How OTs and PTs Are Blocked from Serving Older Adults

The US healthcare system has a major problem on its hands: in the current payment environment, it is almost impossible for outpatient OTs and PTs to effectively serve older adults with complex care needs.

Luckily, the fix is simple.

If you drive around any community in America, you’ll likely find a smattering of pediatric, hand therapy, pelvic floor, and general outpatient rehab clinics.

Need help with tennis elbow? OTs and PTs are available in abundance!

But what if you need help aging in place, preventing falls, or managing neurodegenerative diseases like dementia, Parkinson’s, or ALS? Unfortunately, you probably won’t find any clinics focused on meeting the complex needs of older adults.

Why is that?

It’s certainly not because:

• The need isn’t there (it is).

• OTs and PTs aren’t trained for it (we absolutely are).

• The evidence doesn’t support it (it overwhelmingly does).

Instead, the answer lies hidden in a 1,600-page document recently released by the Centers for Medicare & Medicaid Services (CMS): The 2027 Physician Fee Schedule proposed rule.

The fee schedule largely determines not only how much we are paid for the services we provide, but also which services we can bill for. When you dig into the 2027 edition, you will find that the types of services OTs and PTs can bill for haven’t meaningfully changed since the 1990s, long before we transformed our workforce to handle high-complexity care.

Here’s a rundown of all the ways our profession has evolved over the last few decades, and how today’s outdated billing codes are making it unnecessarily difficult for older adults to access the care they need.

From the ’90s to Today: A Total Transformation of the OT and PT Workforce

The healthcare landscape looked totally different in the ’90s:

• Life expectancy was 75.4 years. (Today it’s 79.0 years).

• Older adults made up 12.5% of the population. (Today they make up over 18%).

• Healthcare initiatives were focused on acute hospital stays and short-term recovery. (Today, the number-one concern is caring for an aging population with chronic conditions).

OT and PT were also fundamentally different professions in the 1990s. Most practicing OTs and PTs held bachelor's degrees, and the therapy assistant workforce was just starting to take shape.

In the decades that followed, we evolved our professions in line with society’s changing needs. We started by deepening our entry-level education. Today, you can NO LONGER enter OT or PT with a bachelor's degree. Instead, you MUST have a master’s degree or doctorate to enter these professions.

Thanks to all that extra education, we’ve dramatically expanded our skillset. OTs and PTs can handle much more complex cases, and most states trust us to provide true frontline care.

Back in the ’90s, you had to get a doctor’s referral to see an OT or PT. Today, you will find some form of direct access in almost all states (meaning you don’t legally need your doctor’s permission to see a therapist).

Check out the chart below to see the remarkable numbers behind this workforce transformation:

The Math Isn’t Mathing: How a Business Model Stuck in the ’90s is Holding Us Back

Unfortunately, our billing codes were established before this workforce transformation took hold—when OT and PT were still entry-level bachelor's degree professions. Naturally, the codes were designed for “low-complexity work,” focusing heavily on therapeutic exercise and therapeutic activity (i.e., the “physical” components of therapy care).

This can be important work, but it can also be bachelor's-level work.

At that time, our options for measuring patient progress were also comparably primitive. Honestly, the overall healthcare system still hadn’t quite figured out the whole value-based care thing (i.e., tying payment to whether a patient actually got better). So instead, payment was built around the time a practitioner spent providing care to a patient. This is the essence of fee-for-service.

Because our billing codes were largely limited to low-complexity services, the only way for us to increase payment was to increase service volume—and we were heavily incentivized to do just that.

This model is still driving care operations in many clinics today. Decades later, OTs and PTs are financially incentivized to:

• Vigilantly monitor payer mix: Therapy businesses operate on thin margins, so they often try to attract as many private-pay clients as possible (a typical private-pay evaluation is billed at around $200). If a practice can get ~20% private-pay clients, that tips the scale to profitability. They also often drop services for low-paying payers. All of this affects care access for certain populations (many of which are already underserved).

