How Much Does Medicare Cover for Physical Therapy?

Physical therapy plays a significant role in helping individuals recover from injuries, manage chronic conditions, and improve mobility. Medicare provides coverage for various healthcare needs, including physical therapy, under specific conditions and through different parts of the program. This framework helps beneficiaries access necessary care while outlining their financial responsibilities.

Understanding Medicare’s Coverage for Physical Therapy

Medicare’s coverage for physical therapy is structured across different parts of the program, depending on the setting where services are received. Each part addresses distinct scenarios, from inpatient to outpatient care, ensuring broad coverage for medically necessary services. The aim is to facilitate recovery and functional improvement.

Medicare Part A, known as Hospital Insurance, covers physical therapy when it is part of inpatient care. This includes services received during a qualifying hospital stay, within a skilled nursing facility (SNF) following a hospital stay, or as part of home health care services. For coverage, therapy must be medically necessary, skilled care provided by licensed professionals, contributing to recovery or maintenance of function. For home health, a patient must also be certified as homebound by a physician.

Outpatient physical therapy is primarily covered under Medicare Part B, Medical Insurance. This includes therapy provided in a physical therapist’s private practice, hospital outpatient departments, comprehensive outpatient rehabilitation facilities (CORFs), and even in skilled nursing facilities if Part A benefits have ended or were not applicable. Part B requires a physician’s order or referral for the therapy and a comprehensive plan of care that demonstrates medical necessity. This ensures services are appropriate and expected to improve functional abilities.

Medicare Advantage Plans, also known as Part C, are offered by private insurance companies approved by Medicare. These plans are required by law to provide at least the same level of coverage as Original Medicare (Parts A and B), including physical therapy. However, Medicare Advantage Plans may have different rules, costs, and network restrictions compared to Original Medicare. Beneficiaries should consult their plan documents to understand physical therapy benefits, including any referral or prior authorization requirements.

Out-of-Pocket Costs and Specific Coverage Rules

Understanding financial obligations for Medicare-covered physical therapy is essential. These costs vary depending on the Medicare part providing coverage and the specific services received. Deductibles and coinsurance are standard components of a beneficiary’s out-of-pocket expenses.

For physical therapy received during an inpatient hospital stay, Medicare Part A involves a deductible of $1,676 per benefit period in 2025. After the deductible, specific coinsurance amounts apply for extended stays. For example, in 2025, beneficiaries pay $419 per day for days 61 through 90 of a hospital stay and $838 per day for lifetime reserve days beyond day 90. If physical therapy is provided in a skilled nursing facility, Part A covers the first 20 days in full after a qualifying hospital stay, but a coinsurance of $209.50 per day applies for days 21 through 100 in 2025.

Outpatient physical therapy under Medicare Part B requires beneficiaries to meet an annual deductible, which is $257 in 2025. After this deductible is satisfied, Medicare pays 80% of the Medicare-approved amount for physical therapy services. This means beneficiaries are responsible for the remaining 20% coinsurance.

Medicare established therapy thresholds for outpatient physical therapy and speech-language pathology services, and a separate threshold for occupational therapy. For 2025, the “KX modifier threshold” is $2,410 for physical therapy and speech-language pathology, and $2,410 for occupational therapy. When services exceed this amount, the physical therapist must affirm that the services are medically necessary by adding a “KX modifier” to the claim. Beyond this, a higher “targeted medical review threshold” of $3,000 for physical therapy and speech-language pathology, and $3,000 for occupational therapy, triggers medical review. These thresholds are not hard caps that limit coverage but rather points where additional scrutiny or documentation is required to ensure medical necessity.

A range of physical therapy services are covered when medically necessary to restore or improve function. These include therapeutic exercises, manual therapy techniques, and gait training. Modalities like ultrasound, electrical stimulation, and heat or cold therapy are also covered as part of a comprehensive treatment plan. The services must be provided by a qualified physical therapist or by a physical therapist assistant under appropriate supervision.

Certain services are not covered by Medicare. Maintenance therapy, aiming only to maintain function without expectation of improvement, is not covered unless part of a broader plan to restore or improve function. Services not considered medically necessary by Medicare standards, or those from unapproved practitioners or facilities, are not covered. Experimental or investigational services are excluded from coverage.

Practical Steps for Obtaining Covered Physical Therapy

To receive Medicare-covered physical therapy, beneficiaries begin by obtaining a doctor’s order or referral. This prescription is usually provided by a physician or other qualified practitioner, confirming medical necessity. The order specifies the type, frequency, or duration of therapy.

Choosing a physical therapy provider who accepts Medicare assignment is an important consideration. When a provider accepts assignment, they agree to accept the Medicare-approved amount as full payment for services, and they bill Medicare directly. Beneficiaries are then responsible for their deductible and 20% coinsurance. If a provider does not accept assignment, they may charge more than the Medicare-approved amount, and the beneficiary could be responsible for the difference, known as “excess charges.”

Some Medicare Advantage plans or specific services under Original Medicare may require prior authorization before physical therapy begins. Prior authorization is a process where the provider obtains approval from the insurance plan before delivering services. This step ensures the proposed treatment meets the plan’s medical necessity criteria and helps manage costs. Beneficiaries should inquire with their plan or provider about any prior authorization requirements to avoid unexpected denials.

After receiving services, beneficiaries will receive an Explanation of Benefits (EOB) from their Medicare Advantage plan or a Medicare Summary Notice (MSN) from Original Medicare. These documents detail what was billed, approved, paid by Medicare, and the amount the beneficiary owes. The MSN or EOB indicates how the deductible was applied and the coinsurance amount calculated. Reviewing these statements helps beneficiaries understand their financial responsibility and track their healthcare expenses.

If a claim for physical therapy services is denied, beneficiaries have the right to appeal the decision. The appeal process begins with a request for redetermination, a review of the claim by Medicare or the Medicare Advantage plan. If redetermination is unfavorable, further appeals are available, including reconsideration by an independent review entity and hearings before an administrative law judge. Understanding and utilizing the appeal process helps ensure access to medically necessary care.