After the License: Medicare Enrollment for Occupational Therapists

A license or OT Compact privilege lets you practice occupational therapy in a state. It does not make you a Medicare provider. If you will bill Medicare in your own name, you enroll with CMS as an "Occupational Therapist in Private Practice" using the CMS-855I, usually online through PECOS, and you meet Medicare's private practice rules for each location. If you work for a hospital, skilled nursing facility, home health agency or other provider, that provider bills Medicare, and its own enrollment covers your services. OTAs do not enroll on their own; Medicare pays for their services only when an OT appropriately supervises them.

Who needs to enroll?

The Medicare rule for outpatient OT, 42 CFR 410.59(a)(3), describes three ways services can be furnished:

• By a provider, such as a hospital or rehab agency, or under arrangements with one. The provider is enrolled and bills.
• By, or under the general supervision of, an OT in private practice. This is the route that needs your own enrollment.
• Incident to the service of a physician, physician assistant, nurse practitioner or clinical nurse specialist, where those professionals may perform OT services within state law.

If you are employed by a provider, check with its credentialing team whether it needs your NPI or other details, but you generally do not need a private practice enrollment. Our sister site explains the difference between credentialing, privileging and enrollment.

What does Medicare require of an OT in private practice?

Under 42 CFR 410.59(c)(1), each OT in private practice must:

1. Be "legally authorized (if applicable, licensed, certified, or registered) to engage in the private practice of occupational therapy by the State in which he or she practices," and practice within that scope.
2. Engage in private practice regularly, as a solo practice, partnership or group practice, or as an employee of one.
3. Bill Medicare only for services furnished in the practice's office space or in the patient's home. Office space must be owned, leased or rented by the practice and used exclusively for it, and a patient's home does not include a hospital, critical access hospital or skilled nursing facility.
4. Treat patients of the practice, for whom the practice collects fees.

The first requirement is where licensing meets Medicare: you need authorization in each state where you furnish services. A compact privilege counts. In MLN Matters SE20008, CMS names the occupational therapy compact and says it will "treat licenses through the interstate license compact pathway as valid, full licenses for the purposes of meeting our federal license requirements." The CMS-855I asks, for each license you report, "Is this a compact license?"

How will the MAC check a compact privilege?

CMS described the process in the same MLN Matters article. Your MAC "first will attempt to verify the license through the interstate license compact pathway using the state licensing board website or another available verification source." If that does not work, the MAC "will request documentation from you to validate the interstate license compact information." Keep a copy of your privilege confirmation, and check that the remote state's public lookup shows it. Virginia, for example, says its compact privileges appear on the state's public license lookup. CMS also told MACs to reopen enrollment applications that had been denied for reporting a compact license.

One more nuance from the regulation: when OT services are billed incident to a physician, PA, NP or CNS, the person furnishing them must meet the standards that apply to OTs, "except that a license to practice occupational therapy in the State is not required" (42 CFR 410.59(a)(3)(iii)). That is a Medicare payment rule only. State practice acts still decide who may practice OT in that state, so it is not a way around licensing.

How does enrollment work?

CMS's enrollment page lays out the steps:

1. Get an NPI through the National Plan and Provider Enumeration System, if you do not have one.
2. Complete the application in PECOS, or on the paper CMS-855I. You select "Occupational Therapist in Private Practice" as your specialty.
3. Pay the application fee, if one applies, using CMS's application fee matrix to check.
4. Work with your Medicare Administrative Contractor (MAC), which processes the application and may ask for more information.

The CMS-855I's section for physical and occupational therapists asks whether you see patients only in their homes, whether you keep private office space, whether you own, lease or rent it, and whether it is used exclusively for your practice. If you answer yes about office space, the form says you "must have and attach a copy of any written agreement that gives you exclusive use of the office space."

Practice locations are reported per MAC. The form says that if you have practice locations outside the jurisdiction of the MAC you are applying to, you "must submit a separate CMS-855I Enrollment Application to the MAC that has jurisdiction for those locations." An OT who opens a location in a new state may be dealing with a second MAC as well as a second board.

After enrollment, CMS says to report a change in ownership, an adverse legal action or a change in practice location within 30 days, and all other changes within 90 days, to avoid revocation of billing privileges. A new state license, a lapsed one, or a new practice address belongs on that list. Our sister site's guide to enrolling in Medicare through PECOS walks through the screens.

Can an OTA enroll in Medicare?

No. The CMS-855I lists "Occupational Therapist in Private Practice" as a supplier type and has no category for occupational therapy assistants. Medicare Part B pays for outpatient OT furnished by an OT or "an appropriately supervised occupational therapy assistant" (42 CFR 410.59(a)), and the OTA's services are billed by the supervising OT's practice or the provider.

Two Medicare rules shape OTA work:

• Supervision. In an OT private practice, an OTA may perform services "under the general supervision of the occupational therapist in private practice," and services by an OT who is not enrolled must be under direct supervision (42 CFR 410.59(c)(2)). That is Medicare's floor; the state's own OTA supervision rules can be stricter and still apply. See OTA supervision rules by state.
• Payment. Claims for services furnished in whole or in part by an OTA must carry a modifier, and since January 1, 2022 they are paid at 85 percent of the otherwise applicable amount (42 CFR 410.59(a)(4); 42 U.S.C. 1395m(v)). "In part" generally means the OTA furnished more than 10 percent of the service's minutes.

Which other Medicare rules do new private practices trip on?

• The plan of treatment. Services must be furnished under a written plan of treatment meeting 42 CFR 410.61, to a patient under the care of a physician, osteopath or podiatrist (410.59(a)).
• The KX modifier threshold. Since 2018, the old annual therapy cap works as a threshold: claims above it need the KX modifier to show the services are medically necessary and documented, or they are denied (410.59(e)(1)(v)). Targeted medical review applies once a patient's annual OT expenses reach $3,000, a figure the rule holds through 2027 (410.59(e)(3)(ii)).
• Telehealth. OTs are eligible Medicare telehealth practitioners through December 31, 2027. See telehealth across state lines.

Billing is its own discipline. White Glove Medical Billing, a separate company, covers that side, including therapy billing limits.

When should licensing and enrollment overlap?

Start enrollment once the license or privilege for that state is issued, since the application asks for it. If you are opening a practice location in a new state:

1. Get the state authorization first: a license by endorsement, or a compact privilege if your home state and the new state both issue.
2. Confirm which MAC covers the new location.
3. Add the location in PECOS, or file a new CMS-855I with the new MAC if it is outside your current one.
4. Keep the license current. A lapsed license or privilege is a change you must report, and a privilege lapses automatically when your home license expires. See renewing compact privileges.

Which parts do we handle?

We handle the license side: licenses by endorsement ($599 for OTs, $499 for OTAs per state), full state applications, and compact readiness, with a guided session while you complete and submit your own privilege application. Our Annual Renewal & CE Compliance service ($299 per license, per year) keeps every license and privilege current so your enrollment is not undermined by a lapse. For Medicare and commercial payer enrollment, we refer you to our sister company, White Glove Credentialing.