For outpatient, pediatric, hand therapy and multidisciplinary rehab practices that bill Medicare, Medicaid and commercial plans.
Occupational therapy revenue leaks in small amounts that repeat on every visit: a timed unit lost to the 8-minute rule, a Medicare claim past the $2,480 KX threshold sent without the modifier, a plan of care nobody certified. In our claim audit, the KX modifier was missing on 21% of Medicare therapy claims past the threshold. Our full-service medical billing team applies those rules inside your therapy EHR, so the fix happens before the claim goes out.
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Occupational therapy billing services handle eligibility, evaluation and timed-unit coding, GO, CO and KX modifiers, claim submission, denials and AR follow-up for OT practices. Minutes drive the money: in a Luxen claim audit, 8-minute rule unit errors appeared on 9% of therapy claims, across 4,300 claims.
Billing for occupational therapy changes with the setting, the payer mix and who delivered the minutes.
Service lines we bill: evaluations and re-evaluations, timed treatment, group therapy, cognitive interventions, orthotic training, telehealth and remote therapeutic monitoring.
Most OT revenue loss comes from rules that apply to every visit, so a small error rate compounds across a year of claims. Medicare dollar figures use 2026 national RVUs at the $33.4009 conversion factor, before geographic adjustment and patient cost sharing.
| Scenario | Codes | What goes wrong | $ at stake per claim | Luxen audit finding |
|---|---|---|---|---|
| Two or more timed codes in one visit | 97110, 97530, 97535 | Units counted code by code instead of from total timed minutes | $35.07 per lost unit of 97530 | 8-minute rule unit errors appeared on 9% of therapy claims |
| Medicare visit after OT spending passes $2,480 | GO, KX | Line denies without KX even when the care is medically necessary | $109.05 for a 4-unit visit after MPPR | The KX modifier was missing on 21% of Medicare therapy claims past the threshold |
| Plan of care not certified in time | 97165 to 97167 and every visit under the plan | Services under an uncertified plan are exposed on review | $100.54 per evaluation, plus each visit | Plan of care certification was unsigned past 30 days on 7% of Medicare episodes |
| Coverage changes during the episode | All OT codes | Visits keep billing to a plan that ended or changed | $109.05 per 4-unit visit | 33% of therapy episodes had a coverage change mid-episode that was not caught |
| Commercial remit below contract | 97530, 97535, 97112 | Underpayment posted as paid in full | $38 average shortfall | The average underpaid claim was short by $38 |
OT claims draw from a short list of CPT codes, but each carries its own time rules, edits and payment weight. Amounts below are computed from CMS 2026 national RVU data at the $33.4009 conversion factor, non-facility, before geographic adjustment. Certified coders on our medical coding team check each code against the note before the claim leaves.
Evaluations are untimed. An occupational therapist may report only one evaluation or re-evaluation per date of service, and re-evaluations are not reported routinely during a planned course of care.
| Code | Service | Typical face-to-face time | 2026 national amount |
|---|---|---|---|
| 97165 | OT evaluation, low complexity | 30 minutes | $100.54 |
| 97166 | OT evaluation, moderate complexity | 45 minutes | $100.54 |
| 97167 | OT evaluation, high complexity | 60 minutes | $100.54 |
| 97168 | Re-evaluation of established plan of care | 30 minutes | $68.47 |
All three evaluation levels pay the same Medicare amount in 2026, so complexity selection is a documentation and audit question more than a payment one.
| Code | Service | Unit | 2026 national amount |
|---|---|---|---|
| 97110 | Therapeutic exercise | Each 15 minutes | $29.06 |
| 97112 | Neuromuscular re-education | Each 15 minutes | $32.73 |
| 97140 | Manual therapy | Each 15 minutes | $27.72 |
| 97530 | Therapeutic activities | Each 15 minutes | $35.07 |
| 97535 | Self-care and home management training | Each 15 minutes | $32.40 |
| 97533 | Sensory integrative techniques | Each 15 minutes | $60.79 |
| 97129 | Cognitive function intervention | Initial 15 minutes | $22.38 |
| 97130 | Cognitive function intervention, add-on | Each additional 15 minutes | $21.04 |
| 97760 | Orthotic management and training, initial encounter | Each 15 minutes | $46.09 |
| 97763 | Orthotic or prosthetic management, subsequent encounter | Each 15 minutes | $50.10 |
| 97150 | Group therapy, 2 or more patients | Untimed, 1 unit per patient | $18.04 |
Medicare does not count minutes code by code. It adds all direct treatment minutes for 15-minute timed codes on the date of service and converts the total to units (Medicare Claims Processing Manual, Chapter 5, section 20.2).
| Total timed minutes | Units billed |
|---|---|
| 8 to 22 | 1 |
| 23 to 37 | 2 |
| 38 to 52 | 3 |
| 53 to 67 | 4 |
| 68 to 82 | 5 |
When only one timed service is provided in a day and it lasts under 8 minutes, it is not billed. Untimed codes such as evaluations and group therapy (97150) bill as one unit regardless of minutes.
