The Individuals with Disabilities Education Act (P.L. 101-476) is signed into law, modernizing the Education of the Handicapped Act. IDEA emphasizes parent and family involvement and states that services should be provided in the least restrictive environment and continues coverage of occupational therapy as a related service and, in early intervention, a primary service. The Omnibus Budget Reconciliation Act of 1990’s (P.L. 101-508) Title VII Allied Health Project Grants Program includes occupational therapy students in new scholarship program for minority and disadvantaged individuals. The law establishes the Center for Medical Rehabilitation Research, creates a National Advisory Board on Medical Rehabilitation Research, and also extends Medicare coverage allowing community mental health centers to provide partial hospitalization mental health services, including occupational therapy. The Americans with Disabilities Act (P.L. 101-336), which prohibits discrimination on the basis of disability, is passed, opening new avenues of service for occupational therapy in areas such as work accommodations and environmental accessibility.

A doctorate in occupational science is offered by the University of Southern California’s Occupational Therapy Department. AOTA establishes the Terry Brittell COTA/OTR Partnership Award, which honors “an OTA and an OT who, through their collaborative efforts to promote the profession of occupational therapy, exemplify the professional partnership.”

The AOTA Standards and Ethics Commission publishes the “Core Values of Occupational Therapy.” AOTPAC holds its first Legislative Conference (now Hill Day), with nearly 350 attendees advocating for the profession on Capitol Hill. AOTA accepts AMA’s invitation to become one of the founding non-physician associations to constitute the Health Care Professionals Advisory Committee participating in the development of the Current Procedural Terminology (CPT) and the Medicare Physician Fee Schedule, which also paid OTs in private practice. The Association provided formal recognition to the Black Occupational Therapy Caucus, which provided the foundation for groups supporting Hispanic  (TODOS), LGBTQ (The Network), Asian/Pacific Islander (AAPOTA), Native American (NNAP), disabled (NOTPD), and Orthodox Jewish ((OJOTC) practitioners.

The Accreditation Council for Occupational Therapy Education is founded and recognized by the U.S. Department of Education. Joint accreditation with AMA, which began in 1933, is discontinued. ACOTE independently accredits both OT and OTA education programs. AOTA adopts Uniform Terminology–III. The National Office moves to 4720 Montgomery Lane, Bethesda, Maryland, where it is currently located. AOTA hires its first full-time Ethics Officer.

AOTA begins publishing the magazine OT Practice.

The Illegal Immigration Reform and Immigrant Responsibility Act of 1996 (P.L. 104-208) includes new pre-screening certification requirements for foreign health care workers seeking visas.  AOTA succeeds in preserving the profession's ability to oversee these requirements for OT practitioners. AOTCB becomes the National Board for Certification in Occupational Therapy, Inc. (NBCOT).

The Balanced Budget Act (P.L. 105-33) make significant cuts to Medicare and causes massive disruption to occupational therapy.  Changes included moving to a prospective payment system for inpatient rehabilitation facilities, home health, and skilled nursing facilities; expanding the cap on private practitioners to therapy in all settings, except hospital outpatient departments, at $1,500; and placing all Part B payment for therapy under the Medicare Physician Fee Schedule.  The BBA also creates the State Children's Health Insurance Program (SCHIP). The Individuals With Disabilities Education Act Amendments of 1997 (P.L. 105-17) retains occupational therapy as a related and primary service in all programs. Florence Clark et al. publish in the Journal of the American Medical Association about the benefits of OT programs to “mitigate against the health risks of older adulthood.”

AOTA adopts the vision statement, “AOTA advances occupational therapy as the pre-eminent profession in promoting the health, productivity, and quality of life of individuals and society through the therapeutic application of occupation.” The Association begins sponsoring systematic reviews, which now inform the Occupational Therapy Practice Guidelines Series.

ACOTE establishes a post-baccalaureate entry for OTs, with all schools to become compliant by 2007. The legal dispute that began in 1996 between NBCOT and AOTA over the NBCOT trademarking of OTR and COTA ends.