Occupational therapy gets its own Medicare threshold. Physical therapy and speech-language pathology share one annual amount, while OT has a separate one, so a patient seeing both a PT and an OT in the same year is tracked against two different limits. Practices that lump the two together apply the KX modifier at the wrong time and invite denials or medical review.
That’s one of several places where OT billing looks like PT billing but isn’t. The evaluation codes are different, assistants use a different modifier, and hand therapy brings custom orthoses that are billed under supply codes instead of CPT.
Key Takeaways
- OT evaluations bill by complexity as 97165, 97166, or 97167, with 97168 for re-evaluation.
- Medicare requires the GO modifier on OT services and the CO modifier when an occupational therapy assistant furnishes more than 10% of a service, which pays at 85%.
- OT has its own Medicare KX threshold, separate from the combined threshold for PT and speech therapy.
- Timed OT codes follow the same 8-minute rule as PT for Medicare, while many commercial plans count minutes per code.
- Custom splints and orthoses bill under HCPCS L-codes, and the orthotic fitting and training bill separately.
OT Evaluation and Treatment Codes
OT evaluations are untimed and billed once at the complexity the documentation supports, based on the patient’s occupational profile, the performance deficits identified, and clinical decision-making. 97165 is low complexity, 97166 moderate, and 97167 high. A re-evaluation (97168) needs a new clinical finding, a significant change in condition, or a failure to respond to the plan of care.
Most OT treatment codes are timed in 15-minute units. Medicare converts total timed minutes to units under the 8-minute rule, the same method used for physical therapy, while many commercial plans require at least 8 minutes per code.
- 97535 (self-care and home management training, including activities of daily living)
- 97530 (therapeutic activities using functional tasks)
- 97110 (therapeutic exercise)
- 97112 (neuromuscular re-education)
- 97129 and 97130 (cognitive function intervention, first 15 minutes and each additional 15 minutes)
- 97533 (sensory integrative techniques)
- 97542 (wheelchair management and training)
- 97760 and 97763 (orthotic management and training, initial and subsequent encounters)
- 97755 (assistive technology assessment)
Documentation has to show why each minute needed a therapist’s skill. A note describing ADL training should name the task, the cues or adaptations used, and the patient’s level of independence, not just “practiced dressing.”
Medicare Rules for OT
Every OT service billed to Medicare carries the GO modifier. When an occupational therapy assistant furnishes more than 10% of a service, the line also needs the CO modifier, and Medicare pays it at 85% of the fee schedule. Since 2025, Medicare allows OTs in private practice to supervise OTAs under general supervision, but state practice acts and some commercial plans still require closer supervision, so the stricter rule applies.
Medicare requires a plan of care certified by a physician or NPP, generally within 30 days of the evaluation and recertified at least every 90 days, with a progress report at least once every 10 treatment visits. Claims above the annual OT threshold need the KX modifier, which attests that the services are medically necessary and documented. The threshold amounts change each year, and the OT amount is tracked separately from the combined PT and speech amount.
Our physical therapy page covers the 8-minute rule in more detail, and our speech therapy page covers the shared cognitive codes.
Hand Therapy and Custom Orthoses
Many OTs specialize in hand and upper extremity therapy, which brings custom splinting into the claim. The orthosis itself bills under an HCPCS L-code that describes the device, such as a custom-fabricated wrist-hand orthosis, and the time spent fitting it and training the patient bills as 97760. Later visits to adjust or check the orthosis bill as 97763.
Some payers, including Medicare, require the provider billing orthoses to be enrolled as a DMEPOS supplier, and many require the L-code claim to go to a different contractor than the therapy services. Practices that fabricate splints without checking each payer’s orthotic rules often find the device portion denied even when the therapy is paid.
Pediatric OT, Medicaid, and Other Payers
Pediatric OT for developmental delays, sensory processing, and fine motor skills is largely covered by Medicaid, which has to cover medically necessary therapy for children under 21 through the EPSDT benefit. Prior authorization rules, visit limits, and covered diagnoses vary by state and managed care plan, so prior authorization has to be checked plan by plan.
Commercial plans often set annual visit limits shared across PT, OT, and speech, or exclude developmental conditions that aren’t tied to a medical diagnosis. Workers’ compensation and auto claims follow state fee schedules and usually require progress reports sent to the carrier before more visits are approved. Driver rehabilitation and ergonomic assessments are rarely covered by health plans and are often billed directly to the patient or employer.
Occupational Therapist Credentialing
Licensure and certification
Payers verify each OT’s state license and, for most networks, certification from the National Board for Certification in Occupational Therapy. Specialty certifications such as Certified Hand Therapist (CHT) can matter for plans that limit hand therapy to qualified providers.
Medicare enrollment
OTs in private practice enroll with Medicare individually through PECOS and reassign benefits to their group, and the group enrolls as well. OTAs don’t enroll and can’t bill under their own number. Their services are billed under the supervising OT with the CO modifier.
Commercial and Medicaid networks
Each commercial and Medicaid managed care plan credentials OTs separately, often through CAQH ProView, and some plans route therapy through a network manager with its own enrollment. Until a plan approves the therapist, their visits can’t be billed to it, which is why you can’t bill what you can’t credential.
Occupational Therapy Billing FAQs
What are the OT evaluation codes?
97165 for low complexity, 97166 for moderate complexity, and 97167 for high complexity. A re-evaluation bills as 97168.
Does OT share the Medicare KX threshold with physical therapy?
No. Physical therapy and speech-language pathology share one annual threshold, and occupational therapy has its own. Claims above the OT threshold need the KX modifier.
When is the CO modifier required?
When an occupational therapy assistant furnishes more than 10% of a service billed to Medicare. Medicare pays CO lines at 85% of the fee schedule.
Does Medicare require a physician referral for OT?
Medicare requires a plan of care certified by a physician or NPP, generally within 30 days of the evaluation and recertified at least every 90 days. The certification is what supports payment.
How are custom splints billed?
The device bills under an HCPCS L-code, and fitting and training bill as 97760. Some payers require DMEPOS supplier enrollment to bill the device.
Is functional limitation reporting still required for OT?
No. Medicare ended functional limitation G-code reporting in 2019. Functional goals and progress still have to be documented.
Why Occupational Therapists Choose Medwave for Billing & Credentialing
Medwave handles occupational therapy billing, credentialing, and payer contracting under one team. We track the OT threshold separately from PT and speech, apply GO, CO, and KX where they belong, route orthotic claims to the right contractor, and keep plan of care certifications and authorizations current. That’s how we hold a 98% clean claim rate.
On credentialing, we enroll OTs and groups with Medicare, Medicaid, and commercial plans, including therapy network managers, with a 60-day average turnaround.
Contact Medwave below to see how we can support your occupational therapy practice.