PTA and OTA Supervision Requirements Under Medicare

Effective January 1, 2025, Medicare requires only general supervision of physical therapist assistants (PTAs) and occupational therapy assistants (OTAs) furnishing outpatient therapy in private practice, down from the direct, on-site standard CMS had required since 2005. The change came in the CY 2025 Physician Fee Schedule final rule and amended 42 CFR 410.60(c)(2) for physical therapists in private practice (PTPPs) and 410.59(c)(2) for occupational therapists in private practice (OTPPs). Under general supervision, the therapist no longer has to be in the office suite while a PTA or OTA is treating a patient; the therapist has to be available, not present.

Two things the rule did not touch: state practice acts, which still control whenever a state requires a stricter level than Medicare’s floor, and the CQ/CO modifier and 85 percent payment reduction, which turn on who furnished the treatment minutes and have nothing to do with how closely that person was supervised.

This matters most for practice owners scheduling PTAs and OTAs across overlapping shifts, and for compliance leads deciding which parts of the Medicare Benefit Policy Manual to trust, since the manual’s own supervision language has not been updated to match the regulation. Current as of September 2026.

What do general, direct, and personal supervision mean under Medicare?

Medicare defines three supervision levels, borrowed from the diagnostic-test rules at 42 CFR 410.32(b)(3) and adopted for therapy in the Medicare Benefit Policy Manual, Pub. 100-02, Ch. 15, §220:

• General supervision means the service is furnished under the supervising professional’s overall direction and control, but their presence is not required during the service.
• Direct supervision, in the office setting, means the supervisor “must be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the service,” though not necessarily in the room. Through December 31, 2025, that presence could be satisfied virtually by real-time audio/video; the regulation now makes the virtual-presence option permanent only for a narrower set of incident-to services furnished after December 31, 2025, under 42 CFR 410.26(a)(2). That’s moot for PTA/OTA supervision in private practice, since the federal standard there is now general, and it doesn’t by itself satisfy a state’s direct-supervision rule.
• Personal supervision means the supervisor must be in the room.

The manual applies the same scale to therapy: supervision levels “are the same as those for diagnostic tests defined in 42CFR410.32,” ranging from personal (in the room) to direct (in the office suite) to general (available but not necessarily on the premises).

What changed on January 1, 2025 for private practice?

The standard for PTAs and OTAs in private practice has moved twice. Before 2005, a CMS Report to Congress on PTA supervision found PTPPs had to provide “personal” supervision, “meaning that the PT must be in the room when the PTA performs the service,” a standard the report noted no state matched: “No State has the strict, full-time ‘personal’ supervision requirement, for any setting, that Medicare places on PTAs providing services in PTPPs.” From 2005 through the end of 2024, Medicare required direct supervision instead: a CMS fact sheet on the CY 2024 final rule noted “Since 2005, CMS has required PTs and OTs in private practices (PTPPs and OTPPs, respectively) to provide direct supervision of their therapy assistants.”

The CY 2025 final rule dropped that to general supervision, effective January 1, 2025, “to allow for general supervision of OTAs and PTAs by OTPPs and PTPPs, when the OTAs and PTAs are furnishing outpatient occupational and physical therapy services, respectively.” The current text of 410.60(c)(2): “Physical therapy services may be performed by a physical therapist assistant under the general supervision of the physical therapist in private practice; services performed by an unenrolled physical therapist must be under the direct supervision of the physical therapist.” The OT parallel at 410.59(c)(2) reads the same way for OTAs and unenrolled OTs.

CMS’s stated rationale was operational, not clinical. The old rule, the preamble noted, did not “allow small practices with one PT and one or two PTAs, for example, to work different or overlapping schedules,” and could delay care “when, for example, a PTPP or OTPP is out sick.” CMS also noted that private-practice direct supervision had been stricter than the general-supervision standard institutional settings already used, and that the change would parallel “the 44 States that allow general supervision of PTAs and the 49 States that allow general supervision of OTAs” (CMS’s counts as of the December 2024 rule). Several commenters, not CMS itself, argued the change could save Medicare up to an estimated $271 million over ten years, citing a 2022 industry-commissioned report; CMS did not adopt that figure as its own finding.

One clause survived unchanged: an unenrolled PT or OT, one who has not completed Medicare enrollment, still must work under direct supervision, a stricter standard than applies to an enrolled PTA or OTA under the same practice’s roof.

Which supervision level applies in each setting?

The general-supervision standard was already the norm outside private practice. The setting, not the assistant’s credential, sets the federal floor:

One gray area: when a PT and PTA (or OT and OTA) are both employed in a physician’s office, the manual lets the physician group bill the PTA’s “directly supervised” services under the enrolled PT’s own PIN/NPI as PT services. That language predates the 2025 rule. Since the manual treats enrolled therapists employed by physician groups as therapists in private practice, the amended 410.60(c)(2) general-supervision standard appears to govern, but the manual has not been updated, so confirm with your MAC before relying on it in a physician-owned practice.

Does Medicare’s rule override my state practice act?

