HELLO, WHAT ARE YOU LOOKING FOR

Private Insurance

Cigna implements site-of-care policy for outpatient OT

Julie Lenhardt

Effective October 1, 2025, Cigna and its partner, American Specialty Health (ASH), implemented a new site-of-care policy affecting outpatient occupational therapy (OT) and physical therapy (PT) services. Under this policy, hospital outpatient departments (HOPDs) must obtain authorization for OT and PT services following an initial evaluation. Cigna and ASH have stressed that the new policy emphasizes medical necessity as the cornerstone for approving hospital-based outpatient therapy services – in other words, there must be a compelling reason for patients to receive outpatient therapy services in an HOPD rather than a free-standing therapy clinic.

According to Cigna’s guidelines, OT services provided in an HOPD setting are considered medically necessary when one or more of the following criteria apply:

  • Specialized equipment is required
  • Specialized personnel are needed
  • Geographic limitations exist
  • Complex clinical conditions are present

Key insights from ASH’s informational webinar

AOTA staff recently attended a webinar hosted by ASH to gain clarity on the policy’s implementation. Below are important takeaways for providers:

  • Scope of application: The policy applies only to Cigna commercial plans where Cigna is the primary insurer. It does not apply to Medicare Advantage plans.
  • Network status: Both in-network and out-of-network HOPDs are subject to the authorization requirement.
  • Authorization process:
    • The online authorization form includes dropdown menus for each of the four medical necessity criteria.
    • If none of the drop-down menus provide the detail a HOPD needs to describe unique circumstances, or if initial approval is not granted after the HOPD selects an option from one of the drop-down menus, providers may submit additional information via an open text field.
    • A Clinical Quality Evaluator (CQE) - a licensed peer reviewer - will assess the submission and issue a final determination.
  • Geographic limitations: Providers may enter any address relevant to the patient (e.g., home, work, school) to help determine geographic limitations based on the patient's preferred location for receiving services. If no other criteria are met and contracted providers are available nearby, Cigna/ASH will provide a list of up to five alternative in-network providers.
  • Timeliness of review: CQE determinations are expected within one business day of submission.
  • Reimbursement for initial services: The initial date of service, including any treatment provided in conjunction with the evaluation, will be reimbursed regardless of the authorization outcome.
  • Continuity of care: Patients already receiving care in an HOPD prior to October 1 do not require authorization to continue treatment. The policy applies only to new patients beginning care on or after October 1.
  • State exemptions: Nebraska, Iowa, and South Dakota are currently exempt from this site-of-care policy.

ASH emphasized that all determinations are made on a case-by-case basis and do not rely on automated algorithms or population-level data. Providers may request a peer-to-peer discussion with a CQE if they wish to contest or clarify a determination.

Looking ahead: potential expansion of site-of-care policies

As providers adjust to Cigna’s new site-of-care requirements, it is important to recognize that similar policies may become more widespread across other payers, including Medicare, in the future. In the CY 2026 Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System Proposed Rule, the Centers for Medicare & Medicaid Services (CMS) requested stakeholder feedback on the potential expansion of its volume control methodology. Currently applied to excepted off-campus provider-based departments, CMS is considering whether to extend this methodology to include on-campus outpatient department (OPD) clinic visits.

This inquiry reflects CMS’s concern about the growing volume of clinic visits billed under the OPPS, which may be contributing to unnecessary service utilization and increased Medicare spending. While CMS has not yet proposed a formal policy change, its request for input signals a broader interest in controlling costs and optimizing site-of-care decisions. It can reasonably be inferred that commercial payers are facing similar pressures and may continue to adopt policies that steer patients toward lower-cost settings unless clear medical necessity supports care in hospital-based environments.

AOTA will continue to monitor these developments and advocate for policies that support access to medically necessary occupational therapy services across all settings. OT practitioners with questions or concerns are encouraged to reach out to AOTA’s Regulatory Affairs team at regulatory@aota.org.

Advertisement