A complete guide to occupational therapy billing

While billing can be intimidating if you’re new to it, there’s no reason to fear handling your own billing. Being your own biller gives you complete flexibility and allows you to control the entire client-practice relationship. You can also ensure compliance more easily since you’re aware of everything that’s being done. 

This guide explores the essentials you need to know about occupational therapy billing practices. We’ll cover the most common billing errors and how to avoid them. We’ll then take a deep dive into occupational therapy evaluation CPT codes and the criteria required to bill for each. We’ll wrap things up with a look at best practice tips for selecting the right ICD-10 codes.

Common OT billing mistakes

Errors with occupational therapy billing can be costly. When claims are rejected, payment for services is delayed, robbing your practice of the operating capital it needs to thrive. Mistakes with coding can also result in incorrect information being added to a client’s billing record, being paid less compensation than you’re owed, or being flagged for an audit by an insurer. Here are some of the most frequently-made billing mistakes and how to steer clear of them.

General errors and how to avoid them

Mistakes in this category are usually a result of carelessness, and they’re easy to avoid. 

Clerical mistakes

Misspelling a client’s name, entering an incorrect date of birth, or transposing a number or letter in the patient’s policy ID number are all examples of clerical errors. These honest mistakes are a hassle to correct and often result in payment delays. Slowing down enough to fill out and submit a billing claims form correctly the first time is always a time-saver.

Double billing

Submitting the same claim twice all but guarantees a claim will be rejected. Delineate billing responsibilities in your office, so there’s no confusion about who’s submitting claims for reimbursement.

Missing documentation

If you don’t include adequate information, you may be asked to resubmit the claim. Including all the information required on the initial claims form will reduce rejections and denials.

Coding errors and how to avoid them

Coding mistakes are more difficult to prevent since they’re usually a result of not understanding the OT CPT codes. But you can use best practices to avoid them.

Upcoding

As the name implies, upcoding involves using a billing code that exceeds the patient’s current diagnosis or the level of treatment you provided. At times, upcoding can be the result of misunderstanding the criteria for billing that code. Reading the CPT code description found in the CPT Code Manual can increase the accuracy of your coding. Upcoding is illegal, so getting this right is essential. 

Undercoding

The opposite of upcoding, undercoding is reporting a diagnosis or procedure that’s less intensive than reality dictates. Undercoding can result from an honest mistake or an attempt to save a patient some money or avoid an audit. Undercoding is not ethical, so be sure you’re accurately billing at the patient’s actual level of need.

Overusing codes

When it comes to billing, there’s no lack of CPT codes to choose from. It can be tempting to use the same codes over and over again for convenience. But this practice may invite an audit from an insurer and doesn’t provide an accurate reflection of the services you’re delivering. 

Not including telehealth modifiers

Providing telehealth services often requires the use of a modifier. Medicare and private payers typically want therapists to include the 95 modifier to indicate a service was provided via telehealth.

See common mistakes in occupational therapists make when billing for more mistakes and how to avoid them. 

OT evaluation CPT codes

Occupational therapy evaluation codes are broken into three tiers based on the level of complexity. Each one has a corresponding CPT code. An occupational therapy reevaluation has a single CPT code. Below is a brief snapshot of what an evaluation at each level would typically involve. 

Low Complexity Evaluation (OT 97165)

• This evaluation requires only a brief review of the patient’s medical and/or therapy records related to the current presenting problem.
• The patient has no comorbidities impacting the presenting problem. 
• The therapist identifies up to three deficits in functional performance that result in a patient’s activities being limited or participation restricted using problem-driven standardized assessments.
• No modifications or assistance from the therapist are required to complete the assessments. 
• Deficits in performance may be physical, cognitive, or psychosocial. 
• Analysis of the patient’s occupational profile and data from assessments is used to formulate a small number of treatment options. 
• The evaluation requires a low degree of analytical skills to complete. 

Medium Complexity Evaluation (OT 97166)

• This evaluation requires an in-depth review of the patient’s medical and/or therapy records, including a secondary review of the patient’s relevant physical, cognitive, and psychosocial history. 
• The patient may have comorbidities that impact their current level of occupational performance. 
• The therapist identifies three to five deficits in the areas of physical, cognitive, or psychosocial ability using problem-driven standardized assessments. 
• Minor to moderate modifications or assistance from the therapist may be required to complete the assessments. 
• Deficits in performance may be physical, cognitive, or psychosocial. 
• Analysis of the patient’s occupational profile and data from assessments is used to formulate an expanded range of treatment options. 
• The evaluation requires a moderate degree of analytical skills to complete.

High Complexity Evaluation (OT 97167)

• This evaluation requires an intensive review of the patient’s medical and/or therapy records, including a thorough examination of the patient’s relevant physical, cognitive, and psychosocial history. 
• The patient has comorbidities that are impacting occupational performance. 
• The therapist identifies five or more physical, cognitive, or psychosocial performance deficits using problem-driven standardized assessments. 
• A significant level of modifications or assistance from the therapist is required to complete the assessments. 
• Deficits in performance may be physical, cognitive, or psychosocial. 
• Analysis of extensive data from various sources, including the patient’s occupational profile and assessments, is used to develop several treatment options.
• The evaluation requires a  high degree of analytical skills to complete. 

