CPT (Current Procedural Terminology) codes are five-digit numbers that describe every medical service or procedure. Your doctor, hospital, and insurance company use them to communicate exactly what was done. Every line on your medical bill has a CPT code, and knowing the code lets you look up what Medicare pays for that same service.

Why do providers charge so much more than Medicare pays?

Providers set their own "chargemaster" prices, which are essentially list prices. Medicare pays a fixed rate based on the resources each service actually requires (the RVU system for procedures, or the Clinical Lab Fee Schedule for lab tests). Commercial insurers typically pay 150% to 250% of Medicare rates. Uninsured patients are often billed the full chargemaster price, which can be 2x to 30x what Medicare pays.

Can I use Medicare rates to negotiate my bill?

Yes. Medicare rates are the closest thing to a "fair price" benchmark in U.S. healthcare. When negotiating, ask the provider what they accept from Medicare for the same CPT code. Most providers will accept 150% to 200% of Medicare for cash-pay patients, which is still far less than their chargemaster price. Many hospital financial assistance policies also use a multiple of Medicare as their discount floor.

How are Medicare rates calculated?

For most procedures, Medicare uses the Resource-Based Relative Value Scale (RBRVS). Each CPT code gets three RVU components: Work (physician time and skill), Practice Expense (overhead), and Malpractice. These are multiplied by geographic adjustment factors (GPCIs) and a conversion factor ($33.4009 in 2026). Lab tests (80000-89999 range) use a separate Clinical Laboratory Fee Schedule with flat national rates.

CPT 97161

Physical Therapy Evaluation, Low Complexity (20 min)

CPT 97161 is the evaluation code billed on your first physical therapy visit. It establishes your diagnosis, baseline measurements, and treatment plan. Providers charge an average of $184.67 for the evaluation alone, but Medicare pays only $97.86 in an office setting (1.9x markup). The critical thing patients miss: this evaluation charge is separate from treatment. Your first PT session often generates the eval charge ($185) PLUS treatment codes done that same day (97110, 97140), making day one totals $300 to $500.

Updated May 2026Source: CMS Physician Fee Schedule

CPT 97161 at a Glance

Average provider charge: $184.67
Medicare physician fee (office): $97.86
Medicare physician fee (hospital): varies + separate facility fee
Typical markup: 1.9x over Medicare office rate

Evaluation type: Low complexity, single body area
When billed: First PT visit (establishes plan of care)
Duration: Approximately 20 minutes
Beneficiaries (2023): 1.4 million

How the Medicare Rate Is Calculated

Medicare does not set prices arbitrarily. Every procedure is valued using Relative Value Units (RVUs) across three components, then multiplied by a national conversion factor of $33.4009 (2026). Here is the exact math for a 97161 evaluation:

Component	What It Covers	Office (Non-Facility)	Hospital (Facility)
Work RVU	Therapist time, skill, and clinical judgment	1.20	1.20
Practice Expense RVU	Rent, staff, equipment, supplies	1.52	0.32
Malpractice RVU	Professional liability insurance	0.07	0.07
Total RVU		2.79	1.59
x $33.4009	2026 conversion factor	$97.86	$53.11

Your first PT visit costs more than you expect: The $97.86 (or $185 billed) covers only the evaluation. Most PTs also perform treatment on day one, adding 2 to 4 units of therapeutic exercise (97110), manual therapy (97140), or neuromuscular re-education (97112). Each unit adds $30 to $50 in Medicare value (or $50 to $100 at billed rates). Total first-visit charges of $300 to $500 are typical and legitimate.

Medicare Rate by State

Medicare adjusts the national rate based on your location using Geographic Practice Cost Indices (GPCIs). The same 97161 evaluation pays differently in each state, ranging from about $72 in Arkansas to $96 in Alaska (a 33% spread).

Medicare Rate by State (2026)

Medicare adjusts payments by location using Geographic Practice Cost Indices (GPCIs). Select your state to see the adjusted rate.

Sample State Rates (Office Setting)

State	Medicare Pays	Avg. Charge	Markup
Texas (Austin)	$80.93	$184.67	2.3x
California (Los Angeles)	$85.66	$184.67	2.2x
New York (Manhattan)	$87.21	$184.67	2.1x
Florida (Fort Lauderdale)	$81.12	$184.67	2.3x
Ohio	$75.39	$184.67	2.4x
Mississippi	$72.41	$184.67	2.6x
Arkansas	$71.82	$184.67	2.6x
Alaska	$95.81	$184.67	1.9x

Rates shown are for the non-facility (office) setting using 2026 GPCIs and the $33.4009 conversion factor. The average provider charge of $184.67 is the 2023 national average from CMS utilization data. Actual charges vary by provider.

What Insured Patients Actually Pay for a 97161 PT Evaluation

If you have health insurance, you do not pay the provider's full charge of $184.67. Your insurer has a negotiated rate with the provider, typically 120% to 180% of the Medicare rate. For a 97161 evaluation, that negotiated rate is usually $120 to $175. What you owe depends on your plan design:

Your Situation	What You Likely Pay	How It Works
Copay plan (deductible met or N/A)	$30 to $75	Flat copay per PT visit (eval counts as one visit)
Coinsurance plan (deductible met)	$24 to $35	20% of the negotiated rate ($120 to $175)
High-deductible plan (deductible NOT met)	$120 to $175	You pay the full negotiated rate until your deductible is met
Medicare Part B	$19.57	20% of the Medicare-approved amount ($97.86)
Medicaid	$0 to $5	Minimal or no cost-sharing in most states

Does the evaluation count toward your visit limit? Most insurance plans count the initial evaluation as one of your allowed PT visits. If your plan covers 20 PT visits per year, the evaluation uses one of them. Some plans explicitly separate evaluation visits from treatment visits, but this is uncommon. Call your insurer before your first appointment to ask: "Does the PT evaluation count against my visit cap?"