An OT spends 38 minutes on therapeutic activities (97530) and 15 minutes on self-care training (97535). Total timed minutes are 53, so the visit bills 4 units. Two full units go to 97530 and one to 97535. The fourth unit goes to 97530, because leftover minutes are assigned to the service with the most remaining time (8 minutes against 0).
Medicare pays full practice expense on the unit with the highest practice expense that day and 50% of practice expense on every other unit and procedure. For the visit above:
| Line | Units | Without MPPR | With MPPR |
|---|---|---|---|
| 97530, first unit | 1 | $35.07 | $35.07 |
| 97530, later units | 2 | $70.14 | $50.10 |
| 97535 | 1 | $32.40 | $23.88 |
| Total | 4 | $137.61 | $109.05 |
On a visit like this, a remit about 21% below the unreduced amount is expected, not an underpayment.
Commercial and Medicaid rules vary. UnitedHealthcare's commercial physical medicine policy follows the 8-minute minimum but pays a maximum of four timed codes per date of service. For practices billing in North Dakota, the Medicaid OT manual counts a unit once the mid-point is passed and allows one evaluation per calendar year. We load each payer's rule into the claim check instead of applying Medicare math everywhere.
Medicare pays for outpatient OT only when the paperwork behind the visit holds up. These rules decide whether a paid claim stays paid.
A progress report is due at least once every 10 treatment days. A re-evaluation (97168) belongs where the patient's status has changed, not on a calendar.
For 2026 the KX modifier threshold is $2,480 for OT, tracked separately from the $2,480 threshold for PT and speech combined. After that point, medically necessary claims need KX. Medicare keeps a targeted medical review process at $3,000, the amount the Bipartisan Budget Act of 2018 set for years before 2028. Maintenance therapy stays covered when skilled care is needed, whether or not the patient is expected to improve (Jimmo settlement).
Services furnished in whole or part by an occupational therapy assistant carry the CO modifier and pay at 85% of the fee schedule, unless the OTA portion is 10% or less of the service. Since January 1, 2025, OTAs working for an OT in private practice need general, not direct, supervision (42 CFR 410.59). New OTs need Medicare and commercial enrollment before their first billed visit, and our provider credentialing team files the CMS-855I and payer applications.
The hard therapy cap was replaced by the KX modifier threshold. For 2026, OT claims past $2,480 still pay when the care is medically necessary and the line carries KX (CMS Therapy Services). Stopping care at the old cap loses visits; skipping KX loses the claim, $109.05 on a 4-unit visit. The KX modifier was missing on 21% of Medicare therapy claims past the threshold.
Medicare counts total timed minutes for the day. Seven minutes of 97110 plus seven minutes of 97530 is 14 minutes, which bills one unit (CMS Transmittal 2121). Skipping it forfeits $29.06 to $35.07 each time, and 8-minute rule unit errors appeared on 9% of therapy claims.
The signature exception applies only when a written order or referral is on file and the plan reached the physician or NPP within 30 days of the evaluation. Otherwise certification is required, with recertification at least every 90 days (42 CFR 424.24). Every visit under an uncertified plan is at risk on review. Plan of care certification was unsigned past 30 days on 7% of Medicare episodes.
NCCI allows 59 or XU on timed therapy pairs only when the procedures were performed in different timed intervals, and two one-on-one services cannot be reported for the same 15 minutes (NCCI Policy Manual, Chapter XI). Misuse invites denials and recoupment. Coding and modifier errors caused 21% of denials in our audit.
OTs can furnish Medicare telehealth through December 31, 2027, and home visits billed with place of service 10 are paid at the non-facility rate (CMS Telehealth FAQ). Practices that stopped offering virtual visits gave up billable sessions, and modifier setup still needs care: audio-only visits were billed with video modifiers on 6% of telehealth claims.
