Workers' comp billing for physical therapy practices

Most of what your billing team knows about a commercial claim stops at the state line. Workers’ compensation runs on statute, not contract, and the statute changes when you cross into the next state. Same CPT codes, same shoulder, different rulebook.

A legislature set the rate, not a negotiation

Start with how far apart the states sit. WCRI’s Medical Price Index for Workers’ Compensation, 2026 edition came out on May 28, 2026. It tracks 36 states from 2008 through 2025 and covers services billed by physical therapists, physical medicine included. WCRI reports that 2025 prices paid for nonhospital professional services ran from 28 percent below the multistate median to 174 percent above it, and that prices in Wisconsin were nearly four times those in Massachusetts.

Fee schedule design is what drives that spread. Florida shows how quickly the number moves once a legislature decides it should. Senate Bill 362, approved June 14, 2024 and effective January 1, 2025, raised the maximum reimbursement allowances for physicians and for surgical procedures. Florida’s workers’ compensation statute now reads 175 percent of what Medicare allows for a physician, 210 percent for surgery. Go looking for physical therapy in that provision and it is not there. The language names physicians licensed under chapters 458 and 459. Therapy is paid off a different line of the same manual. That is the first thing to learn about comp. “The fee schedule went up” is usually a sentence about somebody else.

Schedules also move without warning anyone in your building. New York’s Workers’ Compensation Board put a proposal to update five of its fee schedules into the January 14, 2026 State Register, comments open for 60 days after publication. One of the five pays acupuncture, physical therapy and occupational therapy. Nobody emails a PT practice about that.

Does workers’ comp require prior authorization for physical therapy?

Sometimes, and the answer sits in state law, not in a payer’s policy manual. Two states, opposite designs.

California caps the volume outright. Labor Code section 4604.5 entitles an injured worker to no more than 24 physical therapy visits per industrial injury, plus 24 chiropractic and 24 occupational therapy. Two things lift it. The employer authorizes more visits in writing, or the care is post-surgical physical medicine under the post-surgical treatment utilization schedule. Neither is something a biller arranges after visit 24 already happened.

Utilization review runs on its own clock there. A treatment decision is due within five normal business days. The clock starts when the request and the facts needed to decide it both arrive. It never runs past 14 days. A serious threat to health gets 72 hours.

Then the part worth knowing. For injuries on or after January 1, 2018, care for a body part the employer has accepted as compensable is authorized without prospective utilization review for the first 30 days. The treating provider has to sit inside the employer’s network, or be otherwise designated under the statute. Physical therapy is not on the carve-out list in subdivision (c). Surgery, imaging beyond x-rays, psychological treatment and home health are. That opening month is the widest lane the system gives you, and a lot of it gets spent waiting on a callback.

New York went the other way. Care that correctly applies the state’s Medical Treatment Guidelines needs no prior authorization at all. The Board’s guidelines FAQ says exactly that about physical therapy. Treat outside the guidelines and you need a variance, requested before the care is delivered, not after. Here is the part that catches owners: a physical therapist cannot request that variance. The Board routes it to the referring health care provider, whose re-evaluation it treats as the check on whether the treatment is still adequate.

New York also gates who bills at all. A physical therapist needs Board authorization to treat injured workers, plus a referral from the treating medical provider. Bills go on the CMS-1500 with a medical narrative attached, submitted electronically through a Board-approved submission partner. And in their reports, PTs may comment on work status and nothing beyond it. Not causality, not impairment.

None of that is negotiable, because none of it came from a contract.

Why can’t your EHR check workers’ comp eligibility?

Because a comp carrier is not a health plan. HIPAA’s rules cover three kinds of entity, and health plans are one of the three. That same definition excludes what federal law calls excepted benefits, and workers’ compensation sits on the excepted list. So the 270 request your system fires at a commercial plan has no counterpart in comp. Nothing in the transaction rules obliges the carrier to answer one.

Intake does that work instead. Claim number, adjuster name and a direct line, employer, date of injury, accepted body part, and the authorization on file with its visit count and expiry. Capture it when the visit is booked, or capture it during an appeal. Those are the two options.

How you send the bill decides when you get paid

California is the clearest example on the books. Send an itemized bill electronically, priced at or below the official medical fee schedule. Labor Code section 4603.4 then gives the claims administrator 15 working days to pay it, with an explanation of review. Send the identical bill on paper and section 4603.2 gives them 45 days, with a 15 percent increase plus interest if they blow the deadline.

Now the other half. California claims administrators have been required to accept electronic bills since those regulations took effect on October 18, 2012, updated again in October 2015. Participation is optional for the provider.

Read those two paragraphs together. A California practice still printing comp bills has chosen a 45-day clock over a 15-working-day one, and a late-payment penalty is all it gets for the trouble. That is not a software problem. It is a habit nobody has revisited since 2012.

There is no patient balance to fall back on

An underpaid commercial claim has a second act. Patient responsibility, a statement, a payment plan, the collections sequence every front desk already knows. Comp closes that door by statute. Florida’s puts it flatly: a health care provider “may not collect or receive a fee from an injured employee within this state, except as otherwise provided by this chapter.” Go find the equivalent sentence in your own state’s act before you assume there is a second act.

That changes the arithmetic on a denial. When a commercial claim bounces, the cost of the appeal gets weighed against what the patient still owes you anyway. Where the statute bars collecting from the injured worker, there is no anyway. The carrier pays the schedule or the visit was free.

Three numbers, split by payer class

Days from date of service to payment, so a comp lag stops hiding inside a blended AR figure. Denials with their reasons, kept separate from clearinghouse rejections. Visits billed against visits authorized. That is where comp revenue quietly leaks. The twenty-fifth California visit and the New York variance nobody requested are the same failure, found a month too late.

All three are reports, not projects. In Orion, every authorization sits on the case with its payer, dates and approved visit count, counting down as visits happen. Eligibility runs at booking on both plans for the payers that answer one, and claims get counted and aged off the same ledger the payments post to. Comp will still ignore an eligibility request, and no software changes that. What software decides is whether the comp case turns visible before it goes wrong.

Every rule in this post is published, down to the section number. That is the encouraging part. Pull your state’s fee schedule and its billing regulations this week, and if you treat injured workers in two states, pull both. Put the differences where the front desk can see them. The states will not agree, and the gap between them is your margin.