• Keep evaluations short and provide treatment on day one: Many clinics target less complex patients, meaning they can realistically complete an initial evaluation in 20–30 minutes. Evaluations are billed at roughly $98, but since that’s not enough to cover overhead, therapists strive to also provide treatment in that first session. This is clinically appropriate for less complex patients who are eager to get started right away, so for those patients, therapists might tack on therapeutic exercise (billed at around $28) and therapeutic activity (billed at around $34) for a total visit charge of around $160. (As a side note, most chiropractors—who have comparable doctoral training but fewer regulations—charge $150–$250 per evaluation. No wonder you see lots of these offices as you drive around America.) :-)

• Leverage direct access: Private-pay clients can typically go directly to a therapy clinic to begin treatment—no referral needed. Unfortunately, direct access isn’t always so cut-and-dried for patients with third-party payers (especially Medicare). By the time a Medicare patient sees a doctor and gets a therapy referral, the window for conservative care may have closed, and the doctor may recommend imaging or surgery first.

• Utilize a variety of treatment codes (naturally avoiding MPPR): For low-complexity conditions, billing a variety of codes throughout a session makes clinical sense (and research backs this up). For example, you may bill therapeutic exercise, therapeutic activity, self-care, manual therapy, and neuromuscular re-education all in one session. This also allows you to avoid the negative financial impact of the Multiple Procedure Payment Reduction (MPPR), a system Medicare and many commercial payers use to reduce reimbursements when several units of the same code are billed for a single session.

• Leverage Remote Therapeutic Monitoring (RTM) to boost recurring revenue: Low-complexity patients (e.g., young orthopedic, sports, or post-surgical cases) are often tech-literate and more likely to follow standardized home programs. This makes them ideal candidates for RTM tools. By billing initial setup (CPT 98975) and monthly data management (CPT 98977, 98980), clinics can add around $105–$130 per patient, per month in recurring revenue.

Unfortunately, this model completely fails patients with complex care needs—the exact patients we endeavored to serve when we elevated OT and PT to master’s and doctorate-level clinicians. Over the years, many therapists have tried (and mostly failed) to find a way to serve patients with complex needs.

Here are some of the main reasons why those business models have fallen flat:

• Evaluations take longer, but reimbursement is the same regardless of complexity: Low-complexity evaluation codes pay the exact same rate as high-complexity evaluation codes (e.g., CPT 97161 and CPT 97167 both pay around $98). It simply does not work to squeeze an evaluation for someone with a new dementia, Parkinson’s, or MS diagnosis into 20 minutes. Evaluating someone with a life-altering diagnosis is fundamentally not the same as evaluating someone with a case of golfer’s elbow. Ideally, we are spending 60–90 minutes with these complex patients, but at $98 for a 90-minute block, the math falls apart immediately. Here’s a visual illustrating the stark payment imbalance between low-complexity and high-complexity evaluations:

• OTs and PTs cannot opt out of Medicare: Despite a huge cohort of patients and families who are desperate for these evidence-supported services—and who would eagerly pay out-of-pocket—federal regulations prohibit therapists from accepting private pay from Medicare-eligible clients. This shuts the door on using a private-pay mix to maintain healthy margins.

• There is no true direct access under Medicare: Because OTs and PTs cannot bill Medicare Part B without a physician-certified plan of care, older adults face delays and miss critical windows for conservative care.

• Complex clients face heavy MPPR penalties: Higher-complexity interventions take longer. A single self-care or cognitive intervention session can easily span 30-plus minutes. But therapists who bill multiple units of the codes for these services are hit harder by Multiple Procedure Payment Reduction (MPPR), where the practice expense value of subsequent units is cut by 50%, destroying already-thin margins.

• Older adults with complex needs are often poor candidates for RTM: The care extension RTM affords to orthopedic clients does not translate to complex neurological or cognitive conditions. Handing an advanced ALS or stroke patient an exercise app can feel clinically tone-deaf. As one dementia therapist told me: “In the past couple weeks, I’ve helped different families navigate difficult situations, like elopement, the patient jumping from moving vehicles, and a patient who was eating toilet paper. There’s no app for that.”

