CMS reinforces role of OT in PHP and IOP

Despite occupational therapy (OT) being rooted in mental health and listed as a covered benefit under partial hospitalization programs (PHPs) and intensive outpatient programs (IOPs) (CMS, 2023), OT practitioners (OTPs) report challenges with providing OT services in these settings due, in part, to employer confusion on OT’s role and reimbursement for PHP and IOP services under Medicare Part B. To address this, AOTA has strongly advocated with the Centers for Medicare and Medicaid Services (CMS), sharing concerns that provider confusion regarding OT coverage and payment has impacted participant access to medically necessary OT services.

AOTA is pleased to share the recent advocacy win from the Calendar Year (CY) 2025 Medicare Hospital Outpatient Prospective Payment System (HOPPS) final rule, where CMS responded to AOTA’s advocacy efforts by reinforcing OT’s role as a critical, covered service within PHPs and IOPs. Within the final rule, CMS noted:

“Occupational therapy services are an important part of PHPs and IOPs, specifically listed in the statute at section 1861(ff)(2)(B) and in the regulations at §§ 410.43(a)(4)(ii) and 410.44(a)(4)” (CMS, 2024)

CMS further reinforced the importance of reporting OT services as separate and distinct from other services by using HCPCS code G0129 Occupational therapy services requiring skills of a qualified occupational therapist, furnished as a component of a partial hospitalization or intensive outpatient treatment program, per session (45 minutes or more). They also clarified that while not included in establishing the PHP or IOP daily rate, OTPs working within their scope of practice may also report additional codes, including:

• CPT 96112 Developmental testing
• CPT 96156 Health behavior assessment/reassessment
• CPT 96158, 96164, and 96167 Health behavior interventions
• CPT 96161 Administration of a caregiver-focused health risk assessment for the benefit of the patient
• CPT 97550, 97551, and 97552 Caregiver training services (without the patient present)

Even without immediate financial return, reporting these additional codes consistently and accurately can drive long-term recognition and support for OT in mental health, influencing future reimbursement policies and increasing the profession's visibility within these settings.

Naming OT as an important PHP and IOP service and clarifying OT coding practices reinforces that OT is a vital, covered, and reimbursable service that should be utilized in PHPs and IOPs to meet the occupational needs of program participants. AOTA is grateful to CMS for supporting OT’s role in PHP and IOP programs and will continue to advocate for policies that expand beneficiary access to OT mental health services now and in the future.