Introduction
Time-based billing is one of the most misunderstood areas in medical billing—especially for mental health, physical therapy, occupational therapy, ABA, and speech therapy. Misunderstanding the rules leads directly to payer audits, recoupments, and compliance exposure.
This guide outlines the structural differences between time-based and unit-based CPT codes and how to bill them correctly.
1. What Is Time-Based Billing?
For time-based CPT codes, you can only bill units based on the actual minutes documented. Payers—especially Medicare—enforce the 8-minute rule, making accurate time capture non-negotiable.
Examples:
97110, 97112, 97140, 97116, 97530, 97535, 90837 (session-based but time-dependent).
Rule:
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8–22 minutes = 1 unit
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23–37 minutes = 2 units
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38–52 minutes = 3 units
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and so on
Audit Risk: High if documentation doesn’t match billed units.
2. What Is Unit-Based (Untimed) Billing?
These codes represent a service, not duration. One encounter = one unit, regardless of time spent.
Examples:
97161–97163 (PT eval codes), 99213, 99214, 90832 (session-based), 90791, 96160.
Rule:
You bill once per DOS unless the code explicitly allows multiple units.
Audit Risk: Moderate—mostly linked to medical necessity and documentation completeness.
3. Compliance Controls You Must Have in Place
Clinics get flagged because documentation does not support units billed. Build system-level controls.
Best Practices:
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Enforce accurate time-in/time-out documentation
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Align daily notes with CPT units billed
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Conduct random monthly audits
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Train staff on 8-minute rule vs CMS vs commercial payer variations
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Track therapist utilization based on billable vs non-billable time
4. Common Mistakes Clinics Make
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Billing 3 units when only 29 minutes were documented
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Mixing untimed and timed codes incorrectly
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Missing total treatment time
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Assuming all payers follow the Medicare 8-minute rule
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Billing units based on scheduled duration instead of actual time
Each mistake exposes the practice to denials and payer scrutiny.
5. How to Operationalize Correct Billing
Implement structured SOPs:
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Claim scrubber with time-logic validation
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Coding templates with auto-calculated units
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Quarterly coding training
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Weekly exception report for mismatched time vs units
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Automated alerts for missing documentation
This shifts your team from manual checking to clean-claim automation.
Conclusion
Understanding the difference between time-based and unit-based billing isn’t optional. It’s a compliance requirement. When clinics align documentation, coding, and billing rules, they reduce audit exposure and accelerate reimbursement.
Implement the right controls now, and you’ll see immediate improvements in revenue integrity and cash flow.
