The #1 AI-powered therapy

notes – done in seconds

Try for free

The #1 AI-powered therapy notes – done in seconds

Try for free

This blog is brought to you by YUNG Sidekick –

the #1 AI-powered therapy notes – done in seconds

This blog is brought to you by YUNG Sidekick — the #1 AI-powered therapy notes – done in seconds

Try for free – no credit card required

Back to blog

CPT Code 97166: What Medical Billers Need to Know in 2025

Stanley Efrem

Jun 24, 2025

CPT code 97166 is significant in the growing occupational therapy services market. The market value reached $54.06 billion in 2023 and experts project it to hit $128.17 billion by 2032 . Medical billers need to understand and apply this code accurately to ensure proper reimbursement and compliance.

CPT 97166 helps occupational therapists document patient evaluations with moderate complex needs . The 45-minute evaluation needs expanded medical history review and looks at 3-5 performance deficits . This code represents the middle tier in a three-level system that categorizes patients based on complexity .

Proper implementation of the 97166 CPT code description in billing practices ensures appropriate reimbursement and supports moderate complexity occupational therapy evaluation documentation. On top of that, occupational therapist jobs will grow by 11.5% between 2022 and 2032 . Becoming skilled at this moderate complexity CPT code will boost your billing operations.

This piece covers everything about the 97166 CPT code reimbursement, documentation requirements, and compliance best practices for 2025.

Understanding CPT Code 97166 and Its Role in OT Evaluations

Occupational therapy evaluations went through major changes in 2017. The single CPT code 97003 was replaced with three new codes that group patients by complexity levels [1]. This new system created better ways to document different evaluation complexity levels in occupational therapy.

What is CPT 97166?

CPT code 97166 stands for a moderate complexity occupational therapy evaluation with specific documentation requirements. The code has an occupational profile that needs expanded medical and therapy history related to current functional performance [2]. It also needs assessments to identify 3-5 performance deficits in physical, cognitive, or psychosocial skills that limit activities or restrict participation [3].

Clinical decision-making in this evaluation needs moderate analytic complexity. Therapists must analyze the occupational profile, look at detailed assessment data, and think over several treatment options [4]. Patients might have health conditions that affect their occupational performance [2]. These evaluations usually need small to moderate task adjustments or help (physical or verbal) to complete all components [5].

How it is different from 97165 and 97167

The main difference between these codes is their complexity level. Code 97165 (low complexity) needs a quick history review, finds only 1-3 performance deficits, and uses simple clinical decisions without task changes [2]. Code 97167 (high complexity) needs a detailed history review, finds 5 or more performance deficits, and uses complex analysis with major task changes [2].

Time requirements vary between these codes. Code 97165 takes about 30 minutes face-to-face, 97166 needs around 45 minutes, and 97167 usually takes 60 minutes [2].

When to use the moderate complexity CPT code

You should bill 97166 CPT code if your patient's evaluation meets three requirements: expanded medical history review, 3-5 identified performance deficits, and moderate analytic complexity in clinical decisions [6].

This code works best for patients who have health conditions affecting their performance but don't need major changes to complete assessment tasks [6]. Common examples include evaluations to help with daily living activities, adaptive equipment training, or functional mobility training [7].

Note that all three parts must meet moderate complexity requirements. Your evaluation defaults to a lower complexity level if you find only 1-3 performance deficits, even with multiple health conditions needing significant task changes [1].

Key Criteria for Using 97166 in 2025

The right use of CPT code 97166 depends on meeting specific criteria from current guidelines. These requirements will stay significant for accurate billing and reimbursement as we head into 2025.

Number of performance deficits

The life-blood of CPT code 97166 lies in identifying 3-5 performance deficits in physical, cognitive, or psychosocial domains [8]. These deficits must link directly to activity limitations or participation restrictions that affect the patient's daily life [2]. AOTA says these performance deficits should represent "occupations in which the client is experiencing problems" and appear in the care plan [8]. Just counting impairments won't cut it—each deficit needs a clear connection to meaningful occupational performance issues [8].

Review of expanded medical history

CPT code 97166 requires you to perform an expanded review of the patient's medical and therapy records [2]. The review has sections on physical, cognitive, or psychosocial history that relate to the patient's current functional performance [9]. This detailed history helps prove the need for moderate complexity evaluation and backs up your clinical reasoning.

Clinical decision-making complexity

Moderate complexity evaluation needs clinical decision-making with "moderate analytic complexity" [11]. This means a full analysis of the occupational profile, assessment data, and treatment options [2]. Patients who qualify often have health conditions that affect their occupational performance [9]. These patients usually need minimal to moderate task modifications or some physical/verbal help to finish assessment components [12].

Time duration and session structure

CPT 97166 typically takes 45 minutes face-to-face with the patient or family [9]. Remember this isn't strictly time-based [9]. The complexity level determines which code to use, whatever time it takes [9]. The 45-minute timeframe shows what's typically needed to complete everything in a moderate complexity evaluation [4]. Your assessment should give enough time to spot performance deficits and develop treatment options.

Documentation and Billing Requirements for 97166

Proper documentation and billing for CPT code 97166 will give you accurate reimbursement and lower denial risks. Let's get into the specific requirements you need to follow when billing this moderate complexity evaluation code.

Everything in documentation to include

Your documentation for 97166 must have an occupational profile with expanded medical history, assessment of 3-5 performance deficits, and evidence of moderate analytic complexity in clinical decision-making. Notes should clearly describe the patient's functional limitations and how they affect daily activities. On top of that, you need to include the total face-to-face time spent (typically 45 minutes) and your clinical reasoning for treatment options you thought about.