Reevaluation (OT 97168)

The occupational therapy reevaluation is not a leveled system with multiple CPT codes to choose from. Instead, it relies on a single code. Most often, you’ll conduct a reevaluation when there’s been a marked change in a patient’s present level of functioning or they’re not responding to the current therapeutic interventions. A significant, new clinical finding may also trigger a reevaluation. 

For a full explanation of OT evaluation codes and how to choose the appropriate one, read evaluation codes for occupational therapy billing.

The 97110 CPT Code

The 97110 CPT code is one of the most frequently-used therapeutic procedure codes for occupational therapy. Knowing when to use this code, the documentation you’ll need to back it up, and when to use the 97530 CPT code instead will save you from potential billing headaches down the road.

When to use 97110

The 97110 CPT code describes foundational therapeutic exercises designed to improve a patient’s range of motion, strength, flexibility, or physical endurance. The goal of the exercises must be to restore the ability to perform an activity of daily life or other functional activity. Exercises that fit the 97110 CPT code typically target only one deficit area. Examples include using TheraPutty to increase finger strength or a treadmill to increase endurance when walking short distances.

Required documentation for 97110

When keeping records of your sessions with patients, focus on clearly identifying the deficit area your exercises are targeting. Connect how a lack of strength or flexibility in a specific area of the body affects their ability to function in daily life. Specify the region of the body you’re working on and how the exercises you’ve prescribed are specifically designed to remediate the deficit area and restore the loss in bodily functioning. Start with an objective measure of the client’s current level of function and update it with periodic measurements that show consistent improvement over time.

When to use 97530 CPT code instead

The 97530 CPT code is a very similar billing code, but it has some important distinctions. In some cases, this code may be a more accurate descriptor of your actual work with your patient. If your work with the patient focuses on activities designed to remediate multiple deficit areas rather than simply exercises that address a single deficit area, you’ll want to consider using the 97530 CPT code instead.

Read How and when to use the 97110 CPT code to learn more about the difference in codes 97110 and 97530.

What to know about ICD-10 coding

ICD-10 is a diagnostic tool developed by the World Health Organization. ICD-10 codes are used in the United States by medical and therapy professionals to document medical and treatment diagnosis. These codes must be included in insurance claim submissions along with related CPT codes.

Please note that the WHO has replaced the ICD-10 with the ICD-11 in 2022. The US healthcare system continues to primarily use ICD-10 codes as of publication.

Common ICD-10 coding mistakes

ICD-10 codes are highly specific, making it easier for therapists to select codes that describe the patient’s current impairment in greater detail. But many of these codes are quite similar, increasing your chances of incorrectly coding a diagnosis. Here are a few of the most common ICD-10 coding mistakes and how to avoid them.

1. Confusing similar letters and numbers 

Each ICD-10 code is three to seven characters in length and is made up of alphanumeric characters. This structure makes it easy to make careless mistakes like placing an O where a zero should be or using a 1 instead of an I. Do a double-take on your ICD-10 codes to catch any obvious errors. 

2. Omitting laterality and specificity

Payers require identifying laterality and coding to the highest specificity. It may be tempting to use a more generic code, but taking the time to find the one that best describes your diagnosis will reduce rejections and denials. 

3. Using an incorrect code

Become familiar with the ICD-10 codes used most often with occupational therapy patients. Knowing the codes can help ensure you’re choosing the one that offers the most accurate portrayal of the patient’s presenting problem.

4. Incomplete documentation

ICD-10 codes require documentation to back them up. Keeping detailed notes of your therapy sessions, recording data from objective assessments of a patient’s current functioning levels, and including specific details like site-specificity can help you justify your choice of a diagnosis code if it’s ever challenged. 

Tips for choosing the best OT ICD-10 code

While it can sometimes be challenging to know which code is the best one for a patient, these three tips should help you. 

Support your coding choice with documentation

The notes that you keep from your sessions should support your ICD-10 coding choice. Objective measures of the patient’s impairment and short and long term goals from their plan of care should directly support the ICD-10 codes you’re using. Detailed information like dominant side, site-specificity, and the affected body part is valuable information to have handy in the event of a claims denial or audit.

Be sure treatment is medically necessary for the diagnosis

The code you choose must be medically necessary and directly relate to the service you provided to the patient.

Avoid unspecified codes when possible

Unspecified codes have their place in ICD-10 coding. There are certain instances where using one may be your only option. But because unspecified codes tend to be used as shortcuts, you’ll want to be sure you use them only if a specified code isn’t available.

For more on ICD-10 coding, read Top ICD 10 Codes for occupational therapy.

The right EHR can help make billing easier

There are a lot of moving parts to occupational therapy billing. Using a good EHR can help you prevent mistakes and streamline your process, speeding up reimbursements. Practice management software allows you to store information digitally and auto-populate your claims forms with details from your notes. It can also help ensure you’re using the best codes for your services. 

See how Ensora Rehab Therapy Suite can help you improve your claims acceptance rate, and request a free demo today.