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Clarice Grote, MS, OTR/L

Clarice Grote, MS, OTR/L

How Insurance Impacts Your Occupational Therapy Plan of Care

Health insurance is one of the many things that influence an occupational therapy plan of care. It’s a topic that no one likes to think about, but a reality nonetheless. Before we get into it, reflect on your own practice and consider how you include insurance in your occupational therapy plan of care right now. Does it have a big influence? Do you not really think about it? Do you discuss it with your patient?

Because of the different types of insurance and the different terminology, it can be overwhelming to tackle. However, I encourage every practitioner to consider that we expect our providers to be considerate of our insurance coverage when recommending services and prescriptions, and our patients expect the same of us.

There is a lot to consider when it comes to health insurance, so I’m starting a series on health insurance and how it impacts our occupational therapy plan of care as clinicians and patients access to care.

Podcast: Ep 4 – Insurance and how it impacts the OT plan of care

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Questions to consider when developing your OT Plan of Care

  1. Is occupational therapy covered by the health insurance plan?
  2. Are there visit limits?
  3. Does occupational therapy require pre-approval?
  4. Is there co-pay or coinsurance and can my patient afford it?
  5. What codes are not covered by the insurance plan?
  6. If insurance doesn’t cover OT, is there an opportunity to appeal?

Did that list get you thinking? There are a lot of ways that therapy is covered under health insurance. Discussing finances has always been considered a type of taboo conversation, but it is an important one to have with our patients.

The last thing we want is for patients not to come back to therapy because they didn’t feel comfortable discussing financial concerns …

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How Insurance Impacts Our Occupational Therapy Plan of Care

What a health insurance plan covers impacts everything from discharge planning, frequency of visits, modalities, to what CPT® codes we can bill. Understanding the basics of health insurance coverage was especially important as an acute care therapist because it informed my discharge recommendations.

In outpatient, how health insurance plans covered therapy impacted how often we can see a patient and what services we can bill for. It could be frustrating, but having a general awareness, allows us as clinicians to set our patients up for success. As an added bonus, it helps protect your job!

No one wants to be blindsided by a bill. So, imagine what would happen if we went over someone’s visit limit without knowing. We would unintentionally cause financial harm to either the patient or our employer.

Equal Care vs Equitable Care

Considering insurance in our occupational therapy plan of care is important for facilitating equitable care and outcomes.

For a personal example, when I worked in acute care in Missouri, Medicaid did not cover rehabilitative home health occupational therapy or outpatient therapy services. So, if I had a Medicaid patient, I would adapt my occupational therapy plan of care to make sure we focused more on caregiver training, provided additional handouts, and advocating for a longer hospitalization or other post-acute care options.

But if a patient had Medicare, I might not focus as much on the long-term management and caregiver education in my occupational therapy plan of care like I did with the Medicaid patient. I also might not spend as much time with them in acute care as I would with the patient on Medicaid because I know the Medicare patient will have more therapy between post-acute care, home health, and outpatient services, than the other patient.

Although it may sound inequitable to think about services this way, if we treat everyone equally, we are inevitably treating people inequitably because they don’t have the same access to OT and other services so they don’t have the same chance at achieving good outcomes.

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Talking to Patients about Your Plan of Care and Health Insurance

Bringing up finances with patients can be challenging as we may be afraid of insulting the patient, or we may not feel confident in our understanding of the policy enough to discuss it. But that’s why I’m writing this article! Having a better understanding of health insurance can help improve our ability to engage in these conversations.

When our providers recommend a treatment, scan, or procedure, one of our first questions would be, “how much does it cost?” Some clients may be afraid to ask for a variety of reasons, so it is important we bring it up.

Examples of Discussing Finances with Patients

  • Your copay is $XX per visit. Are you comfortable with continuing therapy X times a week?
  • Are there any financial concerns you have about therapy or our services?
  • Based on your goals for therapy, I anticipate we will need X visits. is that feasible with your schedule and budget?
  • Your insurance only covers X visits per year. Because of this, it is really important we stretch out your visits and use them wisely, which means it is all that more important you engage in therapy outside of our sessions. Do you have a place/time where you can do that?
  • Do you have any financial concerns about the equipment I’ve recommended?

