Does Medicare Cover Physical Therapy?

Medicare covers physical therapy services, but coverage varies based on the type of Medicare plan and specific conditions. The scope of coverage depends on whether services are received as an inpatient or outpatient, and adherence to specific requirements is necessary for Medicare to contribute to costs.

Physical Therapy Coverage Under Medicare Parts A and B

Medicare covers physical therapy services through Original Medicare (Parts A and B) and Medicare Advantage Plans (Part C). Each part addresses therapy in various settings, ensuring beneficiaries can access necessary care whether in a hospital, skilled nursing facility, or receiving outpatient care.

Medicare Part A, also known as Hospital Insurance, covers physical therapy when it is part of an inpatient hospital stay or a stay in a skilled nursing facility (SNF). This coverage is part of a broader inpatient benefit for recovery from illness or injury. For instance, physical therapy in an SNF is covered if it follows a qualifying hospital stay of at least three consecutive days. Part A also extends to physical therapy received as part of Medicare-certified home health care if an individual is considered homebound and meets other specific criteria.

Medicare Part B, or Medical Insurance, primarily covers outpatient physical therapy services. This includes therapy provided in a therapist’s office, an outpatient department of a hospital, rehabilitation agencies, or comprehensive outpatient rehabilitation facilities. Part B coverage also applies to physical therapy received at home through certain providers if the individual does not qualify for Medicare’s home health benefit under Part A or has exhausted those benefits.

Medicare Advantage Plans, known as Part C, are offered by private insurance companies approved by Medicare. These plans are legally required to provide at least the same benefits as Original Medicare Parts A and B, which includes physical therapy. While Medicare Advantage plans cover physical therapy, they may have different rules, costs, and network requirements. Beneficiaries with these plans should review their specific plan documents, as copayments, coinsurance, and provider networks can vary significantly.

Conditions for Medicare Physical Therapy Coverage

For Medicare to cover physical therapy services, specific criteria must be met. These requirements ensure services are appropriate, effective, and provided by qualified individuals.

A fundamental requirement for Medicare coverage is that physical therapy services must be medically reasonable and necessary. This means the therapy is considered a specific and effective treatment for a beneficiary’s illness or injury, designed to improve function, restore abilities, or slow functional decline. Services that are deemed not medically necessary will not be covered, and providers are generally required to issue an Advance Beneficiary Notice of Noncoverage (ABN) if they believe Medicare will not pay.

Physical therapy services must be ordered or certified by a physician or other authorized healthcare provider. A written plan of care must be developed by a qualified physical therapist, outlining the diagnosis, long-term treatment goals, and the type, amount, duration, and frequency of therapy services. Effective January 1, 2025, a signed and dated order or referral can meet the initial certification requirement for the plan of care, provided the order is in the patient’s medical record and the plan of care is submitted to the referring provider within 30 days of the initial evaluation. Recertification of the plan of care is generally required every 90 days or if there is a significant change in the patient’s condition.

Services must be performed by a licensed physical therapist or by a qualified assistant working under the supervision of a licensed physical therapist. Medicare does not limit how much it pays for medically necessary outpatient physical therapy services in a calendar year. However, once the costs for combined physical therapy and speech-language pathology services reach a certain threshold, which is $2,410 in 2025, or $2,410 for occupational therapy services, additional documentation is required. This involves applying a KX modifier to claims, indicating that the services are medically necessary and reasonable beyond the threshold. Furthermore, claims exceeding a targeted medical review threshold, set at $3,000 through 2027, may be subject to closer scrutiny to ensure medical necessity.

Your Financial Responsibility for Physical Therapy

Beneficiaries are typically responsible for certain out-of-pocket amounts for physical therapy, including deductibles, coinsurance, and copayments. These costs vary depending on the Medicare part and the setting where services are received.

For physical therapy covered under Medicare Part A, such as during an inpatient hospital stay, beneficiaries are responsible for a deductible per benefit period. In 2025, the Part A deductible is $1,676 for each benefit period. If physical therapy is received in a skilled nursing facility, there is no coinsurance for the first 20 days, but a daily coinsurance of $209.50 applies for days 21 through 100 in 2025. Beyond 100 days in a skilled nursing facility, Medicare Part A coverage for physical therapy typically ceases, and the beneficiary becomes responsible for all costs.

For outpatient physical therapy covered by Medicare Part B, beneficiaries must first meet an annual deductible. For 2025, the Part B deductible is $257. After the deductible is met, Medicare generally pays 80% of the Medicare-approved amount for physical therapy services, leaving the beneficiary responsible for the remaining 20% coinsurance. This 20% coinsurance applies to most outpatient physical therapy services, including those provided in clinics, doctor’s offices, and hospital outpatient departments.

Medicare Advantage Plans (Part C) have their own cost-sharing structures, which can include copayments or coinsurance for physical therapy visits. These costs vary significantly by plan, and beneficiaries should consult their plan’s specific benefits documentation to understand their financial obligations. While Medicare Advantage plans must cover at least the same services as Original Medicare, their out-of-pocket costs might differ from the standard Part A and Part B deductibles and coinsurance.

Medigap, or Medicare Supplement Insurance, can help cover some of the out-of-pocket costs associated with Original Medicare, including deductibles and coinsurance for physical therapy. These plans, offered by private companies, work by paying some or all of the costs that Original Medicare does not cover. Different Medigap plans offer varying levels of coverage, so beneficiaries can choose a plan that aligns with their financial needs and potential healthcare utilization.