason Codes (current list)
- CMS Transmittal 13791, CR 14492: CARC and RARC update effective October 1, 2026
- CMS fact sheet, CY 2026 Physician Fee Schedule final rule (October 31, 2025)
- ASP-RCM case study, PT franchise group AR baseline: first 30 days (engagement records)
Checked October 25, 2026. Rules change; confirm against the source before relying on them. Items marked proposed come from the CY 2027 Physician Fee Schedule proposed rule and are not final until the final rule publishes.
Want the scorecard run on your clinics?
Send your clinic count, payer mix by state and monthly visits for a written quote, or book the audit and we will score your current billing operation against all ten criteria with you.