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Occupational Therapy Medical Billing & Coding Guide for 2021

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Occupational therapy is a professional field that employs assessment and intervention to develop, recover, and maintain the functions of everyday human activities.

Occupational therapy evaluations typically include an occupational profile, patient medical and therapy histories, relevant assessments, and the development of a plan of care based on the therapist’s clinical reasoning and interpretation of data.

This article explores an integral part of the non-clinical side of occupational therapy: occupational therapy medical billing and coding.

Occupational Therapy Medical Billing & Coding Guide for 2021

Occupational Therapy Medical Billing & Coding Guide for 2021

Staying up to date on all the latest changes in occupational therapy medical billing and coding is essential for the success of any practice.

Here we present a 101-guide to occupational therapy medical billing/coding.

Certain current procedural terminology (CPT) codes are set by the American Medical Association to designate services provided by occupational therapists. All occupational therapists must have a thorough understanding of the procedure codes needed to run their practice efficiently and bill properly for the services they provide.

We hope that this guide will answer any questions you may have about occupational medical billing and coding wand help your practice avoid claim denials and maximize profits.

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Table of Contents

What Is Included in an Occupational Therapy Evaluation?

A typical occupational therapy evaluation includes the following components:

  • Occupational profile: an individualized evaluation of a patient’s occupational history and experiences, as well as patterns of daily living, interests, values, and needs. This is done between the client/family and the occupational therapist.
  • Patient history: the medical and therapy history of the patient.
  • Clinical decision making: a customized intervention to improve the patient’s ability to perform daily activities and reach certain goals.
  • Development of a plan of care: an outcome evaluation to ensure that goals are being met and/or to modify the intervention plan based on new data.

CPT Codes for Occupational Therapy Evaluation

There are currently three different occupational therapy medical billing codes utilized for the evaluation of a new patient. The differences between them lie in the complexity of the evaluation performed by the occupation therapist.

At a minimum, each component listed below must be documented in the medical record in order to report the level of occupational therapy rendered. The documentation must reflect the therapist’s attention to each component in the context of the whole evaluation. The documentation must show that the occupational therapist addressed all of the patient’s needs (chief compliant/presenting problems) during the encounter.

To move to a higher level of evaluation, all three components must be of that higher level.

If necessary, there is one additional code for the reevaluation of an occupational therapy plan of care.

CPT Code

Description

97165

An occupational therapy evaluation of low complexity requires these components:

  • An occupational profile and medical and therapy history, which includes a brief history comprising a review of medical and/or therapy records relating to the presenting problem.
  • An assessment that identifies 1–3 performance deficits [i.e., relating to physical, cognitive, or psychosocial skills] that cause activity limitations or participation restrictions.
  • Clinical decision making of low complexity, which comprises an analysis of the occupational profile, an analysis of data from problem-focused assessments, and a consideration of limited treatment options. The patient must present with no comorbidities that affect occupational performance. Modification of tasks or of assistance [e.g., physical, verbal] with assessment[s] is not required for completion of this evaluation component.

Approximately 30 minutes are spent face to face with the patient and/or their family.

97166

An occupational therapy evaluation of moderate complexity involves these components:

  • An occupational profile and medical/therapy history that includes an expanded review of medical or therapy records alongside an additional review of physical, cognitive, or psychosocial history relating to current functional performance.
  • An assessment that identifies 3–5 performance deficits [relating to physical, cognitive, or psychosocial skills] that cause activity limitations and/or participation restrictions.
  • Clinical decision making of moderate analytical complexity, which may include an analysis of the occupational profile, an analysis of data from detailed assessments, and a consideration of several treatment options. The patient may present with comorbidities affecting occupational performance. Minimal or moderate modification of tasks or assistance [e.g., physical or verbal] with assessments is needed to allow the patient to complete evaluation component.

Approximately 45 minutes are spent face to face with the patient and/or their family.

97167

An occupational therapy evaluation of high complexity requires these components:

  • An occupational profile and medical/therapy history, including a review of medical and therapy records as well as an extensive review of physical, cognitive, or psychosocial history relating to current functional performance.
  • An assessment that identifies 5 or more performance deficits [i.e., relating to physical, cognitive, or psychosocial skills] that cause activity limitations and/or participation restrictions.
  • Clinical decision making of high analytical complexity. This may include an analysis of the patient profile, an analysis of data derived from thorough assessments, and a consideration of multiple possible treatment options. Patient presents with comorbidities that may affect occupational performance. A significant modification of tasks or assistance [e.g., physical or verbal] is needed to allow patient to complete the evaluation component.

Approximately 60 minutes are spent face to face with the patient and/or their family.

