Does Medicare Have a Limit on Physical Therapy?

Medicare provides healthcare coverage for millions of Americans, particularly those aged 65 and older, as well as younger individuals with certain disabilities. Physical therapy is a fundamental service that helps many beneficiaries regain function, manage ongoing health conditions, and improve their ability to move. It allows individuals to recover from injuries, address chronic pain, and enhance their overall physical well-being.

Medicare Part B Coverage for Physical Therapy

Medicare Part B covers medically necessary outpatient physical therapy services. The “therapy cap,” which previously limited Medicare payments for these services, was permanently repealed in 2018. This removed annual limits that created uncertainty for beneficiaries needing extended therapy. While the cap is no longer in effect, a system of thresholds and targeted medical reviews is now in place to ensure services remain appropriate.

For 2025, a specific threshold for physical therapy and speech-language pathology combined is set at $2,410. When the cost of therapy services reaches this amount, providers are required to attach a “KX modifier” to claims. This modifier attests that services beyond the threshold are medically necessary and supported by thorough documentation. If the KX modifier is not used for claims exceeding this amount, Medicare may deny payment.

An additional, higher threshold of $3,000 exists for physical therapy and speech-language pathology services combined, which may trigger a targeted medical review. This review process is not automatic for all claims exceeding $3,000; instead, it focuses on providers who exhibit certain patterns, such as high denial rates or unusual billing practices compared to their peers. The purpose of these reviews is to ensure compliance with Medicare guidelines and verify the medical necessity of extensive therapy.

Medically necessary physical therapy refers to services that are deemed reasonable and essential for diagnosing or treating an illness, injury, or condition, and that meet accepted standards of medical practice. This includes therapy aimed at restoring function, reducing pain, preventing further decline, or improving a patient’s condition. Services must be complex enough to require the expertise of a licensed physical therapist or a supervised physical therapist assistant. Common outpatient physical therapy services covered by Medicare Part B include therapeutic exercises, manual therapy techniques, gait training, evaluations, and individualized treatment plans.

Understanding Your Out-of-Pocket Costs

While Medicare Part B covers medically necessary physical therapy, beneficiaries are responsible for certain out-of-pocket expenses. This financial responsibility begins with an annual deductible. For 2025, the Medicare Part B annual deductible is $257. Beneficiaries must pay this amount before Medicare pays its share for covered services, including physical therapy.

After the deductible has been met, Medicare generally pays 80% of the Medicare-approved amount for covered outpatient physical therapy services. The beneficiary is then responsible for the remaining 20% coinsurance. This 20% coinsurance applies to each service received, and there is no annual limit on how much a beneficiary might pay in coinsurance under Original Medicare.

Many beneficiaries choose to enroll in supplemental insurance, such as Medigap policies, or Medicare Advantage Plans (Medicare Part C), which can help manage these out-of-pocket costs. Medigap policies cover some or all of the deductibles and coinsurance amounts that Original Medicare does not. Medicare Advantage Plans, offered by private companies, must provide at least the same coverage as Original Medicare Part A and Part B. However, they often have different cost-sharing structures, such as copayments per visit, and may offer additional benefits. These plans might reduce or eliminate the 20% coinsurance for physical therapy, depending on the specific plan’s design.

Accessing Covered Physical Therapy Services

To ensure physical therapy services are covered by Medicare, a doctor’s order or referral is generally required. This order certifies that the physical therapy is medically necessary for the patient’s condition. While direct access laws in some states might allow for an initial evaluation without a physician referral, ongoing therapy typically requires a physician to oversee the plan of care.

Receive care from a physical therapist or facility that is approved by Medicare. Medicare-approved providers have met specific federal requirements and are authorized to bill Medicare for their services. Confirming a provider’s Medicare participation status before beginning treatment can help avoid unexpected costs.

Ongoing documentation by the physical therapist is important for demonstrating medical necessity and progress, especially for services that approach or exceed the manual medical review threshold. This documentation includes patient progress notes, treatment plans outlining goals, and reports detailing improvements or the need for continued therapy. Thorough records justify the services provided and are essential if a claim is selected for review.

If a claim for physical therapy services is denied by Medicare, beneficiaries have the right to appeal the decision. The appeal process generally involves several levels:
A redetermination by a Medicare Administrative Contractor, which must be requested within 120 days of receiving the initial denial.
A reconsideration by a Qualified Independent Contractor, which must be requested within 180 days of the redetermination decision.
An appeal to an Administrative Law Judge.
An appeal to the Medicare Appeals Council.
Judicial review in a U.S. District Court.

Each level of appeal has specific timeframes and requirements, and instructions are typically provided with each decision letter.