Top Occupational Therapy Billing Challenges and How You Fix Them

Occupational therapy (OT) billing is complex, and it’s easy to see why. Between managing therapy sessions, navigating insurance requirements, and keeping up with documentation, billing errors are bound to happen. These mistakes can lead to claim denials, payment delays, and compliance risks. But with the right strategies, tools, and attention to detail, you can fix them.

This guide breaks down the most common OT billing challenges and offers proven fixes, best practices, and tools to help your clinic run smoothly and get paid faster.

Declining Reimbursement Rates & CPT Changes

Medicare slashed the conversion factor for OT by 2.83% in 2025, and that’s just part of the picture. Add 17 new CPT codes for telehealth—and you’ve got complexity that’s easy to miscode and costly if done wrong.

Billing units for occupational therapy hinge on accurate CPT code usage—especially with evolving telehealth rules.

How to Fix It

• Train your team on all 2025 CPT changes—especially evaluation and telehealth codes.

• Build pre-bill CPT checks into your workflow using smart billing software or forms.

• Schedule quarterly coding audits to stay compliant and spot trends before they cost you.

Inaccurate or Incomplete Documentation

Poor session notes, vague treatment goals, or missing documentation often result in denied claims or requests for additional information.

How to Fix it 

• Use standardized templates for each type of visit (evaluations, re-evaluations, progress notes).

• Always document:

  • Patient's current status

  • Treatment goals

  • Interventions used

  • Medical necessity

Conduct internal audits regularly to catch gaps before submission.

Declining Reimbursement Rates & CPT Changes

Medicare slashed the conversion factor for OT by 2.83% in 2025, and that’s just part of the picture. Add 17 new CPT codes for telehealth—and you’ve got complexity that’s easy to miscode and costly if done wrong.

Billing units for occupational therapy hinge on accurate CPT code usage—especially with evolving telehealth rules.

How to Fix It

• Train your team on all 2025 CPT changes—especially evaluation and telehealth codes.

• Build pre-bill CPT checks into your workflow using smart billing software or forms.

• Schedule quarterly coding audits to stay compliant and spot trends before they cost you.

Administrative Burden from Insurance Requirements

Billing for occupational therapy services is never set it and forget it. Payers frequently change authorization processes, forms, or timelines. Verifications and pre-auths take time—and missing them can cost you.

What makes this worse?

• Different payer rules for in-network and out-of-network plans 

• Manual verification processes

• Delays in receiving prior auths

How to fix it

• Automate Everything You Can: Choose platforms that automate eligibility checks and prior auth submissions.

• Delegate or Outsource: Assign experienced billing staff or outsource to a company with deep experience in OT billing.

• Improve Communication with Payers: Create a single channel (email or portal) for tracking authorization issues and responses.

Frequent Claim Denials and Payment Delay

Nothing kills momentum like denials. And in OT, they often stem from clerical errors, duplicate claims, or missing documentation.

Typical reasons for denial

• Wrong CPT code for occupational therapy

• No modifier attached

• Incorrect occupational therapy billing units calculated

How to fix it

• Claim Scrubbing Software: Make use of resources that check each claim for mistakes before to submission.

• Define Billing Roles Clearly: Don’t let the same person enter and check claims—separate duties.

• Denial Management Protocol: Track trends, fix issues, and submit timely appeals. Don’t let denials sit in limbo.

Low Reimbursement and Medicare Changes

Medicare cuts reimbursement rates frequently. Pair that with inflation and rising operating costs, and many OT clinics struggle to stay profitable.

Why this hits hard

• Medicare is often the largest payer for older adults.

• Policy updates are often abrupt and unclear.

How to fix it

• Diversify Payer Mix: Expand your client base to include commercial insurance, cash pay, or employer contracts.

• Join Advocacy Groups: Partner with AOTA and other organizations to voice concerns and stay ahead of policy changes.

• Track and Control Overhead: Use simple software to track operational costs monthly, and make quick adjustments.

Ethical and Compliance Concerns

With pressure to increase reimbursements, it’s easy to accidentally cross ethical lines—especially when handling billing codes for occupational therapy across multiple settings.

Risks include

• Upcoding

• Billing services outside of OT scope

• Submitting without adequate documentation

How to fix it

• Ethics Training: Require annual training on compliance and billing integrity.

• Set Transparent Fee Schedules: Make your fee structure public and consistent.

• Limit Scope: Only bill for services clearly defined under occupational therapy.

Quick Comparison: Manual Billing vs. Smart Billing

Feature	Manual Billing	Automated OT Billing Tools
Claim Scrubbing	Manual, error-prone	Auto-scrubbed for clean claims
Insurance Verification	Phone/email delays	Real-time eligibility check
OT Billing Unit Tracking	Calculated manually	Auto-calculated with 8-min rule
Modifier Application	High error rate	Pre-loaded by payer
Audit Preparedness	Low visibility	Centralized digital documentation
Payment Speed	Delayed	Faster reimbursement

Struggling with Occupational Therapy Billing 

At Cube, we understand that occupational therapy billing comes with its own set of challenges—tracking OT billing units, staying compliant with CPT codes, managing authorizations, and handling denials can quickly overwhelm your team.

That’s why our billing experts specialize in simplifying billing for occupational therapy services. From coding accuracy to claim follow-ups, we handle the heavy lifting—so your practice gets paid faster and stays compliant without the constant stress.

Whether you're dealing with complex OT CPT codes, timed vs untimed units, or Medicare shifts, Cube has your back.

Let us fix the problems holding your billing back. Book a quick demo and discover how Cube keeps your revenue on track.

FAQ

1. What are the challenges of occupational therapy?

Occupational therapists often face issues with documentation, coding accuracy, insurance approvals, changing regulations, and low reimbursement rates—all while trying to provide consistent, quality care.

2.What is the occupational therapy evaluation billing code?

97165 is the most often used CPT code for an occupational therapy evaluation. No matter how long it takes, it is utilized once each session and covers a low-complexity evaluation.

3.What’s the difference between timed and untimed CPT codes for OT?

Timed codes, like 97110, show the real length of therapy in 15-minute chunks. Untimed codes such as 97165 are only billed once, regardless of the duration of a session.

Conclusion

Occupational therapy billing isn’t just about submitting claims—it’s about navigating a complex, ever-shifting system without letting revenue slip through the cracks. From coding accuracy to denial tracking, and from telehealth adaptation to automated workflows, every piece matters.