Clarice Grote, MS, OTR/L

Clarice Grote, MS, OTR/L

How To Bill Occupational Therapy Under Medicare Part B

Medicare Part B is utilized in acute care, long-term care, outpatient, and Med B home health services. Billing occupational therapy under Medicare Part B can be complex as the responsibility to document and bill correctly typically falls on the clinician.

For those working under their own National Provider Identifier (NPI), accurate coding is even more important. If practitioners do not have a thorough understanding of how to bill Medicare, it could mean losing your license or underbilling for needed services.

Medicare Part B is billed through CPT codes in a fee-for-service model. Practitioners cannot bill cash for covered services for Medicare beneficiaries. Without a supplemental plan, beneficiaries will have a 20% copay for Part B services.

When looking for accurate information on billing and coverage, going directly to the source is important. The Medicare Benefit Policy Manual for Part B Services provides details on the type of services covered under Medicare Part B for Occupational Therapy. Chapter 15

Coding and Billing for Occupational Therapy Under Medicare Part B

AOTA’s Coding and Billing Page has numerous resources for members and non-members. The videos on billing are beneficial and easy to understand.

Evaluation Codes

Eval codes are used during the first visit. They are coded as low, medium, or high complexity based on patient factors. Although there are times associated with the description of each code, these are just guidelines and do not have to reflect the actual time spent on the evaluation.

Evaluation codes are untimed codes, so you receive the same amount of reimbursement regardless of if you bill eight minutes in the eval or 30. That said, legally, your billed time must accurately represent the time spent on the evaluation and subjective interviewing of the patient.

Evaluation typically consists of manual muscle testing, range of motion measurements, assessments, subjective interviewing, etc. Once you transition to education or prescribing exercises/activities, that is treatment vs evaluation. Knowing exactly when this transition occurs relies on the clinician’s clinical judgment.

During an eval can, and should, bill treatment codes with the evaluation. This time should be charged under treatment codes that fall under the 8-minute rule. Consider, how would you feel if you went to the doctor and all they did was evaluate you but not prescribe any treatment or provide education about the diagnosis? It should be rare only to charge an evaluation code.

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Timed Codes

The 8-Minute Rule is used for timed CPT codes. Billable time must be spent face-to-face with the patient. You must provide a skilled, reimbursable service that fits within the CPT code description.

Time spent before or after the session, such as chart reviews, interdisciplinary collaboration, or documentation, cannot be billed.

To charge a timed code, a minimum of 8 minutes of one-on-one, face-to-face care must be provided. There is then a 15-minute window between each unit of service, as demonstrated in the table below.

1 Unit8-22 minutes
2 Units23 – 37 minutes
3 Units38-52 minutes
4 Units53 – 67 minutes
5 Units68 – 82 minutes
Timed Code Unit Breakdown

OTA Modifier

As of January 2020, CMS required a modifier to indicate an occupational therapy assistant provided the services. This change was required as part of the Balanced Budget Act (BBA) of 2018 (the same bill that repealed the Therapy Cap). The use of the modifier is preparatory for a 15% reduction in reimbursement for services provided by OTAs starting January 1, 2022. AOTA is actively lobbying Congress to change the reduction and add exemptions for rural and medically underserved areas through the SMART Act. To learn more about the OTA modifier and payment differential check out this article.

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Occupational Therapy Assistant Supervision

Medicare Part B is the only setting that requires direct supervision for occupational therapy assistants and physical therapy assistants vs distant supervision. This means that an OT/PT must be on-site in person for an OTA/PTA to provide outpatient Part B services. This supervision cannot be provided through virtual means such as telephone or telehealth. There are temporary flexibilities allowed under the public health emergency, but there is no indication that these flexibilities will become permanent. AOTA and APTA have introduced the SMART Act in the House of Representatives to work on repealing the direct supervision require and standardize Medicare regulation.

