Updated on: July 29, 2025

Introduction

Accurate billing is a cornerstone of sustainable clinical practice. For skilled providers such as occupational, physical, and speech-language therapists, one critical guideline drives how timed services are converted into billable units: the 8‑Minute Rule. Applied widely across Medicare, Medicaid, TRICARE, and many private insurers, this rule defines how many units of timed CPT codes can be billed based on actual service minutes.

This guide breaks down:

• What the 8‑Minute Rule is and why it matters
• Differences between time‑based and service‑based codes
• How to calculate units correctly, including handling mixed remainders
• The distinct treatment of psychotherapy codes under Medicare
• Practical examples and billing charts for clarity
• Common pitfalls and best practices for compliance
• FAQ-style clarifications

You’ll also find chart ideas built for your practice or website to visualize and streamline billing workflows.

What Is the 8‑Minute Rule?

The 8‑Minute Rule, sometimes called the Rule of Eights, is a Medicare billing policy that governs time-based outpatient therapy services. It establishes that:

• At least 8 minutes of a timed CPT code must be delivered for a unit to be billable
• Billing is in 15-minute increments, so each unit spans 8 to 22 minutes of service for one unit
• As treatment time increases, additional units accrue: 23–37 minutes = 2 units, 38–52 = 3 units, and so on

This rule helps ensure fair reimbursement and prevents billing for very short durations that don’t meet the threshold.

Time-Based vs. Service-Based CPT Codes

Therapy billing codes fall into two categories:

Time-Based Codes

Used for direct, one-on-one skilled services measured in increments (usually 15 minutes). These include:

• Therapeutic exercise
• Manual therapy
• Neuromuscular re-education
• Therapeutic activities
• Gait training
• Ultrasound, iontophoresis, prosthetic training

Service-Based Codes

These are untimed codes billed as a single unit regardless of time spent. Examples:

• Evaluation or re-evaluation visits
• Group therapy
• Electrical stimulation (unattended), hot/cold packs

Correct classification is essential: only time-based services count toward the 8‑Minute Rule.

How to Calculate Billable Units

Standard Process

1. Add up total minutes spent on all time-based services for the session
2. Divide by 15 minutes to get whole units
3. If 8 or more leftover minutes remain, bill one additional unit for the service with the longest time
4. Discard any remainder less than 8 minutes

Reference Table

Mixed Remainder Handling

When leftover minutes come from different services (e.g., 5 minutes manual therapy + 3 minutes therapeutic exercise = 8 total), CMS allows an extra unit billed under the code with the longer portion.

AMA “Rule of Eights” vs CMS Interpretation

• AMA Rule of Eights: Each service is considered individually. A code must have at least 8 minutes on its own to earn a unit—mixed remainders do not combine
• CMS Rule: Allows combining leftovers across time-based services for billing

Which method to apply depends on payer; CMS method applies for Medicare and most public payers.

Psychotherapy Codes: A Special Case

Medicare treats standard psychotherapy codes differently—they are service-based, billed as one unit regardless of time beyond a minimum range. For example:

• 90832 covers 16–37 minutes
• 90834 covers 38–52 minutes
• 90837 covers 53+ minutes

No clock runs for additional units; one session = one unit. Even though time thresholds define which code applies, they are not aggregated, and extra minutes do not warrant a second unit.

Practical Examples

Example 1: Mixed Modalities With Remainder Billing

• Manual therapy: 15 minutes
• Therapeutic exercise: 10 minutes
  Total timed minutes = 25 → 2 units billed

Example 2: Mixed Remainder Scenario

• Exercise: 15 minutes
• Manual therapy: 8 minutes
• Ultrasound (timed): 5 minutes
  Total timed time = 28 → 1 whole unit (15), remainder 13 minutes
  Remainder ≥ 8 → one extra unit billed to the service with longest remaining time

Example 3: Service-Based CPT In Same Session

• Therapeutic exercise: 30 min
• Manual therapy: 15 min
• Cold pack (service-based): 15 min
  Timed totals accumulate to 45 min → 3 units
  Add one service-based unit → Total billed units = 4

Suggested Charts and Visual Tools

Chart 1: Billable Units Reference Table

A simple table that helps therapists quickly determine how many units to bill based on total timed minutes.

Chart 2: Billing Flowchart

Steps:

• Classify code as timed or service-based
• Total all timed minutes
• Divide by 15 → bill whole units
• Remainder ≥ 8 → bill additional unit
• Add service-based units

Chart 3: Mixed Remainder Bar Graph

Show how leftover minutes from multiple services (e.g., 5+3=8) qualify for an extra unit.

Chart 4: AMA vs CMS Rules Comparison Table

Side-by-side comparison to illustrate payer-specific billing interpretations.

Compliance Tips and Documentation Practices

Accurate Time Tracking

Always record start and end times of each time-based activity.

Detail All Services

Documentation should show what CPT codes were used, what was done, and for how long.

Know Your Codes

Understand which CPT codes are time-based vs service-based.

Use Correct Modifiers

Use modifiers like CQ/CO when therapy assistants are involved in delivering services.

Internal Audits

Regular internal chart reviews can catch and correct documentation errors before claim submission.

Common Errors and Pitfalls

• Billing units for less than 8 minutes of service
• Mistaking service-based codes as time-based
• Failing to combine leftover minutes when applicable
• Billing multiple units for psychotherapy sessions
• Omitting necessary assistant-related modifiers

FAQs

Can I bill for a 7-minute timed service?
No. Services must be at least 8 minutes to be billable under time-based codes.

Do remainder minutes from different codes combine?
Yes, under CMS guidelines, you can combine them if the total is 8 minutes or more.

Are psychotherapy services billed using the 8‑Minute Rule?
No. Psychotherapy is service-based. Use specific codes like 90832 or 90837 based on session duration.

Do private payers use the 8‑Minute Rule?
Many do, but some use the AMA Rule of Eights. Always check each payer’s policy.

Summary

• The 8‑Minute Rule is a Medicare billing standard for time-based services.
• CPT codes are categorized as either time-based or service-based.
• You must deliver at least 8 minutes of a time-based service to bill 1 unit.
• Remainder minutes can be combined for additional units under CMS but not under AMA.
• Psychotherapy services are handled differently—they are billed as single units per session.
• Use documentation, flowcharts, and billing tables to maintain accuracy and compliance.

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