Summary:
A national rise in high-level coding reflects both increasing patient complexity and systemic financial pressures, leaving PT clinics balancing compliance, reimbursement, and documentation culture.
Key Takeaways:
- Coding intensity is rising due to aging patients, shrinking reimbursements, and documentation technology that nudges clinicians toward higher levels.
- Clinics of all sizes face compliance risks, making proactive audits, staff training, and clear cultural expectations essential.
- AI and EMR tools can help streamline documentation but must be used responsibly to support accuracy, not inflate complexity.
By Rob Helton, DPT
A recent national study confirmed what many clinic leaders have felt in their daily operations: coding intensity is climbing. For instance, in physician offices, the share of visits billed at a level-four complexity (CPT 99214) rose from 38.5% in 2018 to 45% in 2023. Urgent care centers and emergency departments show similar shifts toward higher-acuity codes, even for common conditions like rashes, coughs, or nausea.
At first glance, the rise in higher-level codes makes sense. As the population ages, patients are dealing with more chronic conditions and often showing up with more complicated needs. But patient complexity is only part of the story. Documentation strategies, payer requirements, and reimbursement cuts are also pushing coding patterns upward as clinics need to optimize to stay in business. For physical therapy clinics, these pressures create a difficult balance: how to document care accurately, stay compliant, and maintain financial stability while trying to keep providers focused on patients, not paperwork.
As both a practicing therapist and now an SVP of a widely used PT software and EMR product, I’ve seen this issue from both sides. I believe the recent rise in higher-level coding is a warning sign. Documentation and coding are becoming battlegrounds for financial survival. This is not what clinicians signed up for, but it’s a reality that owners need to address head-on.
Why Coding Intensity is Rising
When I started as a therapist, billing guidance often came from consultants hired by the health organization, who would show how to properly document in order to appropriately justify a higher complexity level. It wasn’t about gaming the system. It was about making sure you got paid fairly for the work you actually did.
Today, technology has replaced sticky notes and cheat sheets. Software can scan a diagnosis, payer, and plan of care, and then nudge clinicians to include additional documentation elements to justify the higher level of clinical service. In many cases, this is appropriate coding. But there’s no question that technology, built to combat the shrinking reimbursement schedules, is fueling the shift toward high-level coding.
Therapists face the same dilemma I did years ago: payer fee schedules keep going down, and yet they’re expected to deliver more care at a higher quality with less reimbursement. If a tool promises to simplify documentation while assisting in optimizing reimbursement, it’s no wonder clinics adopt it.
Where Ethics and Compliance Intersect
But here’s the problem: optimization only works if it stays within compliance boundaries. Coding isn’t about maximizing; it’s about accuracy. Upcoding is a compliance risk. But so is downcoding. If a therapist under-reports what they did because they’re uncomfortable billing at a higher level, that’s also a problem. Appropriate coding sits in the middle, where documentation matches the clinical decision-making and services that actually occurred.
This is where clinic culture comes in. A tool can suggest higher levels, but ultimately it’s up to the clinician to decide whether the documentation truly supports that. That judgment line is the difference between support and risk. And as payer audit technology improves, clinics that blur that line will face consequences. What used to be occasional chart pulls has become large-scale data analysis. It’s no longer just about whether your paperwork passes a one-off review; it’s about whether your billing patterns stand up to statistical scrutiny.
What Small, Mid-Size, and Large Clinics Should Do
The right strategy depends on your size and resources. Small clinics with one to three providers face the biggest challenge due to knowledge scarcity. Regulations, payer rules, and documentation requirements change constantly. Without dedicated billing or compliance staff, it’s impossible to keep everything straight. Owners should invest in continuing education, lean on APTA and state associations, and create simple training routines like lunch-and-learns that keep staff informed. As of this writing, I don’t think that generalized AI assistants (ChatGPT, Grok, etc.) are at the right level of sophistication to advise coding practices, yet.