These are just a few of the ways I’ve brought up financial conversations with patients. The only wrong way to bring up finances is to never to bring it up. The last thing we want is for patients not to come back to therapy because they didn’t feel comfortable discussing financial concerns about affording therapy, and we never brought it up.

Not only is it important for us as practitioners to understand the policy for our patients, but it is also required by the Code of Ethics.

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The Occupational Therapy Code of Ethics

The American Occupational Therapy Association (AOTA) Code of Ethics for Occupational Therapy requires that practitioners and students comply with all local, state, and federal laws and engage in legal billing practices. It can be hard to do that if we aren’t aware of the regulations and coverage requirements for health insurance plans. d

The two specific sections that most directly call out the need to consider health insurance in a plan of care are the Standards of Conduct: Professional Integrity, Responsibility, and Accountability and the Documentation, Reimbursement, and Financial Section. This is certainly not an exhaustive list.

Professional Integrity, Responsibility, and Accountability

  • Maintain awareness and comply with AOTA policies and Official Documents, current laws and regulations relevant to OT, and employer policies and procedures
  • 1F. Do not engage in illegal actions, directly or indirectly, harming stakeholders in OT practice (Justice)
  • 1J. Don’t exploit human, financial, or material resources for personal gain (Fidelity)
  • 1K. Don’t exploit a relationship to further one’s own financial or other interests (Nonmaleficence)

Documentation, Reimbursement, Financial

  • 3A: Bill and collect fees justly and legally (Justice)
  • 3B: ensure documentation for reimbursement is in accordance with the law (Justice) 
  • 3D: do not follow arbitrary directives that comprise the well-being of others such as falsification, plagiarism of documentation, or inaccurate coding (Nonmaleficence)

Health Insurance Types

The type of health insurance a patient has is possibly the second biggest influence in setting a plan of care behind clinical judgment. But at times, health insurance coverage is even above clinical judgment since we may like to see a patient more than what their health insurance allows. So, without further ado, let’s dive into the common types of health insurance.


Medicare is a national health insurance plan provided by the US federal government. It is available to adults 65 or older, individuals with disabilities, and individuals with End-Stage Renal Disease (ESRD). If you work with an older adult population, this will most likely be the most common type of insurance you see. And, a lot of plans mirror Medicare laws when determining their policies. Medicare consists of numerous different parts.

The two primary parts of Medicare we see are Medicare Part A and Medicare Part B. Generally speaking, Part A is hospital insurance and covers inpatient hospital stays, inpatient rehab, SNF, home health, and hospice. Part B is the medical insurance and covers DME and outpatient.

Medicare Advantage

Medicare Advantage (MA) is often confused with Traditional Medicare or Medicare Supplemental Plans. However, it is quite different. The main difference between Medicare and Medicare Advantage is that Medicare Advantage is run by private health insurance companies instead of the federal government. MA plans are also referred to as Medicare replacement plans or Medicare Part C, and you probably see advertisements for them on TV.

Advantage plans are required to cover the same things as Medicare, but patient access is more limited at times than with a traditional Medicare plan because Medicare Advantage plans have in-network and out-of-network providers and may also require pre-approval processes.

So although things may be covered, the patient may not actually be approved to receive certain services. Each Medicare Advantage plan is different so it is important to review each plan’s manual.

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Medicaid, not to be confused with Medicare, is a state-based health insurance policy typically available to children, low-income individuals, individuals with disabilities, or pregnant women. Factors that can influence Medicaid eligibility include income, household size, disability, family status, and others. Because Medicaid is state-based, eligibility requirements vary by state. So, it is difficult to make any broad statements about what Medicaid does and doe not cover.

