Does Medicare Pay for Inpatient Rehab?
Understand Medicare's coverage for inpatient rehabilitation, including eligibility and financial responsibilities.
Medicare is a federal health insurance program that helps cover healthcare costs for millions of Americans, primarily those aged 65 or older and certain younger individuals with disabilities. Inpatient rehabilitation can be a significant part of recovery following an illness, injury, or surgery. This article clarifies how Medicare covers these services.
Medicare Coverage Basics for Inpatient Rehabilitation
Medicare Part A, or Hospital Insurance, covers medically necessary inpatient rehabilitation services. This coverage extends to care provided in two primary settings: Skilled Nursing Facilities (SNFs) and Inpatient Rehabilitation Facilities (IRFs).
Skilled Nursing Facilities provide daily skilled nursing care or rehabilitation services that can only be practically given in an SNF setting. Services typically covered include physical therapy, occupational therapy, speech-language pathology, a semi-private room, meals, and necessary medications.
In contrast, Inpatient Rehabilitation Facilities (IRFs), also known as rehabilitation hospitals or units, offer more intensive rehabilitation programs. These facilities are designed for individuals who require a higher level of medical supervision and coordinated care from a multidisciplinary team. They are often necessary for conditions like stroke, spinal cord injury, or traumatic brain injury.
Medicare measures coverage for both SNF and IRF stays using “benefit periods.” A benefit period begins the day an individual is admitted as an inpatient to a hospital or SNF. It ends when 60 consecutive days have passed without the individual receiving any inpatient hospital care or skilled nursing facility care. There is no limit to the number of benefit periods an individual can have over their lifetime.
Eligibility Requirements for Coverage
For Medicare Part A to cover inpatient rehabilitation, specific criteria must be met. For Skilled Nursing Facility coverage, a qualifying inpatient hospital stay of at least three consecutive days is required. The admission to the SNF must generally occur within 30 days of leaving the hospital, and the care should relate to the condition treated during the hospital stay.
A physician’s order is necessary for daily skilled care or therapy services. These services must require the expertise of professional personnel, such as registered nurses or therapists, and be provided in a Medicare-certified facility.
Medical necessity means the services are reasonable and necessary for the treatment of an illness or injury, with an expectation of improvement or maintenance. For Inpatient Rehabilitation Facilities, the medical necessity criteria are more stringent. The individual must require intensive rehabilitation, continued medical supervision by a rehabilitation physician, and coordinated care from a multidisciplinary team. This involves at least three hours of therapy per day, five days a week, and the individual must be able to actively participate and benefit from the intensive therapy program.
Understanding Your Financial Responsibility
While Medicare Part A covers inpatient rehabilitation, individuals are responsible for certain out-of-pocket costs, which are applied per benefit period. For 2025, the Medicare Part A inpatient hospital deductible is $1,676. This deductible covers the individual’s share of costs for the first 60 days of inpatient hospital care within a benefit period. If an individual transfers directly from a hospital stay to an inpatient rehabilitation facility within the same benefit period, they typically do not pay a second deductible.
For Skilled Nursing Facility (SNF) stays, the cost-sharing structure is tiered. For the first 20 days within a benefit period, Medicare Part A generally covers the full cost, meaning the individual pays $0 after the Part A deductible has been met. From day 21 through day 100 of the SNF stay, the individual is responsible for a daily coinsurance amount, which is $209.50 in 2025. Beyond day 100 in a benefit period, the individual is responsible for all costs of the SNF stay.
For Inpatient Rehabilitation Facility (IRF) stays, the cost-sharing differs. For days 1 through 60 within a benefit period, the individual pays $0 after meeting the Part A deductible. For days 61 through 90, a daily coinsurance of $419 applies in 2025. After day 90, individuals can use up to 60 lifetime reserve days, during which the daily coinsurance is $838 in 2025. Once these lifetime reserve days are exhausted, the individual is responsible for all costs.
Medicare Part B (Medical Insurance) may also cover physician services received during an inpatient rehabilitation stay. The annual deductible for Medicare Part B in 2025 is $257. For individuals enrolled in Medicare Advantage (Part C) plans, coverage for inpatient rehabilitation must be at least equivalent to Original Medicare. However, these plans are offered by private insurance companies and may have different cost-sharing structures, including varying deductibles, copayments, and coinsurance amounts. It is advisable to review the specific plan details to understand the financial responsibilities.