In the world of physical therapy, few issues generate more confusion than billing manual therapy (97140) on the same day as therapeutic exercise (97110) or therapeutic activities (97530). These combinations trigger NCCI edits, which are bundling rules designed by CMS to prevent duplicate or overlapping payment. If you submit them without justification, one line is automatically denied. If you unbundle them incorrectly with modifiers, you risk post-payment audits.
The 2025 NCCI Medicare Policy Manual explains that the intent of the initiative is to promote correct coding and reduce fraud, but in practice, it creates daily billing dilemmas for therapists. The modifier 59 XS is often the key to resolving these edits, but its use requires precise clinical and documentation support. The Office of Inspector General (OIG) has repeatedly warned that modifier misuse leads to improper payments, which is why both contractors and recovery auditors target therapy claims for review.
This article explores the basics of ncci edits, common therapy edit pairs, when and how to use modifiers correctly, and how to document in a way that withstands audits.
NCCI basics for therapy: Understanding how edits shape PT billing in 2025
The National Correct Coding Initiative (NCCI) is a set of coding edits applied by Medicare (and many commercial payers) to prevent unbundling, reporting two services separately that should be included as one. For therapy, NCCI edits are particularly relevant because many interventions overlap in purpose, body region, or therapeutic intent.
The CMS therapy services page reminds providers that NCCI edits apply equally to in-person and telehealth therapy claims.
These edits are organized into two categories:
Column 1/Column 2 edits:
The column 2 code (often 97140) is bundled into the column 1 code (97530 or 97110) unless a modifier shows distinct service.
Mutually exclusive edits:
Two codes that can’t reasonably be performed together.
Failure to comply results in automatic denials, which can add up quickly for therapy practices that rely heavily on combinations of exercise, activities, and manual therapy.
Why are the Typical Pair Services (97140 ↔ 97530) bundled?
The NCCI manual explicitly identifies 97140 (manual therapy techniques) and 97530 (therapeutic activities) as an edit pair. The rationale is that manual therapy often facilitates functional activity, mobilizing a joint before guiding a patient through transfers, for example. If both services are reported for the same body region, CMS considers them duplicative.
Similarly, 97140 with 97110 (therapeutic exercise) is bundled, since manual therapy may be integral to enabling exercise. To report both, you must demonstrate that the interventions were performed on different anatomical regions or for distinct functional purposes, and this must be supported by documentation.
PROMBS’s Specialties page highlights that these edit pairs are among the top denial triggers for therapy providers in outpatient settings.
Why Physical Therapy Claims Get Denied
Beyond 97140 with 97530 or 97110, therapists encounter other frequent NCCI edits. For example:
97110 with 97530:
Therapeutic exercise and therapeutic activities can be considered duplicative if performed for the same goals.
97535 (self-care/home management training) with 97530:
Overlap occurs when ADL training and therapeutic activities both address similar functional goals.
CMS’s NCCI manual provides a full list of edits, but therapy audits often hone in on just a handful of high-volume codes.
A 2018 OIG report on outpatient physical therapy found that more than half of reviewed claims contained errors, many of which were coding or documentation failures related to edits.
Case example: A PT bills 97530 for functional gait training and 97110 for therapeutic exercise, both addressing lower extremity strengthening. Without clear documentation showing distinct goals (e.g., exercise for strength vs activities for community ambulation), one line will be denied.
Proper use of modifier 59 and XS and distinguishing services across regions and functions
Modifiers are the tools CMS gives providers to communicate that an edit pair truly represents separate, payable services. However, they must be used with precision. The modifier 59 signals a distinct procedural service, while its subset modifiers (XE, XS, XP, XU) clarify the type of distinctness.
- XS = Separate structure, e.g., different anatomical site.
- XE = Separate encounter.
- XP = Separate practitioner.
- XU = Unusual non-overlapping service.
CMS encourages providers to use the more specific XS instead of generic 59 when distinct body regions justify billing both services.
When a distinct service allows 59/XS to override an edit pair
An appropriate use case might be: a therapist mobilizes the cervical spine (97140) and separately performs therapeutic activities for the right shoulder (97530). Because the anatomical regions are distinct and documentation supports the separation, appending modifier 59 XS is justified.
PROMBS’s Mastering Modifiers 59, 25, and 91 illustrates that specificity in modifier use reduces denial risk and demonstrates compliance to auditors.
