What is Skilled Occupational Therapy? And What is NOT?

What is skilled occupational therapy?

Introduction to Skilled Therapy

Occupational therapy is a highly skilled profession and skilled therapy is important for occupational therapy practitioners (occupational therapists and occupational therapy assistants) to understand as it affects how they choose the therapy they deliver, provide interventions, and even more importantly document and bill for them.

First, why should we care in the first place? The answer is reimbursement. In my Introduction to Medicare Course for Occupational Therapy Practitioners, we learn about how Medicare is one of the largest payers of health insurance in the US. And in this course, we also learn about what a ‘covered’ service is and how for something like occupational therapy to be covered, it needs to be skilled.

In other words, if an occupational therapy practitioner does not deliver skilled OT and shows evidence of it in their documentation, their claims could be denied. This means that no one gets reimbursed, such as your hospital, SNF, clinic, agency, or ultimately, yourself. We all want to get paid. Not only that, but by showing that our services as OTs are skilled, we highlight the value of our profession itself from a continued advocacy standpoint. If we don’t continue to advocate for our value, other professions and disciplines could (and they do) claim to do a better job, perhaps at a lower cost than us and edge us out of our relevancy for a particular practice area or setting.

So this means that yes, each and every single OT practitioner has an important role to play when it comes to everyday practice of providing high-quality skilled services and describing why it is important and needed.

AOTA’s Skilled Practice

According to AOTA’s Standard of Practice for Occupational Therapy, “an occupational therapy practitioner is knowledgeable about evidence-informed practice and applies it ethically and appropriately to provide occupational therapy services consistent with best practice approaches.”((American Occupational Therapy Association. (2021). Standards of practice for occupational therapy. The American Journal of Occupational Therapy, 75(Supplement_3).)) Notice that the keywords here, evidence-informed practice, ethical, and best practice approaches. So at one point in time in the past, a therapeutic approach may have been considered skilled. But given what we know now currently, the same approach may not be considered best practice or even within our scope of practice, and the OTP could be providing nonskilled therapy.

CMS Definition of Skilled Therapy

According to CMS, “services that do not require the performance or supervision of a therapist are not skilled and not considered reasonable or necessary services, even if performed or supervised by a qualified professional“.

Also, “the services shall be of such a level of complexity and sophistication or the condition of the patient shall be such that the services required can be safely and effectively performed only by a therapist.”

What this means is that even though a qualified professional like an occupational therapist or occupational therapy assistant is present, if their skillset is not required, then CMS does not see it as skilled, whether if it involves their performance or supervision. The interesting thing is that this can be somewhat subjective.

It helps to look at a more specific example. One intervention that OTPs often provide is exercises to their patients. What makes this skilled versus not skilled then?

Exercise Example

OTPs may work in a setting such as a comprehensive outpatient rehabilitation facility, or CORF. According to CMS, in a setting such as CORF, there must be a potential for restoration or improvement of impaired function. Treatments that involve repetitive exercise such as maintenance programs would not require the skilled services of an OT and would therefore not be covered. This is because nonmedical personnel such as family members or exercise instructors could perform this in the patient’s residence.

Now things get a little more complex. Not only does the subjectivity of skilled factor in the competency and presence of the OTP and what they actually do, but the setting that they provide it in.

Skilled Therapy and Payment

The setting is important because Medicare pays differently and has different timelines for how long they may reimburse based on each setting. For example, under Part A (hospital insurance) Medicare pays for inpatient hospital stays and stays at a skilled nursing facility. OTs work in these settings for Part A. However, this does not mean that OT is always required or appropriate.

For the OTP to work with the patient, they often need a referral (in states where there is no direct access) and then they need to continue to demonstrate and document the need for skilled services in this specific setting. This is because it all comes down to cost. In general, hospital stays are more expensive than in another setting such as outpatient and in the home. There’s more money required to pay the bills and keep the lights running, more staff to pay, more fancy equipment, more supplies and complex procedures, and so on. Not only would CMS care about costs, but so would your employer due to how the hospital gets reimbursed. Medicare pays hospitals using a prospective payment system (PPS) under Part A.

A prospective payment system (PPS) is a payment model used in hospitals and other healthcare facilities to reimburse healthcare providers for services provided to patients based on a predetermined payment amount. In a PPS, hospitals receive a fixed amount of payment based on the diagnosis, procedure, or condition of the patient, regardless of the actual cost of care.

So think about it in the shoes of your hospital if you were working on a case and a patient is at a hospital for an extended period of time and racking up a large hospital bill. If the patient somehow slipped through the cracks and instead would be a better candidate for outpatient or home health. And if all the while, the OTP was providing ‘maintenance’ exercises that could be done equally well by a caregiver or other ‘less expensive staff’. Then why would we need to continue to have OT treat in this manner? Payor sources, the hospital and case management, and your supervisor would probably agree that they wouldn’t. And as like with most things, resources such as a hospital setting and its staff are finite. An example is the peak of the pandemic with COVID-19 where there were more patients than beds in the ER and OT was swamped with patients to see.

What’s Not Skilled

To have a better understanding of what’s skilled, it helps to learn about the opposite and examples of what is not generally considered skilled occupational therapy.