97168

A reevaluation of occupational therapy established plan of care requires the following components:

  • An assessment of changes in patient functional and/or medical status with a revised plan of care.
  • Updating the initial occupational profile to reflect changes in condition or environment that affect future interventions and/or goals.
  • A revised plan of care. A formal reevaluation is performed if and when (1) there is a documented change in functional status or (2) a substantial change to the plan of care is needed.

Approximately 30 minutes are spent face to face with the patient and/or the family.

NOTE: The AOTA defines a reevaluation as the “reappraisal of the patient’s performance and goals to determine the type and amount of change that has taken place.”

Sources: AOTA; AOTA New Occupational Therapy Evaluation Coding Overview.

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Most Common CPT codes for Therapeutic and Modalities Procedures

The following list contains the most commonly used therapeutic procedures codes and modalities procedure codes that would be rendered by an occupational therapist.

This is not a comprehensive list of all possible CPT codes in occupational therapy medical billing. Rather, it is a detailed description of specific services that are commonly performed. Please note the importance of time in certain codes.

Therapeutic Procedures Codes

CPT Code

Description

97110

Therapeutic procedure, one or more areas, each 15 minutes; therapeutic exercises to develop strength and endurance, range of motion and flexibility

97112

Neuromuscular reeducation of movement, balance, coordination, kinesthetic  

Sense, posture, and/or proprioception for sitting and/or standing activities

97124

Massage, including effleurage, petrissage and/or tapotement (stroking, compression, percussion)

97129

Therapeutic interventions that focus on cognitive function (e.g., attention, memory, reasoning, executive function, problem solving, and/or pragmatic functioning) and compensatory strategies to manage the performance of an activity (e.g., managing time or schedules, initiating, organizing, and sequencing tasks), direct (one-on-one) patient contact; initial 15 minutes

A patient with learning disabilities or an individual who has lost cognitive skills as a result of illness or brain injury is treated on a one-on-one basis by the physician or other qualified health care provider to assist in the development of cognitive skills.

97130

Each additional 15 minutes (List separately in addition to code for primary procedure)

97150

Therapeutic procedures, group (2 or more individuals)

97533

Therapeutic activities, direct (one-on-one) patient contact (use of dynamic activities to improve functional performance), 15 minutes each

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Modalities Procedure Codes

modality is an application of electrical, thermal, or mechanical energy in order to induce physiological changes in patients. Modalities are often used to alleviate pain, improve circulation, reduce swelling, reduce muscle spasm, and deliver medications in conjunction with other procedures.

CPT Code

Description

97010

Application of hot/cold packs to one or more areas

97014

Application of electrical stimulation to one or more areas, unattended by therapist

97024

Application of heat therapy to 1 or more areas

97033

Application of medication through skin using electrical current, 15 minutes each

97016

Application of a modality to one or more areas; vasopneumatic devices

97018

Paraffin bath

97022

Whirlpool

97032

Application of modality to one or more areas; electrical stimulation (manual), 15 minutes each

97033

Iontophoresis, 15 minutes each

97034

Contrast baths, 15 minutes each

97035

Ultrasound, 15 minutes each

Man in wheelchair talking with psychotherapist

Designation of Time

Some occupational therapy medical billing CPT codes are “time-based” codes. Others are “untimed” codes.

All procedures designated by time-based CPT codes are required to follow the Medicare CMS “8-Minute Rule.” The Centers for Medicare & Medicaid Services, or CMS, has released the following statement regarding billing units:

When only one service is provided in a day, providers should not bill for services performed for less than 8 minutes. For any single timed CPT code in the same day measured in 15-minute units, providers bill a single 15-minute unit for treatment greater than or equal to 8 minutes through and including 22 minutes. If the duration of a single modality or procedure in a day is greater than or equal to 23 minutes through and including 37 minutes, then 2 units should be billed.

Source: CMS Manual System.

The following chart outlines the time units to be reported based on the times specified in the medical documentation. For all CPT codes designated as 15 minutes, multiple coding represents the minimum face-to-face treatment for the specific CPT code reported:

1 unit

 8 minutes to < 23 minutes

2 units

23 minutes to < 38 minutes

3 units

38 minutes to < 53 minutes

4 units

53 minutes to < 68 minutes

5 units

68 minutes to < 83 minutes

6 units

83 minutes to < 98 minutes

For example, suppose an occupational therapist states that a therapeutic exercise was performed on three different areas to develop strength and endurance for 38 minutes. The therapist would report three units for the procedure.

Healthcare professionals should code based on the time units that equate to the appropriate time. The key to occupational therapy medical billing is to understand whether it is a time-based CPT code or an untimed CPT code.

Finally, if there is no time designated in the official descriptor, the code represents a typical session and should only be reported as one unit.

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Multiple Procedures with Designation of Time

When an occupational therapist performs multiple procedures during the same encounter, the units to be reported are based on the sum total time of all the procedures.

Suppose, during one session, a provider performed 39 minutes of therapeutic exercise (normally 3 units) and 23 minutes of massage exercise (normally 2 units).