Examples that don’t qualify for modifier 59 XS
By contrast, performing joint mobilizations to the lumbar spine followed by trunk stabilization activities is not distinct. Both address the same anatomical region and functional goal. Adding 59 or XS in this case would be misuse, something the Government Accountability Office highlights as a major source of improper payments.
Documentation to unbundle services and build an audit proof clinical record
When billing 97140 together with 97530 or 97110, modifiers like 59 XS only carry weight if your documentation makes it absolutely clear that the services were distinct. CMS has been explicit in the 2025 NCCI Policy Manual: a modifier on its own is never enough. The clinical record must show what was done, where it was done, why it was needed, and how it served a different functional purpose from the bundled service.
Why documentation is the deciding factor
Every claim with modifier 59 XS is essentially a flag. Medicare contractors and auditors know that this modifier is commonly misused, so they often request supporting notes. If your documentation does not specifically differentiate body regions, functional goals, or clinical rationale, the claim is at risk of denial or recoupment. The OIG report on outpatient physical therapy compliance reinforces this point, showing that insufficient notes were the leading cause of failed reviews.
Elements of audit proof therapy documentation
To withstand scrutiny, your notes should:
Identify the anatomical site clearly:
Instead of writing “manual therapy performed to the shoulder,” specify “manual joint mobilization performed to the left glenohumeral joint.” That level of detail ties the service to a distinct region.
Provide a clinical rationale:
Don’t just say “manual therapy performed.” State the therapeutic reason, such as “to improve capsular mobility and decrease pain limiting range of motion.”
Define the functional goal of the paired service:
Distinguish the timing and sequencing:
Document how long each intervention lasted and clarify that they were not part of the same bundled activity. For instance: “97140 performed for 10 minutes on cervical spine, followed by 15 minutes of therapeutic activities for right shoulder lifting mechanics.”
Using SOAP notes to unbundle effectively
Structured formats like SOAP make it easier to capture the separation CMS expects:
Subjective: Patient reports neck stiffness interfering with reaching overhead.
Objective: Decreased cervical ROM; functional limitation in lifting objects above head.
Assessment: Manual mobilization required for cervical spine mobility; functional activity training required to improve upper extremity lifting capacity.
Plan: Continue manual therapy for cervical spine; add functional lifting tasks for overhead reach.
This explicit linking of each service to a different body region and outcome creates what CMS calls “audit-proof documentation.”
How do NCCI edit pairs and how modifiers 59 and XS apply?
Because NCCI edits are technical and easy to misinterpret, CMS provides clear guidance in the 2025 NCCI Medicare Policy Manual that shows which CPT codes are bundled together and under what conditions. For therapy, the most common edit pairs include 97140 (manual therapy) billed with either 97530 (therapeutic activities) or 97110 (therapeutic exercise). These combinations are often denied unless a modifier demonstrates that the services were distinct.
The table below summarizes how the edits apply, when a modifier such as 59 XS may be justified, and when services remain bundled. It is not a replacement for the official CMS policy manual, but rather a quick operational snapshot. CMS stresses that modifiers should only be appended when documentation supports separate anatomical sites or distinct functional purposes, not simply to bypass an edit. PROMBS reinforces this guidance in its Mastering Modifiers 59, 25, and 91 resource, which shows therapy-specific examples of correct and incorrect modifier use.
| Code Pair | Default NCCI Rule | When Modifier 59 or XS Applies |
|---|---|---|
| 97140 + 97530 | 97140 bundled into 97530 | If manual therapy is performed to one body region (e.g., cervical spine) and therapeutic activities address another (e.g., sit-to-stand training for hips) |
| 97140 + 97110 | 97140 bundled into 97110 | If mobilization is performed on one joint (e.g., shoulder) and exercise is performed for a different region (e.g., lower extremity strengthening) |
| 97110 + 97530 | May be bundled if addressing same goal | If exercises build strength in one context while activities focus on a separate functional skill, such as gait training |
Using the table in staff training helps therapists and billers visualize when it is appropriate to override an NCCI edit and when it is not. The OIG’s therapy compliance reports make it clear that misuse of modifiers is one of the leading causes of overpayments in physical therapy, which is why CMS expects practices to reference tools like this and apply modifiers sparingly, only when documentation is clear and defensible.