This is the language from CMS:

“An occupational therapist must supervise OTAs. The level and frequency of supervision differs by setting (and by state or local law). General supervision is required for OTAs in all settings except private practice (which requires direct supervision) unless state practice requirements are more stringent, in which case state or local requirements must be followed. See specific settings for details. For example, in clinics, rehabilitation agencies, and public health agencies, 42CFR485.713 indicates that when an OTA provides services, either on or off the organization’s premises, those services are supervised by a qualified occupational therapist who makes an onsite supervisory visit at least once every 30 days or more frequently if required by state or local laws or regulation.”

Chapter 15: Medicare Benefit Policy Manual for Part B Services

Is there still a therapy cap?

No! The Therapy Cap was permanently repealed under the Balanced Budget Act of 2018. Medicare now has a therapy threshold and a targeted review. So there is no longer a point where Medicare cuts off therapy at a certain spending level. However, CMS does monitor for trends where clinicians or practices routinely bill over the thresholds. If a clinic or therapist routinely bills over the threshold, this indicates to CMS that the therapist/clinic may be involved in fraud by over-providing therapy that isn’t reasonably/necessary or skilled.

Therapy Threshold/ KX Modifier

The KX Modifier is utilized to indicate medical necessity, specifically for services over the therapy threshold. The threshold is typically updated annually so be sure to check Medicare guidelines each year. For 2021, the therapy threshold is $2110 for occupational therapy and $2110 for physical and speech therapy services. For 2022, the therapy threshold is $2150.

Of note, it is important to document medical necessity for therapy services in each note, not only when utilizing the KX modifier. Any claim may be denied for various reasons. Not just those above the threshold.

Targeted Medical Review

Services provided over $3000 for the calendar year may be subject to a targeted medical review. This means that not all claims will be reviewed. However, if you consistently bill over the threshold, your chances of being reviewed may increase. The purpose of the targeted review is to prevent bad actors from billing for unnecessary services. There is not a hard cap on therapy services. CMS does understand that some clients require extensive therapy and if your clinic routinely serves complex patients, CMS should be able to identify that in your submitted documentation.

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Diagnostic Coding


For example, if the patient’s diagnostic code is for a CVA, but does not include a code for left upper extremity hemiplegia, you can still use this code. The diagnostic code should reflect the patient’s diagnosis and the plan of care.

Bill the most relevant diagnosis. As always, when billing for therapy services, the diagnosis code that best relates to the reason for the treatment shall be on the claim, unless there is a compelling reason to report another diagnosis code. For example, when a patient with diabetes is being treated with therapy for gait training due to amputation, the preferred diagnosis is abnormality of gait (which characterizes the treatment). Where it is possible in accordance with State and local laws and the contractors’ local coverage determinations, avoid using vague or general diagnoses. When a claim includes several types of services, or where the physician/NPP must supply the diagnosis, it may not be possible to use the most relevant therapy diagnosis code in the primary position. In that case, the relevant diagnosis code should, if possible, be on the claim in another position. Codes representing the medical condition that caused the treatment are used when there is no code representing the treatment. Complicating conditions are preferably used in nonprimary positions on the claim and are billed in the primary position only in the rare circumstance that there is no more relevant code.

CMS Medicare Claims Processing Manual – Chapter 5 (bold added for emphasis)

So, if you use generalized weakness as your therapy code, CMS would expect that your plan of care will address weakness.

Therapy Diagnostic Coding – ICD-10 Coding Resources

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Merit-Based Incentive Payment System (MIPS)

MIPS is the value-based payment model for Medicare Part B. Occupational therapists and occupational therapy clinics may be subjected to MIPS depending on your patient caseload. You may also be able to opt in to MIPS. The general premise is that there are certain outcomes that are tracked for your patients, which provides a quality rating.

Check out the information in the link below to see if you or your clinic needs to be reporting to MIPS. OTs are eligible to opt-in even if not required to report to MIPS. –> AOTA Resources

Questions about Billing Medicare Part B?

There is a lot of misinformation out there on billing especially when it comes to Medicare. That is why it is so important to insure you get information from reputable sources. Don’t bet your license on your coworker’s opinion or a social media post.

To save you time searching for reliable resources, I put together a list of my favorite resources which you can find in my shop. I also go over billing, OT eval codes, and more in my Mastering OT Policy and Medicare Course.

Remember, always go to the source!

Other Resources

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hi there,

I’m  Clarice

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

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