Does Medicare Part B Cover Occupational Therapy?

Medicare Part B serves as medical insurance, providing coverage for a broad range of outpatient services. Occupational therapy (OT) is a specialized healthcare service that helps individuals regain independence and improve their ability to perform daily activities after an illness, injury, or surgery. It aims to enhance or restore physical, fine motor, and cognitive functions for everyday living tasks. Medicare Part B makes these rehabilitation services accessible for beneficiaries.

Medicare Part B Occupational Therapy Coverage Conditions

Medicare Part B covers outpatient occupational therapy services under specific conditions. Services must be medically necessary, as determined by a physician or other healthcare provider, to diagnose or treat an illness or injury, restore function, prevent decline, or improve an impairment. The medical record must justify the need for skilled intervention and explain how deficits impact a patient’s independence and daily activities.

Occupational therapy services must be provided by a licensed or certified occupational therapist (OT) or an occupational therapy assistant (OTA) under the supervision of an OT. As of January 1, 2025, OTAs in private practice settings can be supervised under general supervision for Medicare Part B; the OT does not need to be physically onsite but must be available via telecommunication. These services are covered in various outpatient settings, including outpatient clinics, hospital outpatient departments, skilled nursing facilities (for outpatient services), and as part of home health care plans.

A physician’s order or referral is generally required to initiate occupational therapy. The therapist conducts an initial evaluation and develops a personalized plan of care, detailing the impairment and therapy goals. Regular review of the plan of care by a physician or non-physician practitioner remains a condition for continued coverage.

Your Out-of-Pocket Costs for Occupational Therapy

Beneficiaries incur certain out-of-pocket expenses when Medicare Part B covers occupational therapy. Before Medicare begins to pay, individuals must first meet their annual Part B deductible. For 2025, the annual Part B deductible is $257. After the deductible is satisfied, Medicare pays 80% of the Medicare-approved amount for covered services, leaving the beneficiary responsible for the remaining 20% coinsurance.

It is important to select providers who “accept assignment.” This means the provider agrees to accept Medicare’s approved amount as full payment for services. When a provider accepts assignment, they can only charge the beneficiary for the deductible and the 20% coinsurance. If a provider does not accept assignment, they may charge up to 15% more than the Medicare-approved amount, known as balance billing, and the beneficiary would be responsible for this extra cost in addition to the coinsurance.

Medicare has financial thresholds for therapy services. For 2025, if outpatient occupational therapy costs exceed $2,410, the healthcare professional must include a “KX modifier” code on claims. This modifier confirms that the services remain medically necessary for ongoing care; without it, claims exceeding the threshold may be denied. Claims exceeding a higher threshold, such as $3,000 for OT services in 2025, may be subject to targeted medical review to ensure continued medical necessity.

Accessing Covered Occupational Therapy Services

Initiating occupational therapy services covered by Medicare Part B typically begins with obtaining a referral or order from a healthcare provider. A physician or other qualified practitioner assesses the patient’s condition and determines if occupational therapy is medically necessary. This order serves as the foundation for the therapy process.

Finding a Medicare-approved occupational therapist or facility is a practical next step. Beneficiaries can use online tools such as Medicare’s Care Compare to locate providers and compare their quality. This tool allows individuals to search for various Medicare providers, including doctors and clinics, by entering their zip code. It is advisable to confirm with the chosen provider that they accept Medicare and accept assignment to ensure predictable out-of-pocket costs.

Once a provider is selected, the occupational therapist will conduct an initial evaluation to assess the patient’s functional skills and needs. Based on this evaluation, a personalized plan of care is developed, outlining specific goals and interventions. Ongoing therapy sessions will follow the established plan, with periodic re-evaluations and physician reviews to ensure continued medical necessity and to adjust the plan as the patient progresses.