Growing practices with five to 10 clinics need visibility into trends across locations. Someone on your team must own compliance review as part of their role. At this point, specialized compliance and note scanning tools may make sense depending on your payor mix, the experience and culture of the team, and your own willingness to pay for risk indexing and peace of mind. Dashboards, compliance audits, and tools that highlight discrepancies in documentation and billing need to be someone’s full-time job—or several individuals’ part-time role.
Enterprise groups with hundreds of clinics across states face both cultural challenges. Each clinic, especially if acquired into the enterprise, has its own norms, which are sometimes decades old. Standardizing documentation practices across regions requires both technology and leadership. EMR integrations that prompt providers in real time, combined with analytics that flag outliers, can help enforce consistency and reduce audit exposure. At this level, several individuals are likely necessary to manage audit risk, training, compliance checks, and outreach from clinicians. Compliance tools, likely utilizing AI, are becoming necessary to manage global risk, especially with the variances in payor requirements.
No matter your size, one truth holds: billing is a cultural issue. What your staff believes is normal becomes the baseline, whether it’s correct or not. Changing that culture takes more than policies; it requires daily reinforcement, coaching, and feedback loops built into the workflow.
Billing is Culture
Documentation practices are shaped by what people teach, what gets reinforced, and how errors are handled. Early in my career, I had a billing manager who called me every Friday to review mistakes. It was tedious, but it taught me that feedback has to be ongoing.
Today’s equivalent is building those nudges directly into the EMR. If a therapist hasn’t documented a home exercise program, they should be alerted to that before signing off. If a plan of care doesn’t justify a complexity level, it should be flagged in the moment, not weeks later in an audit. These small shifts can protect reimbursement, reduce denials, and keep compliance on track.
The Promise and Risk of AI
A lot of people are excited about AI scribing, and it’s understandable. Everyone agrees that the best place to stop compliance risks and denials is at the point of documentation by the clinician. Nobody wants to be stuck finishing notes after a long day of patients. These tools can take the quick shorthand you jot down in the moment and turn it into a full, defensible note almost instantly.
But there’s also a real risk. If clinicians blindly accept what the system generates, they could end up with documentation that inflates complexity. Once it’s in the record, it’s as if the therapist said it. That creates compliance exposure.
The solution isn’t to avoid AI, but to use it responsibly. AI should accelerate documentation, not replace clinical judgment. Clinic leaders must set clear expectations: providers are accountable for every word in their notes, even if a system drafted it.
Where the System Needs to Go
While clinics adapt internally, broader reforms could ease the burden. Electronic prior authorization is one promising step. Imagine documenting a low back pain evaluation and receiving a payer response within seconds. That would save clinics hundreds of wasted hours per year. Federal guidelines are moving in this direction, but adoption will take time.
Long-term, payers and providers need to simplify the coding environment itself. Right now, it’s so complex that many clinics feel forced to lean on AI or outside tools just to keep up. If insurers want providers to stop using technology to decode their requirements, they need to make those requirements simpler.
What Clinic Leaders Can Do Now
The rise in higher-level coding isn’t going away. The trend is real, and the financial and compliance stakes are only growing. For clinic owners, the key steps are clear:
- Invest in education. Make sure your staff understands evolving payer rules and documentation requirements.
- Audit proactively. Don’t wait for payers to flag problems. Review your own data and correct issues early.
- Adopt the right tools. Choose technology that supports accurate documentation, not shortcuts.
- Shape the culture. Reinforce that billing is not about maximizing, but about documenting what truly happened.
- Prepare for audits. Build defensibility into your documentation so your coding stands up to review.
In Closing
The rise in higher-level coding reflects both patient realities and systemic pressures. But at the end of the day, it’s not just a coding issue; it’s a culture issue. Clinics that train their staff, use tools responsibly, and reinforce compliance on a daily basis will not only protect reimbursement but also safeguard patient trust. After all, the goal isn’t to bill higher. The goal is to bill right.
Rob Helton, DPT, is senior vice president, Product, at WebPT, which offers an end-to-end practice experience management (PXM) platform designed specifically for rehab therapy professionals and solutions to help providers optimize operations, improve patient outcomes, and drive business success.
