Tuesday, November 23 | Care Coordination, EHR Solutions and Operations, Thought Leadership

Physical Therapy Billing Modifiers 96 & 97: 2022 Telehealth POS Changes 

By Ada Gudex, Senior Director and GM, TheraOffice

Every year’s regulations are different than those that came before, and the transition from 2022 into 2023 was no different. Starting in early 2021, physical therapy billing modifiers 96 & 97 were introduced, and as time has passed, more payers are requiring these differentiating factors to be considered. Since the acquisition of TheraOffice, Netsmart has dedicated more time and effort to increasing our educational content through blogs, webinars, podcasts and social media to save you time on keeping up with regulation and rehabilitation specific changes. Hopefully everyone is benefiting from the information (even if you are not a Netsmart TheraOffice client). 

We're here to help physical therapists like you succeed! We know the healthcare landscape is constantly changing, so we want to keep you informed and give you the tools you need to thrive. This is why we share important updates like the new physical therapy billing modifiers (96 and 97) and telehealth changes, even if you don't use our software. Staying up-to-date is key in today's healthcare world, and we're here to support you every step of the way.

Now we would like to make everyone aware of two important changes that may impact your physical therapy practice related to Physical Therapy Billing Modifiers (96 and 97) and Telehealth Place of Service (POS) changes.


Physical Therapy Billing Modifier 96 & Modifier 97

Although some payers implemented this change in 2021, more payers required it in 2022, and this upward trajectory of need is unlikely to recede. As of January 1st, 2022, United Health Care (UHC) required therapists to differentiate between habilitative and rehabilitative treatment using modifiers 96 and 97, respectively. With this in mind, TheraOffice is equipped with a method of handling this difference and making the billing process comparatively easier. 

Habilitative treatment would include all treatments that help patients develop a skill, movement, or function that they were not able to learn on their own. An example of this would be a pediatric patient who experienced a developmental delay and now requires therapy to learn the skill that they were unable to learn on their own.

Rehabilitative treatment consists of all treatments that help patients restore or regain a skill, movement, or function that was lost due to injury or illness. An example of this would be a patient who suffered a complex lower extremity fracture and now needs to re-learn how to walk.

Physical Therapy Billing Modifiers 96 & 97: An Example

Imagine a young athlete named Alex who was born with a mild form of cerebral palsy. This condition affects Alex's motor skills and balance, making it challenging for him to walk, run, and climb stairs as easily as other children his age.

Habilitation: Because Alex never learned to walk independently, he initially receives habilitative therapy. This therapy focuses on developing his foundational motor skills, strength, and coordination. He works with a physical therapist to learn how to distribute his weight, take balanced steps, and maintain proper posture while walking with assistance.

Rehabilitation: Over time, with consistent therapy and practice, Alex learns to walk independently. However, during a soccer practice, he suffers a sprained ankle. This injury temporarily affects his balance and ability to walk smoothly.

At this point, Alex's therapy transitions to rehabilitation. The focus shifts from developing entirely new skills to regaining the skills he previously learned. The therapist helps Alex regain full strength and flexibility in his injured ankle, retrain his muscles for proper movement, and restore his confidence and gait.

Alex's journey through physical therapy highlights the importance of understanding physical therapy billing modifiers 96 and 97.

When Alex first receives therapy to develop his walking skills, this would be considered habilitative treatment and would be billed with the modifier 96. Once he learns to walk independently, but then experiences a setback due to his ankle sprain, his therapy becomes rehabilitative as it focuses on regaining previously learned skills. This therapy would be billed with the modifier 97. Understanding these modifiers is crucial for accurate billing and ensures that insurance companies properly reimburse physical therapists for the different types of services they provide.

The best way to address these requirements in TheraOffice would be using the contracted fee schedules. You can create one contracted fee schedule that has modifier 96 defaulted and/or create a second one that has modifier 97 set to automatically populate.
Depending on your clinic’s patient population, you can either link the new contract fee schedule to your UHC insurance or you can set the 96 modifier fee schedule or the 97 modifier fee schedule in the patient’s case. Typically, a physical therapy patient will be categorized as needing habilitative therapy or rehabilitative therapy (in a case), so you will not need to change the fee schedule for a case.


Telehealth Place of Service (POS) Changes

If you are currently providing telehealth services to your patients, you are most likely utilizing POS 02; however, in 2022, a new POS was introduced. With that said, POS 02 can be used if the telehealth services were provided somewhere other than the patient’s home. POS 10, the new POS, should be used if the patient is in their home at the time of the telehealth session.

POS 10 will be a part of TheraOffice’s .22 update, which will be released in December for both web and on-site customers. If you need the new POS prior to getting the update, please contact our support team and we can help get that added to your database.

As always, if any questions arise, please reach out to our support team or contact us at 1-800-842-1973.

About the Author

Ada Gudex, Manager & Senior Solution Strategist


As the Senior Director & General Manager of TheraOffice of our Specialty Practices Business Unit, Ada is responsible for leading a team focused on building out solutions and services to support organizations in the PT, OT, Speech Therapy markets. Prior to joining Netsmart, Ada held various leadership, consulting, project and product management roles at both small and larger companies – Assurant, Garmin, Center for Fiduciary Management, & Farmobile. Additionally, she served over 8 years as a Finance Officer in the US Army. Ada has a BS in Political Science from Georgia College and State University and a Masters of Human Resource Management from Florida International University. Ada leads with passion and lives by the motto – one day at a time!

Meet the Author

Ada Gudex · Senior Director and GM, TheraOffice


From the CareThreads Blog


Four EVV Challenges and How Addressing Them Can Improve Care and Operations

Monday, June 17 | Value-based Care,Thought Leadership

With the dust settling on electronic visit verification (EVV) compliance, it’s time to evaluate the main challenges payers and providers face in the EVV space. Here are four challenges and how addressing them can improve care and operations.


Netsmart Adds TheraOffice Physical Therapy EMR to CareFabric Platform

Thursday, June 13 | Partnerships and Collaboration,Thought Leadership

Netsmart announced the addition of TheraOffice, an industry-leading practice management platform for physical therapy and rehabilitation practices to the Netsmart portfolio. This addition expands the Netsmart CareFabric® platform to deliver workflows for therapy providers to better connect to all venues of healthcare, with this physical therapy EMR being a critical step in delivering this connectivity to providers of all types.

How Does Physical Therapy Software Help Streamline Patient Care

Netsmart's Top 5 Features for Physical Therapy Documentation Systems

Thursday, June 13 | Partnerships and Collaboration,Thought Leadership

Learn the top 5 features to look for in documentation software for physical therapy. Discover how to save time and effort within your electronic therapy notes.