Occupational therapy documentation: what Medicare checks

Medicare’s 2026 fee schedule assigns 3.01 relative value units to an occupational therapy evaluation. Not to the low-complexity one, or the high-complexity one. To all three. Multiply by the 2026 conversion factor of $33.4009 and every OT evaluation billed to Part B carries a national payment amount of $100.54, whether the therapist documented one performance deficit or seven.

That number reorganizes the conversation about OT documentation. The complexity level does not decide the money. The certification date does, and the progress report date, and whether the minutes on the note match the units on the claim. CMS’s own review data says so, bluntly.

How much does Medicare pay for an OT evaluation in 2026?

Medicare pays a national rate of $100.54 for 97165, 97166 and 97167 alike in 2026, and $68.47 for a re-evaluation (97168). Those figures are the non-facility totals in CMS’s 2026 relative value file multiplied by the $33.4009 conversion factor the CY 2026 fee schedule final rule set for clinicians outside advanced alternative payment models, before geographic adjustment. In 2025 the same three codes paid $100.60. The year-over-year change is six cents.

The descriptor column comes from the CPT descriptors for the OT evaluation codes that AOTA publishes, and the same document carries the sentence that matters: “At a minimum, each of the following components noted in the code descriptors must be documented” to report that level. Every component, profile through decision making, has to be on the page for the level you picked.

The last column is from CMS’s Medicare Physician & Other Practitioners by Geography and Service data for 2024, office place of service. Low complexity was the most-billed OT evaluation level that year. High complexity was 7% of the three. Since payment is flat across levels, what a higher level buys you is a longer list of components a reviewer can check the note against. Code the level the evaluation actually was, and make sure the note can prove it.

What does the 2025 CERT data say about OT documentation?

CMS’s 2025 Medicare Fee-for-Service Supplemental Improper Payment Data puts the improper payment rate for occupational therapists in private practice at 12.8%, a projected $54.1 million, on claims submitted between July 1, 2023 and June 30, 2024. The sample was small, 45 claims, so the 95% confidence interval runs from 2.5% to 23.2%. Treat the rate as a rough size.

The error mix is the part worth keeping. Of the improper payments CMS found for OT private practice, 47.9% were insufficient documentation and 32.6% were no documentation, the category whose root cause throughout the report is “No response” to the records request. Medical necessity errors: 0.0%. Incorrect coding: 0.0%. The remaining 19.6% fell into “other.” Four in five improper OT dollars were lost on paper that was thin or paper that never arrived. Physical therapists in private practice, reviewed on 510 claims in the same report, came in at 19.9% with 88.3% of it insufficient documentation, a pattern this blog has covered for PT.

The report’s root-cause table for the fee-schedule category that carries the therapy-specific errors names the gaps, by count of sampled claims: a missing physician certification or recertification of the plan of care (62), a missing reason for a delayed certification (28), a missing plan of care (20), a missing progress report at the ten-treatment-day mark (12), an inadequate plan of care (11) and missing therapy minutes (10). Not one of those is a clinical judgment call. They are dates, signatures and totals.

What does Medicare require in OT documentation?

Medicare’s required list is short, and it runs on a clock. The Medicare Benefit Policy Manual, chapter 15, section 220.3 names four things a reviewer expects to receive: the evaluation and plan of care, the physician or NPP certification and any recertifications, progress reports including the discharge note, and a treatment note for every treatment day. On format it is explicit: “The format shall not be dictated by contractors.” It says to use the APTA, AOTA and ASHA documentation guidelines “as guidelines, and not as policy.”

Two details in that table catch OT practices specifically. Evaluation minutes are untimed: the manual says “minutes of evaluation shall not be included in the minutes for timed codes reported in the treatment notes.” A 60-minute evaluation does not earn four units of anything. And the progress report belongs to the therapist. OTAs can write elements between reports, but the clinician still writes one every period and has to have actively participated in treatment during it.

The certification rule now has a fallback. CMS’s MLN fact sheet on outpatient therapy documentation, updated September 2025, spells it out: starting January 1, 2025, for a therapist-established plan of care, the physician’s or NPP’s dated signature on the order or referral “may be substituted for a signature on the initial POC if that physician or NPP hasn’t signed and returned the patient’s POC to the therapist within 30 calendar days of the initial evaluation.” The conditions are narrow: the referral has to identify the physician and the patient and name the type of therapy, the record has to show the plan reached the physician within those 30 days, and none of it applies to recertifications. Still, the single largest root cause in the CERT table now has an escape hatch, provided your front desk logs the day the plan went out.

The treatment note is where the minutes live, and the minutes are what the units get checked against. Aurora, the ambient AI scribe in Orion, drafts the note during the visit and suggests the codes, and the therapist confirms both before signing. OT runs on the same core as PT, and the scribe is included on both plans.

What do AOTA’s documentation guidelines add?

AOTA’s Guidelines for Documentation of Occupational Therapy, published in the American Journal of Occupational Therapy in 2018, describe eight document types across four process areas: screening, evaluation and reevaluation, intervention, and outcomes. Medicare’s list maps onto them cleanly: the intervention plan is the plan of care and the contact report is the treatment note. What AOTA adds is the profession’s floor: the client’s full name, date of birth, gender and case number on every page, a professional signature and credential on every entry, and errors “noted and initialed or signed.” It also states the purpose in language a Medicare reviewer would recognize. Documentation exists to “provide an accurate justification for skilled occupational therapy service necessity and reimbursement.” Keep that sentence in mind when a note describes what the patient did but not what the therapist decided.

Does OT have its own KX modifier threshold?

Yes. For 2026, CMS’s therapy services page sets the KX modifier threshold at $2,480 for OT services and a separate $2,480 for PT and SLP services combined. “Claims for services over the KX modifier threshold amounts without the KX modifier are denied.” Above the threshold, the KX modifier is your confirmation that the services are medically necessary “as justified by appropriate documentation in the medical record,” so the record has to carry that weight. A targeted medical review threshold of $3,000 per discipline sits above it through 2028.

A practice that offers both PT and OT is running two meters on the same patient: a stroke patient who has used $2,000 of the PT and SLP allowance has used none of the OT allowance. Track them apart and the KX lands on the right claim at the right time.

None of this asks an occupational therapist to write more. The CERT numbers say the failure is in whether the right document exists, dated and signed, on the day Medicare expects it. A plan of care that leaves the building on day one and a progress report on the tenth visit, not the twelfth, are front-desk and EHR habits, and they are where four of every five improper OT dollars went.