When these errors have already produced denials, our denials and AR recovery team works the backlog oldest money first. Appeals filed by Luxen were overturned 68% of the time.
We run the revenue cycle from eligibility to zero balance inside the practice management system you already use. How full-service billing works.
Certified coders review charges against your documentation and payer rules before the claim goes out, so the denial is prevented rather than appealed. Medical coding.
Aged and denied claims are worked to resolution, then the upstream cause is fixed so the same claims stop coming back. Denials and AR recovery.
Benefits are verified and authorizations secured before the appointment, which is the cheapest place in the cycle to stop a denial. Eligibility and prior authorization.
Statements, balance questions and payment plans are handled by the same team that worked the claim. Patient billing.
Payer enrollment and re-credentialing are tracked through to approval, so a lapsed credential never quietly stops payment. Credentialing.
A HIPAA-trained front-office assistant working inside your EHR on calls, scheduling, intake and referrals, alongside the billing team. Medical virtual assistant.
OT practices run on therapy EHRs where minutes, units and plans of care live in the same note. We work inside the system you already use: WebPT, Raintree, Net Health Therapy, Prompt, TheraOffice, ClinicSource, SimplePractice and Jane for outpatient and pediatric clinics; Epic and Oracle Health for hospital outpatient departments; PointClickCare and MatrixCare where therapy runs inside skilled nursing. Claims go out through your existing clearinghouse. There is no migration. We sign a BAA, get user access, and check GO, CO and KX logic, unit calculations and plan of care dates in your system before the first claim.
2 weeks
from a signed BAA to our team working your claims
About 3 weeks
to the first recovered payments on aged AR
20+ years
combined billing and coding experience
Documented treatment minutes did not always match the units on our occupational therapy claims. Luxen added a note-to-claim validation step, reduced unit errors from 11.2% to 2.5%, and recovered $26,800.
Clinical Director, pediatric occupational therapy practice
Expired plans of care and visit authorizations were discovered only after claims denied. Luxen built a forward-looking tracker that reduced therapy charges held for missing approvals from $74,000 to $12,000.
Operations Manager, multi-location rehabilitation group
Full engagements are written up in our dental practice case study and our ambulance billing case study.
The 2026 physician fee schedule conversion factor is $33.4009 for clinicians not in a qualifying APM, a projected 3.26% increase. The 2.5% efficiency adjustment in the same rule applies only to non-time-based services, so timed therapy codes such as 97110 and 97530 kept their 2025 work RVUs.
Section 6209 of the Consolidated Appropriations Act, 2026 extended Medicare telehealth for OTs through December 31, 2027. Under current law, starting January 1, 2028, OTs can no longer furnish Medicare telehealth services. Telehealth visits to patients at home use place of service 10 and are paid at the non-facility rate.
OTs bill remote therapeutic monitoring under an OT plan of care with the GO modifier. New for 2026, 98985 covers musculoskeletal device supply for 2 to 15 days in a 30-day period, and 98979 covers the first 10 minutes of treatment management with at least one real-time interactive communication in the month. 98976 and 98977 now cover 16 to 30 days. CO applies when an OTA furnishes 98975, 98979, 98980 or 98981 in whole or part.
For practices billing in Indiana, state law from July 1, 2025 bars prior authorization for the first 12 physical therapy or chiropractic visits of a new episode. The statute does not name occupational therapy and excludes Medicaid and the state employee plan, so OT visits there still follow each plan's authorization rules. Our eligibility and prior authorization team checks those rules before the first visit.
3% to 6% of collections
Luxen's pricing generally falls between 3% and 6% of collections, depending on claim volume, specialty, payer mix, and how much of the revenue cycle your practice hands over.
Higher-volume practices usually land toward the lower end. Smaller or more complex practices land higher because there is more work per account. There is no setup fee and no exit fee, and the agreement runs month to month with 30 days notice.
A lower fee attached to weak billing is still expensive. The number that matters is what your collections do after you hire someone.
Luxen charges 3% to 6% of collections, month to month with 30 days notice and no setup or exit fee. The rate depends on claim volume, payer mix and whether pediatric Medicaid authorizations or aged AR are in scope.