• Mental and behavioral health services are excluded from outpatient billing: OTs are uniquely trained to provide cognitive and mental health services, but Medicare Part B does not recognize OTs as mental health providers or allow us to bill psychotherapy CPT codes (like 90832–90837). Therapists managing severe behavioral, cognitive, or psychiatric symptoms in outpatient settings must shoehorn this high-level care into physical rehab codes, leaving essential mental health support—that we are totally capable of delivering—underfunded or denied.

How Patients and the US Health System Lose in our Current Situation

Unfortunately, the current Medicare fee schedule makes it virtually impossible to run a financially viable therapy practice built for older adults with complex care needs.

And so, America has become a giant access desert for frontline conservative care for older adults with neurodegenerative conditions and multi-morbidities. This, in turn, has driven up the cost of specialist visits, fall-related care, emergency hospitalizations, and early nursing home placements.

The current setup also bizarrely limits the free market and innovation in eldercare.

If Bill Gates (or any ultra-wealthy American over 65 who is enrolled in Medicare Part B) wanted to hire a specialized occupational therapist for private-pay dementia care, under the current rules, he legally couldn’t do it.

That’s one extreme example, but the point is that no matter who you are, your older loved ones simply do not have access to the full breadth of evidence-based care they want and need.

The US health system also loses, because conservative care is one of our best tools for containing costs by:

• Preventing falls (falls are a $50 billion annual medical problem in the US)

• Delaying nursing home entry (a single year in a nursing home averages over $115,000 per person)

• Reducing hospital readmissions (30-day readmissions cost Medicare over $26 billion every year)

• Slashing avoidable ER visits (a single ER visit averages $1,500 to $2,000 or more before inpatient admission)

• Mitigating dementia care costs (dementia care is projected to cost $409 billion in 2026 alone)

• Avoiding unnecessary surgeries (a single avoided joint or spine surgery saves Medicare $30,000 to $50,000 or more)

In an era of skyrocketing costs, we have a proven solution that simply isn’t being utilized to the fullest due to arcane billing and compliance constraints.

So, let’s get to the easy fix...

Un-damming OT and PT: How to Fix our Care Bottleneck for Older Adults

Right now in the United States, we have nearly one million OT and PT professionals who are practicing at the bottom of their scope.

We are ready and able to utilize our extensive training to meet the demands of this new era of care. We just need the reimbursement structure to do it.

Here are the two simple fixes we are asking Medicare to push forward:

• ✅ Non-time-based management codes: We believe therapists need a small set of non-time-based management codes to reflect the ongoing clinical reasoning and longitudinal care we provide, especially in complex cases.

• ✅ Tiered evaluation reimbursement: We believe our existing complexity-based evaluation codes should be reimbursed differentially.

That’s it.

These simple administrative changes would transform therapy access for older adults. Under federal law, CMS holds authority to revalue misvalued code families and establish Medicare-specific codes whenever payment structures no longer reflect real-world clinical care.

To paint a picture of what our work would look like if complexity was valued using the exact same ratios CMS already applies to physicians, we built the chart below.

We kept our current evaluation rate as the baseline floor for low complexity ($97.86) and applied physician-equivalent multipliers (1.70x for moderate and 2.27x for high):

By Sept. 14th: Ask CMS to consider these changes for 2027

At OT Potential, we created a short template OT and PT professionals can use to advocate to CMS for these changes. All you have to do is copy and paste the template (with your own additions!) into the federal comment portal. You’ll be asking CMS to incorporate our requested additions into the final version of the rule, which will be published in November.

👉 [Get the short comment template here]

We will also publish our full letter with the complete legal argument behind these changes later this week.

In Summary

America has a healthcare cost problem. It also has a massive challenge in figuring out who is going to care for the country’s aging population. Technology will help some—but most tech is designed to support low-complexity care.

We believe the real bottleneck lies in limited access to high-complexity care, and OTs and PTs are more than ready to meet this need. We have transformed our workforce to rise to this moment; now, it’s up to Medicare to transform our billing codes and get us there.