CurrentOptumPolicy N/A

Reimbursement for Outpatient Services Rendered Under Supervision by Unlicensed Practitioners

Governs reimbursement for outpatient services billed on CMS 1500/electronic 837p provided by unlicensed practitioners working toward licensure or otherwise not eligible to practice independently, including state-specific applicability and required claim elements.

Policy Summary

PayerOptum

PolicyReimbursement for Outpatient Services Rendered Under Supervision by Unlicensed Practitioners

Policy CodePolicy N/A

Change TypeMaterial updates and clarifications

Effective DateOct 1, 2024

Next Review DateN/A

Key ActionInclude U5 modifier and supervising provider identity, credentials, Tax ID and NPI on each CMS 1500/837p claim when billing supervised outpatient services.

SourceLink

POLICY UPDATE CHANGES

For providers in California, Colorado, Iowa, and Massachusetts, Optum will reimburse for services rendered by unlicensed practitioners working towards clinical licensure effective 10/1/2024.

U5 modifier is required on each claim for services rendered under supervision and claims must include supervising provider identity, credentials, Tax ID and NPI.

Optum will not reimburse for E/M services rendered under supervision by unlicensed practitioners working towards clinical licensure.

4states where reimbursement is allowed without prior Optum approval (CA, CO, IA, MA)

U5required claim modifier for supervised services

E/M excludedE/M services not reimbursed under supervision

Policy Summary

PayerOptum

PolicyReimbursement for Outpatient Services Rendered Under Supervision by Unlicensed Practitioners

Policy CodePolicy N/A

Change TypeMaterial updates and clarifications

Effective DateOct 1, 2024

Next Review DateN/A

Key ActionInclude U5 modifier and supervising provider identity, credentials, Tax ID and NPI on each CMS 1500/837p claim when billing supervised outpatient services.

SourceLink

On This Page

Trek Health ingests and normalizes Transparency in Coverage data and payer policy updates to give provider organizations a clear view of how commercial reimbursement behaves across markets, payers, and services. Our platform transforms raw payer disclosures into structured intelligence that supports contract evaluation, payer negotiations, and service line strategy. By combining market benchmarks with ongoing policy visibility, Trek helps teams identify variability, risk, and opportunity in commercial reimbursement. The result is faster insight, stronger negotiating positions, and more informed financial decisions.

Coverage Criteria for Supervised Outpatient Services

Coverage criteria for supervised outpatient services

Covered when ALL of the following apply:

Coverage determination depends on provider location, payer type, and service type.

ALL of the following

ONE OF
- Provider is located in California, Colorado, Iowa, or Massachusetts; Optum will reimburse supervised outpatient services in these states without prior Optum approval.
- In all other states, Optum will reimburse supervised outpatient services only if Optum has previously approved the service.
ALL of the following
- For members enrolled in Medicare Advantage plans, Optum will not reimburse these supervised outpatient services unless required by federal rules and regulations governing Medicare Advantage plans.
- For Medicaid and CHIP, reimbursement follows the state-specific rules and regulations for the state where services were rendered.

Evaluation & Management (E/M) services rendered under supervision by unlicensed practitioners working toward clinical licensure or other practitioners not eligible to practice independently are not reimbursed.

ALL of the following

Claims must include the U5 modifier on each service rendered under supervision to identify supervisory outpatient services.
Claims must include the legible identity and credentials of a fully independent Optum-credentialed supervising provider, and the supervising provider's Tax ID and National Provider Identifier (NPI) on the CMS 1500 or equivalent electronic claim (837p).

Applicable services: outpatient services billed on CMS 1500 or 837p; excludes ABA and other non-routine outpatient services and entities licensed to provide behavioral health services.

Policy does not apply to ABA services and entities licensed by the Department of Health to provide behavioral health services; see related ABA reimbursement policy.

Billing Codes and Claim Elements

Required modifierModifierCovered

U5	Modifier required for each service rendered under supervision

Claim elements — supervising provider identity, credentials, Tax ID and NPI required on CMS 1500/837p where reimbursement is allowed

Required claim elementsClaims must include legible identity and credentials of a fully independent Optum‑credentialed supervising provider, plus that supervising provider's Tax ID and National Provider Identifier (NPI) on the CMS‑1500 or 837P.

Required modifierU5 modifier required on each claim for services rendered under supervision to identify supervisory outpatient services.

When reimbursement allowedThese claim elements are required for reimbursement where Optum allows payment (e.g., CA, CO, IA, MA or where Optum has prior approval).

Prior Approval, Exceptions, and Provider Responsibilities

Prior Authorization

Prior Authorization Required; State Exceptions and Billing Requirements

Prior authorization and state exceptions apply. Providers must obtain prior approval from Optum where required; reimbursement for services rendered by unlicensed practitioners working toward licensure or by practitioners not eligible to practice independently is allowed only as described below and per state licensing/scope-of-practice rules. When reimbursement is allowed, claims must include the required billing elements to identify the supervising independent provider and the supervised service.

Obtain prior approval from Optum when required (reimbursement in states other than CA, CO, IA, MA is only when Optum has prior arrangement).
CA, CO, IA, MA: Out-of-network providers may bill for outpatient services rendered under supervision only where state mandates permit.
Do not bill E/M services performed by unlicensed supervisees or practitioners not eligible to practice independently — these are not reimbursable.
For Medicare Advantage members, confirm federal Medicare Advantage rules; reimbursement only when required by those rules.
For Medicaid/CHIP, follow the state-specific Medicaid/CHIP rules for reimbursement when participating in Optum networks.
Billing requirements on CMS-1500 (or 837P): include U5 modifier on each supervised service; include legible identity and credentials of the fully independent Optum-credentialed supervising provider, along with the supervising provider's Tax ID and NPI to identify appropriate supervision.

Definitions and Applicable Services

Unlicensed practitioner — definition for practitioners working toward licensure or not eligible to practice independently

DefinitionUnlicensed practitioners working towards clinical licensure or other practitioners not eligible to practice independently.

ScopeIncludes individuals providing services under the supervision of a fully independent Optum‑credentialed provider as governed by state licensing and scope of practice rules.

Exclusion notePolicy does not apply to entities licensed by the Department of Health to provide behavioral health services (see applicable services/exclusions).

Applicable services — outpatient services billed on CMS 1500/837p; mentions exclusions like ABA and other non-routine outpatient services

Applicable service settingOutpatient services billed on the CMS‑1500 form or electronic equivalent (837P) and online provider portal submissions for commercial lines of business.