Supporting medical necessity

Your documentation must create a clear picture of the patient's impairments that need skilled intervention. Start by describing the prior functional level to establish potential and prognosis. Next, explain why an occupational therapist's unique skills are needed - assistants or caregivers can't provide this service independently. Use objective measurements to show progress toward functional goals.

Common billing errors to avoid

Frequent mistakes include poor documentation of moderate complexity components, wrong treatment time records, and incorrect claim forms. It's worth mentioning that therapy assistants cannot perform evaluation services - only qualified clinicians can bill for 97166.

Using the 8-minute rule correctly

The 8-minute rule sets the minimum threshold for billing one unit with time-based codes that accompany the evaluation. Units add up this way:

1 unit: 8-22 minutes
2 units: 23-37 minutes
3 units: 38-52 minutes

Relevant modifiers for 97166 CPT

GO modifier serves as the primary code for occupational therapy services (delivered under an occupational therapy plan of care). Since 2022, the CO modifier shows when an occupational therapy assistant performs more than 10% of a service. The CO modifier doesn't apply to 97166 because therapists must perform evaluations.

97166 CPT Code Reimbursement and Compliance Tips

Getting the reimbursement right for CPT code 97166 needs you to follow specific payer guidelines and compliance standards. The right approach to this moderate complexity evaluation code will get your practice appropriate compensation and help you stay compliant with regulations.

Payer-specific considerations

Medicare covers moderate-complexity evaluations that are medically necessary, but you need detailed documentation to back this up [7]. Coverage from private insurance plans varies by a lot between different plans and policies. You should always check if pre-authorization is needed before providing services. Medicare reimbursement rates for 97166 are standardized but can change based on where you're located.

Insurance plans and Medicare often put annual caps or limits on therapy services. To cite an instance, patients with multiple conditions don't need separate evaluations for each condition within the same discipline under CMS rules [13]. One qualified clinician should do a detailed initial evaluation that looks at all identified medical conditions.

How to ensure accurate reimbursement

Your practice can get the most reimbursement for the 97166 CPT code when your documentation clearly shows all three components: expanded medical history, 3-5 performance deficits, and moderate clinical decision-making complexity [9]. Qualified clinicians—physicians, non-physician practitioners, or therapists—must perform therapy evaluation services because these services need clinical judgment that therapy assistants can't provide [7].

Link your treatment directly to functional outcomes. Your documentation should show how the deficits affect the patient's daily activities and participation [3]. This shows the medical necessity that supports therapeutic intervention.

Audit readiness and compliance best practices

You can prepare for potential audits with these compliance practices:

Show exactly how the patient meets moderate complexity criteria
Make clear distinctions between using a re-evaluation (97168) and a new evaluation (97166)
Keep all patient information accurate and current
Look for common errors in documentation regularly

Keep up with annual updates to CPT codes and billing requirements that CMS, AOTA, and AMA publish [14]. You should cooperate with billing specialists who can guide you on using CPT codes effectively and help fix billing issues [3].

Conclusion

Medical billers need to understand and apply CPT code 97166 correctly as the occupational therapy world keeps expanding. This piece has shown that moderate complexity evaluation code needs three key parts: finding 3-5 performance deficits, reviewing expanded medical history, and making moderately complex clinical decisions. The typical 45-minute face-to-face session sets it apart from low complexity (97165) and high complexity (97167) evaluation codes.

Your best defense against claim denials is proper documentation. Your notes should clearly show how patients meet all three complexity criteria and establish medical necessity through functional limitations. This detailed approach helps you get proper reimbursement from Medicare and private insurers.

Always check payer-specific rules before submitting claims because requirements vary between insurance companies. Keep an eye on using correct modifiers like GO for occupational therapy services. Regular reviews of your documentation practices will keep you ready for audits.

The occupational therapy field is growing toward its projected $128.17 billion market value by 2032, which makes this moderate complexity code more valuable. The coding system might look complex at first, but these guidelines give you a clear path to accurate billing. Your practice will see better reimbursement rates and lower compliance risks when you follow these steps consistently.

FAQs

What is CPT code 97166 used for in occupational therapy?

CPT code 97166 is used for moderate complexity occupational therapy evaluations. It involves assessing 3-5 performance deficits, reviewing expanded medical history, and requires moderate clinical decision-making complexity.

How long does a typical 97166 evaluation take?

A typical 97166 evaluation takes approximately 45 minutes of face-to-face time with the patient and/or family. However, it's important to note that this is not strictly a time-based code, but rather complexity-based.

What documentation is required for billing CPT code 97166?

Documentation for 97166 should include an occupational profile with expanded medical history, assessment of 3-5 performance deficits, evidence of moderate analytic complexity in clinical decision-making, and a description of the patient's functional limitations.

Can occupational therapy assistants perform and bill for 97166 evaluations?

No, occupational therapy assistants cannot perform or bill for 97166 evaluations. These evaluations must be conducted by qualified clinicians such as physicians, non-physician practitioners, or occupational therapists.

How does CPT code 97166 differ from 97165 and 97167?

CPT code 97166 represents a moderate complexity evaluation, while 97165 is for low complexity and 97167 for high complexity. The main differences lie in the number of performance deficits assessed, the extent of medical history review, and the level of clinical decision-making required.