No. Medicare sets a payment condition, effectively a floor; state practice acts set licensure conditions, and where a state is stricter, the state rule governs. CMS said so directly in the CY 2025 preamble: “For the States with more restrictive supervision levels, such as direct supervision, Medicare-covered therapy services provided in those States are required to be furnished in compliance with State law.” CMS’s safety rationale for the federal change leaned on the same point: “PTAs and OTAs, who are State-licensed or State-regulated professionals, will continue to be required to comply with their respective State laws, and work under the direction of the PT or OT in private practice, which sufficiently safeguards patients’ safety and quality of care.”

Three states illustrate the range:

Pennsylvania is stricter than Medicare’s floor; Arizona and New Jersey largely track it, with New Jersey layering on a ratio, an experience requirement, and a cosign rule Medicare itself does not impose. To check any other state, CMS’s own preamble pointed to the FSBPT Jurisdiction Licensure Reference Guide, which lists each jurisdiction’s supervision level by setting with citations. OT supervision varies the same way; CMS counted 49 states allowing general supervision of OTAs, and each state OT board sets its own contact-frequency and ratio rules. Note CMS’s count of 44 states permitting general supervision of PTAs differs from APTA’s advocacy page, which cites 49; where the two disagree, this guide defers to CMS’s figure from the final rule.

The manual still says “direct.” Which one wins?

The regulation does. But reviewers and auditors often read the manual first, and as of its July 30, 2026 revision, the Medicare Benefit Policy Manual still states the pre-2025 rule. Section 230.1(C), last revised in 2014, reads: “General supervision is required for PTAs in all settings except private practice (which requires direct supervision) unless state practice requirements are more stringent, in which case state or local requirements must be followed.” Section 230.2 says the same for OTAs.

That language was never conformed to the amended regulation. The final rule controls; the manual is sub-regulatory guidance that lags it. Keep a copy of the eCFR text or the CY 2025 final rule in your compliance file so you can point to it if a records reviewer cites §230.1 or §230.2 as though it were current.

How does supervision interact with CQ and CO billing?

It doesn’t, and the two rules are worth separating because they changed around the same time and get conflated. The CQ and CO modifiers apply whenever a PTA or OTA furnishes a service “in whole or in part,” measured by minutes, under 410.60(a)(4), and the claim pays 85 percent of what it otherwise would. Supervision level is not an input to that calculation: a PTA visit under general supervision and one under direct supervision take the same modifier if the assistant furnished the same share of the minutes. One commenter on the CY 2025 rule argued that general supervision would shift some PT services to PTAs, “resulting in a greater percentage of claims for services furnished by PTAs being paid at 85 percent.” That is a volume effect a commenter raised, not a change CMS made to how any single claim is coded.

What can a PTA or OTA still not do?

Supervision level doesn’t expand scope of practice. Under the manual, “only a clinician may perform an initial examination, evaluation, re-evaluation and assessment or establish a diagnosis or a plan of care.” A PTA or OTA may contribute objective measurements within their scope, but the therapist must “actively and personally participate” in the evaluation itself. Progress reports must be written by the supervising therapist, not the assistant, at least once every 10 treatment days, and assistants may change treatment goals only under the therapist’s direction.

PTA and OTA services also can never be billed as incident to a physician or NPP; the manual is explicit that this holds “because they do not meet the qualifications of a therapist.” Assistants act “at the direction and under the supervision of the treating physical therapist and in accordance with state laws,” and may not supervise other therapy caregivers themselves.

What should the record show?

Medicare does not require a supervising therapist to cosign every PTA or OTA treatment note. The manual’s required signature element is “the signature and professional identification of the qualified professional who furnished or supervised the services and a list of each person who contributed to that treatment,” and it states directly that “when the treatment is supervised without active participation by the supervisor, the supervisor is not required to cosign the treatment note.” That’s a lower bar than New Jersey’s rule above, which does require a scheduled PT cosign, so a multi-state practice needs to know which standard applies to which location.

Even where no cosign is required, the record should make clear who furnished each service and that the supervising therapist was reachable, since that same documentation supports both the supervision condition and the CQ/CO minute split. Notes that only capture total treatment time leave both questions unanswered under review. See our guides to Medicare PT documentation requirements and plan of care certification for the surrounding recordkeeping rules.

Aides and the RTM precedent

Aides are a separate category, and supervision level doesn’t change their billing status: “Services provided by aides, even if under the supervision of a therapist, are not therapy services and are not covered by Medicare.”

The 2025 change also wasn’t the first move to general supervision for assistants. CMS finalized general supervision of PTAs and OTAs furnishing remote therapeutic monitoring (RTM) services in private practice a year earlier, effective January 1, 2024, stating in its fact sheet that “this will align with the RTM general supervision policy that we finalized in our CY 2023 rulemaking.” See our RTM billing guide for how that policy works.

Supervision level is a staffing and state-law question, not a billing one, and the two shouldn’t get tangled in your documentation. PrismEHR sums timed units across codes as you document, and lets organizations define their own billing rules, including modifier, minute, and unit restrictions by code and payer, that fire at the point of documentation and are reinforced again at claim creation. Whatever supervision arrangement your practice and your state require, the CQ/CO arithmetic still runs on furnished minutes, and getting it right on the first pass matters for physical therapy practices billing under Part B.