The practice collects $900,000 a year, about $75,000 a month. At 3% the fee is $2,250 a month, or $27,000 a year. At 6% it is $4,500 a month, or $54,000 a year. In our billing reviews, fully loaded in-house billing cost 7.9% of collections for practices under $2M, which is $71,100 a year for this practice.
| Cost line | In-house billing | Luxen at 3% | Luxen at 6% |
|---|---|---|---|
| Annual cost | $71,100 | $27,000 | $54,000 |
| Monthly cost | $5,925 | $2,250 | $4,500 |
| Payer rule updates and coder training | Practice pays | Included | Included |
| Coverage when a biller leaves | Gap until the role is filled | Included | Included |
| Annual difference against in-house | None | $44,100 lower | $17,100 lower |
Turnover is the hidden cost. Open biller roles took a median 67 days to fill, and unit and KX errors build up while the seat is empty.
Get the last answer in writing. Among practice managers we surveyed, 44% could not name the fee basis in their current billing contract, and 52% of practices that switched billing vendors cited missing denial reporting as the main reason (Luxen Practice Manager Survey 2026).
| Partner type | OT unit and modifier rules | Works in your EHR | Pricing | Denial reporting |
|---|---|---|---|---|
| In-house biller | Depends on one person's training | Yes | Salary, benefits and software | Whatever you build |
| Generalist billing company | Varies; therapy may not be a focus | Varies | Percent of collections or per claim | Varies |
| Therapy specialty billing company | Usually a focus | Varies | Percent of collections or per claim | Varies |
| EHR vendor RCM | Tied to that EHR's rules engine | Only that EHR | Often bundled with software | Varies |
| Luxen | Payer-specific unit, GO, CO and KX checks | Yes, no migration | 3% to 6% of collections, month to month | By denial reason, monthly |
To weigh other options side by side, compare medical billing companies in your state.
A 30-minute look at your AR ageing, denial reasons and payer mix. You leave knowing what is recoverable, what we would work first and what it would cost.
We sign a business associate agreement before anyone touches your system. Your named team then works inside the practice management system and clearinghouse you already use. Nothing is migrated, and claims are being worked within two weeks of the signed BAA.
Aged and denied claims come first because that is revenue you have already earned. Most practices see the first recovered payments inside three weeks.
Once the backlog is moving, we take over the agreed part of the daily cycle: eligibility, coding review, submission, posting, denials and patient balances.
You know who owns your claims. The team works inside the practice management system and EHR you already run, with no migration.
Claims are coded by certified coders against your documentation and payer rules. Automation handles the repetitive checks so people spend their time on the claims that need judgment.
We sign a business associate agreement before accessing protected health information, and access is limited to the named people on your account.
We look at your AR ageing, volume, payer mix and denial profile first, then tell you what we believe is recoverable and what it would cost.
A billing company is a poor fit if you are not willing to share visibility into your billing, if the vendor uses a rotating pool of people who never learn your practice, or if it cannot explain why your claims are being denied. Be wary of anyone promising large collection increases before they have seen your AR ageing. The right partner makes your revenue cycle more visible, not less.
The 8-minute rule is Medicare's method for converting timed minutes into 15-minute units. Medicare adds all direct minutes for timed codes on the date of service, so 8 to 22 minutes bills 1 unit, 23 to 37 bills 2 and 38 to 52 bills 3 (Claims Processing Manual, Chapter 5, section 20.2). A single timed service under 8 minutes is not billed, and some commercial and Medicaid plans count units differently.
Luxen charges 3% to 6% of collections, month to month, with no setup fee. For an OT practice collecting $900,000 a year, that is $27,000 to $54,000 a year. In our billing reviews, in-house billing cost 7.9% of collections for practices under $2M, about $71,100 for the same practice.
About 2 weeks from a signed BAA to working claims, with first recovered payments in about 3 weeks. Across our clients, the median time from signed BAA to first claims worked was 9 business days. We start with the oldest recoverable claims so Medicare's 12-month timely filing limit does not run out on them.
No. We work inside WebPT, Raintree, Net Health, Prompt, SimplePractice, Jane and other therapy systems, and hospital systems such as Epic. Staying put matters: among practice managers who changed EHR or practice management systems, 71% said collections dipped for at least six months after the switch (Luxen Practice Manager Survey 2026).
It depends on the plan. Aetna's clinical policy bulletin 0256 considers sensory integration therapy experimental, investigational, or unproven, so a 97533 claim can deny even with strong notes. For Medicaid patients under 21, EPSDT requires states to cover medically necessary services whether or not the state plan lists them. Check the plan's policy and authorization rules before the first session.
Thirty minutes, no deck and no fee. We look at what is sitting past 90 days and where your denials cluster, and you leave knowing what is recoverable, what we would work first, and what it would cost.
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