In 2026, Central Oregon Occupational Therapists May Lose Their Occupations

An upcoming adjustment to how much behavioral health providers get paid through Oregon’s Medicaid infrastructure could put some, specifically occupational therapists, straight out of business.

Occupational therapy, like physical therapy, is intended to help disabled or injured people work through their medical issues and return to normal life. Through OT services, everyday actions that feel out of reach can gradually become achievable.

Blossom Therapeutics is an OT provider in Bend that specializes in child development. “The occupation of a child is play,” its website declares, describing a “family-centric approach” to OT.

The clinic offers “individualized treatment of sensory processing dysfunction” to improve “sensory integration, motor skill development, and social-emotional growth” in developmentally challenged or otherwise neurodivergent children. This could mean confidence boosting activities and positive reinforcement, or it could mean addressing a severe pediatric feeding disorder.

But Blossom Therapeutics might not be around much longer, according to founder and OT practitioner Jenny Johnson. This is due to a recent move by PacificSource Community Solutions, a health insurance subsidiary contracted by the Oregon Health Authority as the Coordinated Care Organization (what the state calls localized health plans under Medicaid) for Central Oregon.

PacificSource is changing several of its reimbursement rates (the amount an insurer pays its associated clinics and health centers for providing specific health services). Affected include “therapeutic activities” and “therapeutic exercises,” self-care management training, and multiple OT-specific medical evaluations.

“Therapeutic activities” is the primary category that Blossom Therapeutics bills its services under. It’s numbered with the treatment code (also known as CPT code) 97530.

In an email to PacificSource, Johnson asked the company to confirm her understanding that the 97530 reimbursement rate will be reduced by roughly 33% – from $42 per unit (a time period such as 15 minutes) to $28.62 per unit. “The contact at PacificSource eventually reached out and told me that, as of 2026, they will be reducing all reimbursement for therapy services,” Johnson said.

A PacificSource document obtained by the Source shows that, on Jan. 1, “All Behavioral Health Services” will be adjusted to “100% of [Oregon Health Plan] allowable.” The OHP standard rate is $28.62, confirming Johnson’s figures. The document is signed by PacificSource Provider Network Vice President Peter McGarry.

Johnson believes the reimbursement reduction will spell the end for her business. “Blossom Therapeutics for a fact will be closing its doors… It’s really devastating,” she said, suggesting that other providers, like Central Oregon Pediatric Associates, could be in for the same. COPA did not respond to a request for comment by time of publication.

“I realize that a lot of these changes are coming from federal cuts,” Johnson said. “So I understand changes might have to happen but [PacificSource] should do it in a gradual way. There’s no conversation right now.” Since 2016, PacificSource has been half-owned by Legacy Health, a Portland-based health organization that has struggled under the current federal climate.

For Johnson, the most painful part is that employees of affected providers will lose their jobs. “I wanna be upfront and transparent with my team about these changes to keep their morale up, but I haven’t told them the devastating news,” she said. “Even if I cut my salary, even if I cut the office, there’s no way to make up those dollars.”

In October, PacificSource laid off 265 of its own employees in Oregon, due to “significant pressures, including rising healthcare costs and Medicaid funding challenges,” per a statement from spokesperson Lauren Thompson.

PacificSource did not respond to multiple requests for comment by time of publication.

This article appears in the Source December 25, 2025.