Does Medicare Pay for Physical Therapy?

Physical therapy is important for recovering from injuries, managing chronic conditions, and improving mobility, helping individuals regain function and maintain an active lifestyle. As people approach or enter retirement, a common question arises regarding how Medicare, the federal health insurance program, covers these necessary rehabilitation services. Understanding Medicare’s structure and its specific provisions for physical therapy can help beneficiaries navigate their healthcare journey with greater financial clarity and confidence.

Medicare Parts and PT Coverage

Medicare covers physical therapy services through various parts, each designed for different healthcare settings. Coverage depends on where services are received. This structure helps ensure beneficiaries can access care whether in a hospital, skilled nursing facility, or outpatient treatment center.

Medicare Part A, or Hospital Insurance, primarily covers physical therapy during inpatient stays. This includes services in a hospital, a skilled nursing facility (SNF), or as part of qualifying home health care if homebound. For instance, therapy during a short-term SNF stay after hospital discharge falls under Part A.

Medicare Part B, or Medical Insurance, is the primary source of coverage for most ongoing physical therapy. It covers outpatient services in various settings, such as a therapist’s private office, an outpatient clinic, a hospital outpatient department, or through a home health agency if Part A home health criteria are not met.

Medicare Part C, or Medicare Advantage Plans, are offered by private, Medicare-approved companies. They must cover at least the same services as Original Medicare (Parts A and B), including physical therapy. However, these plans may have different rules, costs, and networks. Beneficiaries should consult their plan’s details to understand their physical therapy coverage.

Coverage Requirements and Limitations

Medicare covers physical therapy services only when certain conditions and requirements are met. These rules ensure the therapy is appropriate and beneficial for the beneficiary’s condition.

Physical therapy coverage requires medical necessity. Services must be reasonable and necessary for diagnosing or treating an illness or injury, or to improve a body part’s function. Therapy cannot be solely for maintenance or general wellness; there must be an expectation of improvement or a need to prevent further decline related to a specific medical condition.

A physician’s order or referral and a plan of care are also required. Before therapy begins, a physician must refer the beneficiary. A licensed physical therapist then develops a written plan outlining specific goals, therapy types, and session frequency. This plan requires periodic physician review and certification.

Physical therapy services must be provided by qualified professionals. This means a licensed physical therapist or a physical therapist assistant working under a licensed physical therapist’s direct supervision must deliver the therapy.

Documentation of progress is important for continued coverage. Therapists must document the beneficiary’s progress throughout treatment. If no significant improvement is expected, or maximum functional improvement is reached, Medicare coverage may be discontinued. While “therapy caps” no longer apply, Medicare may review higher spending amounts to ensure medical necessity. Some services or Medicare Advantage plans may also require prior authorization.

Understanding Your Costs

Understanding physical therapy costs under Medicare involves knowing potential out-of-pocket expenses. These vary based on Original Medicare, Medicare Advantage, or supplemental coverage. Beneficiaries should be aware of applicable deductibles, coinsurance, and copayments.

For Original Medicare, physical therapy costs differ between Part A and Part B. If therapy is received during an inpatient hospital stay or in a skilled nursing facility under Part A, a deductible applies per benefit period. In 2025, the Part A deductible is $1,676. For SNF stays, there is no coinsurance for the first 20 days, but a daily coinsurance of $209.50 applies for days 21 through 100 in 2025.

Under Medicare Part B, which covers most outpatient physical therapy, beneficiaries pay an annual deductible. In 2025, the Part B deductible is $257. After meeting the deductible, beneficiaries typically pay 20% of the Medicare-approved amount for most outpatient physical therapy services, with Medicare paying the remaining 80%.

Medicare Advantage Plans (Part C) have their own cost-sharing structures, differing from Original Medicare. These plans often feature varying copayments, coinsurance, and deductibles for physical therapy. Beneficiaries should review their plan’s summary of benefits. Most Medicare Advantage plans also include an annual out-of-pocket maximum, capping the amount a beneficiary pays for covered services.

Medicare Supplement Insurance, or Medigap, can help reduce out-of-pocket costs for Original Medicare beneficiaries. Sold by private companies, Medigap policies can cover some deductibles, coinsurance, and copayments that Original Medicare does not, including for physical therapy.