How Much Does Medicare Pay for Therapy?

Medicare, a federal health insurance program, provides health coverage for individuals aged 65 or older, some younger people with disabilities, and people with End-Stage Renal Disease. The program helps beneficiaries manage healthcare costs across a range of services, including various forms of therapy. Understanding how Medicare covers therapy involves recognizing the different parts of the program and the specific conditions under which services are covered.

Medicare Parts and Therapy Coverage

Medicare’s structure dictates how different therapy services are covered, primarily through Part A and Part B, with Medicare Advantage plans offering an alternative. Medicare Part A generally covers therapy services received during an inpatient hospital stay, within a skilled nursing facility (SNF) under specific conditions, or as part of qualifying home health care. Part A covers therapy in a skilled nursing facility if the beneficiary has a qualifying hospital stay and requires daily skilled care, such as physical, occupational, or speech-language pathology services. Part A also covers skilled therapy services provided in a beneficiary’s home if they are homebound and require intermittent skilled nursing care or therapy services.

Medicare Part B primarily covers outpatient therapy services. This includes medically necessary physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP) services. These services must be prescribed by a physician or other qualified healthcare professional and provided by a qualified therapist. Part B also extends to mental health therapy services, covering visits with psychiatrists, psychologists, clinical social workers, and other mental health professionals for diagnosis and treatment of mental health conditions. These services must meet Medicare’s medical necessity criteria to be covered.

Medicare Advantage Plans, also known as Part C, are offered by private companies approved by Medicare. These plans are required to cover all the services that Original Medicare (Parts A and B) covers, including therapy services. Medicare Advantage plans may have different rules, costs, and restrictions compared to Original Medicare. The process for accessing services and associated out-of-pocket costs can vary significantly depending on the specific plan chosen.

Your Financial Responsibility for Therapy

Understanding your financial responsibility for therapy services under Medicare involves knowing the deductibles, coinsurance, and copayments associated with each part. For therapy covered under Medicare Part A, beneficiaries are responsible for a deductible per benefit period. For 2025, the Part A deductible is $1,728 for each benefit period. A benefit period begins the day a beneficiary is admitted as an inpatient in a hospital or skilled nursing facility and ends when they have not received any inpatient hospital care or skilled nursing facility care for 60 days in a row.

After the deductible is met, Part A covers the full cost for the first 60 days of an inpatient hospital stay. For skilled nursing facility care, Medicare Part A covers the first 20 days in full after a qualifying hospital stay. From day 21 to day 100, beneficiaries are responsible for a daily coinsurance amount, which is $216 for 2025. Beyond 100 days in a skilled nursing facility within a benefit period, the beneficiary is responsible for all costs.

For outpatient therapy services covered under Medicare Part B, beneficiaries pay an annual deductible before Medicare begins to pay its share. In 2025, the Part B annual deductible is $240. After the deductible is met, Medicare pays 80% of the Medicare-approved amount for most covered outpatient therapy services. The beneficiary is responsible for the remaining 20% coinsurance.

Medicare Advantage (Part C) plans have different cost-sharing structures for therapy services. Instead of the Part B coinsurance, these plans often use copayments per visit, which can vary by plan and type of service. Beneficiaries with a Medicare Advantage plan should review their specific plan documents or contact their plan provider to understand their exact financial responsibilities, including any network restrictions or prior authorization requirements for therapy services.

Medigap policies, also known as Medicare Supplement Insurance, can help cover some of the out-of-pocket costs not paid by Original Medicare, including deductibles and coinsurance for therapy services. If a beneficiary has Original Medicare and a Medigap policy, the Medigap plan would pay the 20% coinsurance for Part B therapy services after Medicare pays its 80%, provided the Part B deductible has been met.

Accessing Covered Therapy Services

Accessing Medicare-covered therapy services involves a few steps. A primary step is finding a therapist who accepts Medicare assignment. When a provider accepts assignment, they agree to accept the Medicare-approved amount as full payment for covered services. This means the provider cannot charge the beneficiary more than the Medicare deductible and coinsurance. Beneficiaries can use the “Find & Compare” tool on Medicare’s official website to search for therapists and other healthcare providers who accept Medicare.

After receiving therapy services, beneficiaries will receive a “Medicare Summary Notice” (MSN) if they have Original Medicare, or an “Explanation of Benefits” (EOB) from their Medicare Advantage plan. The MSN is not a bill but provides a summary of services received, the amount Medicare paid, and the amount the beneficiary may owe. It details the dates of service, the provider’s name, the charges, and how Medicare processed the claim. Reviewing these documents is important to ensure accuracy and understand the financial breakdown of the therapy services provided.

The MSN or EOB will clearly show the Medicare-approved amount for the therapy services and the portion that is the beneficiary’s responsibility. For Original Medicare, this will reflect the 20% coinsurance after the Part B deductible has been met. For Medicare Advantage plans, it will show the applicable copayment or coinsurance as determined by the plan’s specific terms. Understanding these statements helps beneficiaries track their healthcare spending and verify that the services billed align with the services received.