In this case, it would be incorrect to bill 3 units of therapeutic exercise and 2 units of massage exercise for this session. This is due to the following CMS rule:

If more than one 15-minute timed CPT code is billed during a single calendar day, then the total number of timed units that can be billed is constrained by the total treatment minutes for that day.

Since the total time of all procedures is 39 + 23 = 62 minutes, and 62 minutes is reported as 4 units, the total billed units for the session cannot exceed 4.

The procedure performed for the longest amount of time should have the higher number of units. In this example, the provider reduces the units of the shorter procedure (massage exercise) from 2 to 1. This allows the total billable units to not exceed 4.

Hence, the correct way to bill these two procedures is 3 units of the therapeutic exercise and 1 unit of massage exercise.

Mature clinician in uniform helping young man in pain to sit in wheelchair

Occupational Therapy Documentation

There are four components that must be present in each medical record. This format, sometimes known as SOAP, is the standard occupational therapy documentation format.

Subjective

This documentation provides a detailed story about the patient, as well as a brief history including review of medical and/or therapy records relating to the presenting problem. All information is derived solely from the patient.

Objective

A performance deficit assessment is conducted to pinpoint areas where the patient is unable to finish an activity due to a lack of skill in one of three categories: physical, cognitive, or psychosocial.

An assessment of physical skills seeks to determine whether the patient is impaired in their balance, mobility, strength, endurance, fine or gross motor coordination, sensation, or dexterity.

Deficits noted in the area of cognitive skills refers to the patient’s difficulty to attend, perceive, think, comprehend, problem solve, mentally sequence, and learn or recall information. Documentation may include:

  • Range of motion measurements
  • Level of independence
  • Functional reporting measures
  • Psychosocial skills, Cognitive skills

Assessment

The assessment details the provider’s reasoning and analysis for the entire encounter. It should include a summary of the clinical reasons affecting patient occupational function as well as all information gathered from the subjective and objective sessions.

Some topics to cover include:

  • Which therapy options to continue and to terminate.
  • Future treatments for the patient.

Plan

This is a plan of care for the patient. It comprises short term goals, long terms goals, recommendation(s), and procedure(s) performed or to be performed.

Occupational Therapy Medical Billing and Coding Modifiers

Modifiers indicate that a performed service or procedure has been altered by some particular circumstance but not changed in its definition or occupational therapy medical billing code.

To receive proper payments for services rendered, the following modifiers are used when reporting occupational therapy procedures:

  • Modifier GO: services delivered under an outpatient occupational therapy plan of care. Medicare administrative contractors will return or reject claims containing an “always therapy” procedure code and do not also contain the correct discipline-specific therapy modifier.
  • Modifier GP: services that are delivered under an outpatient physical therapy plan of care.
  • Modifier KX: used to verify that services are medically necessary as justified by the appropriate documentation in the medical record once the threshold amount has been attained. Important! If a claim is submitted with KX modifier and the cap is exceeded, those services will be denied.
  • Modifier CO: specifies that services rendered were performed by an occupational therapy assistant under a therapy plan of care.
  • Modifier CQ: specifies that services rendered were performed by a physical therapy assistant under a therapy plan of care.
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Most Common Reasons for Occupational Therapy Claim Denials

Incorrect Modifiers

Modifiers must be entered correctly on all claims. If they are not, the insurance companies will deny the service. Practice managers must ensure that the patient did not hit their cap for services provided.

Audits for Overuse

Providers must make sure to have everything documented for each procedure performed. Some insurance companies will request medical records to review procedures performed during the encounter.

Moreover, insurance companies may examine the overuse of one procedure relative to another to make sure that medical necessity is being met.

Time-Based Codes

It is vital for the occupational therapy practice to understand the CMS time-based rule. This is especially true when multiple time-based procedures are performed.

The medical record should keep track of time for each performed procedure and providers must carefully calculate the correct number of units.

Medicare Caps and Payments

Medicare has a usage cap with therapy services. As such, documentation must show that the beneficiary qualifies of the therapy services justify a cap exception. Documentation must further show that services are reasonable, necessary, and require the skills of a therapist.

In all cases, failure to follow proper protocols can cause significant loss in revenue for an occupational therapy practice. Be sure to read all occupational therapy medical billing and coding guidelines closely when submitting claims for reimbursement.

Boy exercising with therapist

Conclusion

This article has covered the essentials of occupational therapy billing and coding.

Proper billing and coding are essential of every occupational therapy practice. Our aim has been to provide helpful insights on properly using occupational therapy CPT codes while also inspiring providers to learn more and explore the topic in more depth.

Would you like some assistance with your medical billing? Neolytix offers a full selection of medical billing services. We’re happy to help with all your occupational therapy medical billing and coding needs.

We’ll ensure that your providers always receive the payment they deserve.

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