  • In the CORF example, we learned about maintenance programs. These are programs that are designed to maintain the current level of function of a patient. They are not intended to improve or restore function, but rather to prevent a decline in function. Maintenance programs are not typically covered by insurance, e.g., Medicare.
  • Activities of daily living (ADL) training for self-care: Training patients in basic self-care tasks, such as bathing, dressing, and feeding, is an important aspect of occupational therapy. However, ADL training is not always considered skilled occupational therapy, particularly if it is focused on maintaining existing function rather than improving it. We learn in the Medicare course about how they do not reimburse for long-term care services in the home. One way to think about skilled vs. not is again, if a non-qualified person can do it and it doesn’t require the skills of the OTP, then the therapy wouldn’t be skilled.
  • Exercise programs: Occupational therapists may incorporate exercise into a treatment plan to improve strength, flexibility, or endurance. However, exercise programs alone are not considered skilled occupational therapy unless they are tailored to address a specific functional deficit. New OTPs can easily make this mistake when they address co-morbidities or an older condition that is not considered to be the primary diagnosis and focus on it. For example, if an OTP is working with a patient who just had a cardiac condition and then decides to do maintenance therapy for an ongoing carpal tunnel condition, then that may not be considered skilled as they may have been given exercises to do on their own for the latter condition.
  • Sometimes, certain interventions are appropriate, but they may not be considered skilled and billable. This is common with non-therapuetic services. Occupational therapists may provide non-therapeutic services, such as providing information about community resources or educating patients on the use of assistive devices. These services are not considered skilled occupational therapy because they do not involve direct treatment to improve function.

Choosing Wisely

Before OTPs act, we think and plan, such as using a frame of reference and outcome measures. However, it is also to think about occupational therapy from a skilled standpoint as well. Plan ahead and aim to provide mostly skilled services for interventions instead of jumping in, providing non-skilled therapy, and not getting paid for the entire session, or even worse, the entire case.

Overall OT practitioners must provide care that is justifiably reasonable and necessary according to evidence-based clinical standards of care. –CMS

Then with ongoing therapy, the OTP should critically think about whether the services that they are providing continue to be skilled or not, and if not, if it is time to discharge their services.

Documentation and Billing

If we didn’t document it, we didn’t do it, right? So even if you were the best OTP in the world and provided the most skilled therapy there ever was based on evidence-informed therapy, but failed to document it or portray it in a way that you did, then it could result in more work on your part to justify what you did and fight an uphill battle for a denied claim. Even worse, you could be accused of fraud due to omitting a lot of information and having gaps in your documentation.

According to Kearny (2018), one of the purposes of documentation is to “provide an accurate justification for skilled occupational therapy service necessity and reimbursement.”((Kearney, K. (2018). Guidelines for documentation of occupational therapy. AJOT: American Journal of Occupational Therapy, 72(S2), 7212410010p1-7212410010p1.))

Here are some tips to demonstrate the skilled need for occupational therapy services and why you did what you did in a therapy session.

  1. Goal setting: Clearly defining the goals of therapy and documenting progress towards those goals can demonstrate the skilled nature of the therapy. Goals should be specific, measurable, and relevant to the patient’s functional needs.
  2. Objective measurements: Documenting objective measurements of the patient’s functional abilities, such as range of motion, strength, or endurance, can demonstrate the skilled nature of the therapy. These measurements should be taken at regular intervals to track progress and adjust the treatment plan as needed.
  3. Treatment plans: Documenting a detailed treatment plan that is tailored to the patient’s specific needs and goals can demonstrate the skilled nature of the therapy. The treatment plan should include specific interventions and techniques that are based on evidence-based practice and the therapist’s clinical expertise.
  4. Clinical reasoning: Documenting the therapist’s clinical reasoning, including their assessment of the patient’s needs and their selection of interventions and techniques, can demonstrate the skilled nature of the therapy. This can include documentation of the therapist’s decision-making process and their consideration of the patient’s medical history, functional limitations, and other factors that may impact treatment.
  5. Progress notes: Regular progress notes can demonstrate the skilled nature of the therapy by documenting the patient’s response to treatment, adjustments to the treatment plan, and ongoing assessment of the patient’s needs and goals.


In conclusion, skilled occupational therapy is crucial for practitioners to understand to provide high-quality therapy, document services, and ensure reimbursement. Skilled therapy is defined by the Centers for Medicare & Medicaid Services (CMS) as services that require the skill and supervision of an occupational therapist or occupational therapy assistant. Skilled therapy is necessary to improve or restore impaired function and cannot be performed by non-medical personnel such as family members. The setting in which the therapy is provided also plays a role in determining skilled therapy and how Medicare reimburses it.

As an OT practitioner, it is essential to recognize the value of skilled therapy and understand what is not skilled to provide appropriate care and avoid claim denial. By advocating for the value of occupational therapy, practitioners can ensure their relevancy in the profession and highlight the unique contribution they bring to healthcare. A topic such as skilled therapy, Medicare, billing, and documentation is hard to summarize in a single blog post. To help you understand this, check out my CEU Courses that take a deep dive into these topics and quiz your knowledge for OT practice.