Should You Use Insurance or Pay Cash?

If you have a high-deductible health plan and have not met your deductible, you are paying the full negotiated rate for your PT evaluation. This is typically $120 to $175 for the eval alone, plus $80 to $150 for same-day treatment codes. Many PT clinics offer a cash-pay rate of $100 to $150 for a full first visit (evaluation plus treatment), which can be cheaper than going through insurance.

When Cash-Pay Wins

You are unlikely to meet your deductible this year
The PT clinic offers an all-inclusive cash rate per session
Your insurance has a high PT copay ($50 to $75 per visit)
You want to see a specific out-of-network PT specialist

When Using Insurance Wins

You are close to meeting your annual deductible
You need many sessions (10 to 20 visits adds up fast at cash rates)
Your copay is low ($20 to $30 per visit)
You need insurance documentation for a workers comp or auto injury claim

Important for PT specifically: Physical therapy typically requires multiple visits (8 to 20 sessions over several weeks). Even if cash-pay is cheaper per visit, the total cost across all sessions matters more than the first visit alone. Calculate: (cash rate per session) x (expected number of sessions) versus (insurance rate per session) x (expected sessions), factoring in how close you are to your deductible.

Common Billing Problems with 97161

Surprise first-visit total (eval + treatment stacking)

Patients expect to pay one charge on their first PT visit, but actually receive an evaluation charge (97161, $185 average) PLUS 2 to 4 treatment units ($50 to $100 each). A first visit bill of $350 to $500 is common. This is legitimate billing, but rarely communicated upfront. Ask your PT clinic before your first visit: "What is the total expected charge for my evaluation day, including any treatment performed?" This avoids sticker shock.

Evaluation uses one of your limited PT visits

If your insurance plan covers 20 PT visits per year, the evaluation typically counts as visit number 1. Since the evaluation focuses primarily on assessment rather than hands-on treatment, some patients feel they "lost" a treatment visit. There is no way around this in most plans, but knowing it in advance helps you plan. If you have a limited number of visits, ask whether the therapist can maximize treatment on evaluation day so you get both assessment and therapy in one session.

Upcoding from 97161 to 97162 or 97163

Interestingly, Medicare pays the same rate ($97.86) for 97161 and 97162. But private insurers may pay differently for these codes. If your condition is a straightforward single-joint issue (simple knee pain, isolated ankle sprain), the evaluation should be coded as 97161 (low complexity). If it is coded as 97162 or 97163 without documented complicating factors, this may affect your insurance coverage or justify more treatment units than necessary.

Hospital-based PT facility fees

If your physical therapy clinic is owned by or affiliated with a hospital system, you may be charged a facility fee on top of the therapy charges. This can add $50 to $200 per visit. For PT, where you attend 2 to 3 sessions per week for 6 to 8 weeks, hospital facility fees can add $1,000 to $3,000 to your total cost of care. An independent outpatient PT clinic typically does not charge facility fees and is often significantly cheaper overall.

Related Physical Therapy Codes

Code	Description	Medicare (Office)	Avg. Charge
97161	PT evaluation, low complexity	$97.86	$184.67
97162	PT evaluation, moderate complexity	$97.86	$179.29
97163	PT evaluation, high complexity	$97.86	$195.00
97110	Therapeutic exercises (per 15 min)	$33.44	$62.00
97140	Manual therapy (per 15 min)	$31.70	$60.00

Frequently Asked Questions

How much does a physical therapy evaluation (CPT 97161) cost without insurance?

Without insurance, a physical therapy evaluation billed under CPT 97161 costs $120 to $275 depending on the provider and location. The national average charge is $184.67. Many PT clinics offer cash-pay rates of $100 to $150 for the initial evaluation. For comparison, Medicare pays $97.86 for this evaluation in an office setting. Remember that treatment charges are added on top of the evaluation.

Does the PT evaluation count toward my visit limit?

In most insurance plans, yes. The initial evaluation counts as one of your allowed PT visits. If your plan covers 20 PT visits per year, the evaluation uses one of them. Some plans separate evaluation visits from treatment visits, but this is less common. Ask your insurance company before your first appointment whether the evaluation counts against your visit cap.

Why is my first PT visit so expensive compared to follow-up visits?

Your first PT visit generates an evaluation charge (CPT 97161, averaging $185) PLUS any treatment codes performed that same day (such as 97110 for therapeutic exercises or 97140 for manual therapy). This means your first visit can total $300 to $500. Follow-up visits only include the treatment codes, typically $150 to $250 per session. The evaluation is a one-time charge that establishes your treatment plan.

What is the difference between 97161, 97162, and 97163?

These three codes represent PT evaluations at increasing complexity levels: 97161 is low complexity (single body area, straightforward clinical presentation), 97162 is moderate complexity (multiple body areas or complicating factors), and 97163 is high complexity (multiple systems with significant comorbidities). Interestingly, Medicare pays the same rate ($97.86) for 97161 and 97162. The complexity level affects documentation but does not always change the price.

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