Did You Know? According to CMS Payment Integrity data, modifier 59 is among the most misused modifiers in Medicare billing. The OIG has noted that in therapy services, over 40% of sampled claims with modifier 59 lacked sufficient documentation. This makes therapy coding a top audit target for MACs and RACs.
Why auditors are focusing on NCCI edits in physical therapy billing
Therapy services have been under the compliance microscope for years because they consistently rank among the highest for improper payment rates in Medicare. The Office of Inspector General (OIG), in its audit of outpatient physical therapy claims, found that 61% of claims did not meet Medicare requirements, with a large proportion linked to insufficient documentation or incorrect modifier use. NCCI edits play a central role here: when 97140 is billed with 97530 or 97110, auditors often find that modifiers like 59 were applied without enough evidence to prove the services were truly distinct.
The Government Accountability Office (GAO) has also emphasized in its Medicare payment oversight reports that therapy claims remain vulnerable to overpayments because of overlapping CPT codes and inconsistent application of NCCI rules. For auditors, NCCI edits are “low-hanging fruit”, easy to detect via automated claim filters and rich in error rates that justify further review.
This is why Medicare Administrative Contractors (MACs) and Recovery Audit Contractors (RACs) specifically flag physical therapy claims with high volumes of modifier 59 XS use. CMS explains in the 2025 NCCI Policy Manual that modifiers should be applied sparingly and only when documentation is airtight. Clinics that fail to follow this guidance risk post-payment recoupments, compliance penalties, and even referral to OIG for further investigation.
How clinics can build workflows that prevent bundling errors in therapy billing
The most effective way to reduce risk from ncci edits is to integrate compliance safeguards into daily workflows rather than treating them as an afterthought.
Leverage technology
Many modern practice management and EHR systems can be configured to flag edit pairs like 97140↔97530. CMS itself encourages the use of claim scrubbers to identify missing or misapplied modifiers before submission, as highlighted in the therapy services compliance resources. Clinics that configure their systems to alert staff when claims approach risky combinations see fewer denials and reduced rework.
Standardize staff training
Audit proactively
Rather than waiting for MACs or RACs, clinics should perform internal audits every quarter. This involves pulling a sample of claims where modifier 59 XS was applied and verifying that documentation supports unbundling. The HHS OIG has stressed in its compliance program guidance that internal monitoring is the strongest defense against overpayment demands.
Use documentation templates
Incorporating SOAP-based prompts into EHR templates ensures therapists always capture anatomical site, rationale, and functional goals. PROMBS’s CMS-1500 Claim Form Guide shows how these details align with claim line-level modifiers, helping clinics tie together notes and billing.
By embedding these workflow strategies, clinics can align with CMS’s expectations, protect revenue, and minimize the risk of being flagged in future audits.
Conclusion
Avoiding bundling errors in physical therapy billing, particularly when reporting 97140 together with 97530 or 97110, requires more than technical knowledge of CPT codes. It demands a full compliance strategy that integrates coding rules, modifier use, and documentation discipline into daily practice. The CMS 2025 NCCI Policy Manual sets the official framework, and the OIG and GAO continue to flag therapy claims as high risk because of modifier misuse and insufficient documentation.
For clinics, the pathway to compliance begins with building knowledge and accountability at every level. Clinicians need to understand when services are distinct enough to warrant a modifier, and billers need to ensure that claim forms reflect those distinctions line by line. Internal resources like PROMBS’s Mastering Modifiers 59, 25, and 91 and the CMS-1500 Claim Form Guide are valuable for translating complex CMS rules into practical workflows, while external sources such as the CMS therapy services page offer authoritative updates that clinics should review regularly.
Ultimately, success lies in blending compliance with operational efficiency. Technology like claim scrubbers and EHR alerts reduces the chance of human error, while internal audits and staff training reinforce a culture of accuracy. When documentation is clear, modifiers are applied appropriately, and workflows are designed with compliance in mind, practices are far less likely to face denials or recoupments.
Physical therapy billing is under ongoing scrutiny, but CMS does not prohibit billing these code combinations, it simply requires providers to demonstrate that the services were medically necessary and distinct. By embracing the guidance from CMS and OIG while drawing on PROMBS’s operational resources, therapy practices can achieve the balance between protecting revenue and maintaining compliance. In doing so, they safeguard not only their bottom line but also their ability to deliver essential care to patients who rely on them.