Private Health Insurance

Private health insurance plans come in all shapes and sizes and cover a wide variety of items. Most people interact with private health insurance companies through their employer or through marketplace plans. Health insurance plans sold through the marketplace or through your employer have to meet the minimum standards of coverage established by the Affordable Care Act which includes coverage of occupational therapy.

Private Pay

Private pay is pretty straightforward in that it is the lack of health insurance. Someone who is considered private pay either lacks health insurance or their health insurance does not cover a specific service so they are paying out of pocket for this service.

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Common Health Insurance Terms

Visit Limitations

Some insurance types place limits on visits. These limits may be per episode of care or per year. Occasionally, practitioners can appeal for additional visits but other times they are a firm limit. If visits are a firm limit, the insurance company typically won’t cover additional therapy leaving the patient responsible for the costs.

Knowing when therapy visits start over impacts how they are utilized. Most likely, the visits refresh on the calendar year. So, how you set a plan in January would look different from your plan of care in December.

In January you may need to be more conservative with visits to anticipate any therapy needs later in the year but in December you can use up the visits as appropriate because the visits start over soon. Another consideration is if the visit limits are per discipline or are for all disciplines combined. The number of visits allowed varies drastically by plan and provider.


Coinsurance is the percentage of costs a patient pays after they have met their deductible. So, if you have a visit that costs $100 and your coinsurance is 20% after your deductible, you will owe $20 for that visit. Medicare patients have a 20% coinsurance for all Part B services. Since coinsurance is a percentage, the amount the patient owes varies with each service.


Copays are payments made by the patient in addition to the payment by the insurer. It is a fixed amount for each visit, regardless of if you have met your deductible. Copays are important to consider as they can significantly increase a patient’s cost and their ability to afford therapy.

Some copays can be well over $100 a visit, and I know I’d have a hard time justifying spending $200-300 a week on therapy. So, having an open conversation with our patients about their copays can help make sure we are setting a plan of care that both we, as clinicians, and the patient feel comfortable with.

Covered vs Approved – The Crusher of OT Plans of Care

One of the other issues I faced a lot, especially in acute care, was the issue of services being covered by health insurance but not always approved by health insurance. So, when a service is covered, this means that the health insurance plan lists the service as a benefit on their benefit manual.

This issue is when the beneficiary/patient calls their health insurance and asks “Is inpatient rehab covered by my health insurance?” the health insurance plan will say yes. Because technically speaking, it is a covered benefit.

However, just because a service is covered, does not mean the health insurance plan will approve the service. Some health insurance plans, require pre-approval or pre-authorization for certain services before giving the okay.

This means that the facility or therapy must submit documentation requesting services and then the insurance reviews the case and will make a decision on whether or not to pay for the service for that patient.

This can be a frustrating situation for clinicians and patients as the patient may be hearing one thing from their insurance provider (like that inpatient rehab is covered) but then the insurance may deny the approval to go to inpatient rehab so the service wasn’t approved. This situation can be difficult to navigate as it often takes a toll on the trust between providers and patients.

It can be hard to predict when health insurance companies will or will not deny coverage for certain items such as rehab or more visits, but if you have a patient with a type of health insurance plan that may deny coverage, it is important to not make guarantees to the patient such as, “your insurance will definitely approve rehab.”

The language we use in these scenarios is really important and it’s always good to check with your billing manager or case manager before discussing detailed discharge plans with the patient.

I recommend saying something along the lines of, “I think more therapy after discharge would be beneficial,” can be a helpful statement. It doesn’t make any promises about rehab, but tells the patient that more therapy may be needed when the discharge.

These are only a few of the considerations when it comes to health insurance. Overall, our patients expect us to consider these factors as do our employers. I take a pretty deep dive into these topics in the Mastering OT Policy and Medicare™ course which is included in the Amplify OT Membership free of charge!

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Clarice standing in a light room smiling wearing black pants and a light green puff sleeve shirt

hi there,

I’m  Clarice

Occupational therapist & medicare specialist helping practitioners understand policy, engage in advocacy, and own their value!

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