Medicare Coverage for Physical Therapy

Physical therapy plays a vital role in helping people recover from surgeries, injuries, or manage chronic conditions with greater ease. It’s about restoring strength, mobility, and independence, and often helps improve quality of life by easing pain and speeding up recovery. For those who qualify, Medicare does provide coverage for physical therapy, but understanding how it works across the different parts of the program is key.

In this blog, we’ll walk through the specifics of how Medicare covers physical therapy, what costs to expect, and how to ensure you get the care you need—whether it’s in a hospital, outpatient clinic, or even through telehealth,

Medicare has four main parts Part A, Part B, Part C, and Part D each covering different aspects of healthcare. For physical therapy, Part A and Part B are the most relevant. Let’s break down the roles each of these parts plays.

Understanding Medicare Parts A and B for Physical Therapy

Medicare’s coverage of physical therapy is split primarily between Part A (inpatient services) and Part B (outpatient services), each with its own set of rules, cost structures, and eligibility requirements. Understanding the specifics of Medicare’s coverage options enables physical therapy clinics to guide their patients toward the best care options while minimizing financial surprises. Additionally, knowing the distinctions between Original Medicare and Medicare Advantage Plans allows clinics to help patients select the coverage that aligns with their therapy needs and financial circumstances.

Click here to watch a video on Get Started: Parts of Medicare by CMSHHSgov, the official YouTube channel for the Centers for Medicare & Medicaid Services (CMS) responsible for all Medicare, Medicaid, and CHIP information,  and learn more about Medicare Part.

Medicare Part A: Inpatient Physical Therapy

Medicare Part A covers inpatient hospital stays and services such as those received during hospitalization or in a skilled nursing facility (SNF). Physical therapy under Part A is typically included if it is necessary for recovery from a surgery or illness that requires a hospital stay.

• Skilled Nursing Facility (SNF) Coverage: After a patient is discharged from the hospital, Medicare may cover inpatient physical therapy at a skilled nursing facility (SNF). This coverage starts after a three-day hospital stay, with full payment provided for the first 20 days of therapy. From days 21-100, the patient is responsible for a daily copayment, after which Medicare no longer covers the therapy costs.

Medicare Part B: Outpatient Physical Therapy

Medicare Part B covers most outpatient physical therapy services, including therapy provided at outpatient clinics, in a doctor's office, or even at home if the patient qualifies for home health services. Part B is commonly used for patients requiring long-term therapy or rehabilitation outside of a hospital setting.

• Clinic-Based Physical Therapy: Outpatient therapy under Medicare Part B is commonly utilized for patients recovering from injuries or managing chronic conditions. After meeting the annual deductible, Medicare covers 80% of approved costs,  leaving the patient responsible for a 20% coinsurance.

Medicare Part C: Medicare Advantage

Medicare Part C, also known as Medicare Advantage, is offered by private insurance companies and must provide the same coverage as Original Medicare (Parts A and B). However, Medicare Advantage plans often include additional benefits like vision, dental, and fitness programs. Part C typically operates within a network of providers, meaning patients need to confirm that their physical therapy provider is in-network to avoid extra costs. Although Medicare Advantage covers physical therapy, it differs from Original Medicare by including these additional benefits and network restrictions.

Medicare Part D: Prescription Drug Coverage

Medicare Part D provides coverage for prescription drugs. It helps patients manage the costs of medications that may be necessary alongside physical therapy, such as pain management or other treatments related to their rehabilitation. However, Part D does not cover physical therapy services directly but may complement therapy by covering medication needs.

When it comes to understanding Medicare’s impact on physical therapy, it’s essential to focus on the right parts. While Medicare Part C and Part D offer valuable benefits, they don't directly relate to physical therapy services. Instead, the real support comes from Parts A and B, which cover inpatient and outpatient therapy needs. Therefore, this blog will focus on how Parts A and B apply to physical therapy, as they are the most relevant to clinics and patients in this context.

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Now that we’ve covered the basics of how Medicare Parts A and B cover physical therapy let’s dive into the costs associated with these services and how deductibles and coinsurance work.

Coinsurance, Copayments, and Deductibles in Medicare Physical Therapy Coverage

While Medicare helps lower the cost of physical therapy services, there are still some out-of-pocket expenses. These costs vary depending on whether the patient is covered under Part A or Part B.

Part A: Hospital and Skilled Nursing Facility Costs

In 2024, the deductible for Part A (inpatient services) is $1,632 per benefit period, which covers hospital stays of up to 60 days. For longer stays, the patient will be responsible for daily coinsurance costs. If physical therapy is part of a hospital stay or if therapy continues in a skilled nursing facility (SNF), the same coinsurance rules apply. For instance:

• Days 1-60 in a hospital or SNF: Covered fully after the deductible is met.
• Days 61-90: Coinsurance of $400 per day​.

Part B: Outpatient Physical Therapy Costs

For outpatient therapy, patients will need to meet the Part B deductible, which is $240 in 2024. As we have already discussed above, after meeting this deductible, Medicare covers 80% of the costs, leaving the patients responsible for 20% coinsurance on each therapy session. This structure ensures affordable therapy access but still requires budget planning for continued care.

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Now that we’ve looked at the financial aspects of Medicare coverage, it’s time to explore the differences between Original Medicare and Medicare Advantage.

Differences Between Original Medicare and Medicare Advantage for Physical Therapy

Original Medicare (Parts A and B) and Medicare Advantage (Part C) provide coverage for physical therapy, but the approach differs significantly between them. Understanding these differences is key when advising patients on the most appropriate option for their therapy needs. Here’s a table to explain it better:

Now that we’ve explored the differences between Original Medicare and Medicare Advantage let’s talk about coverage specifics in more detail.

Coverage Details of Medicare Parts A and B

Medicare Part A covers inpatient physical therapy services during hospital stays and in skilled nursing facilities, typically for up to 100 days following a hospital stay. On the other hand, Medicare Part B provides coverage for outpatient physical therapy, including therapy provided at clinics, private practices, and in-home services for eligible individuals, covering 80% of therapy costs after the annual deductible is met.

Medicare Part A: Inpatient Coverage

Medicare Part A provides coverage for physical therapy when it is part of an inpatient hospital stay or during rehabilitation at a skilled nursing facility (SNF). However, there are specific conditions that must be met for coverage to apply.

Hospital-Based Physical Therapy

If a patient is hospitalized following surgery, an injury, or a severe illness, Medicare Part A covers physical therapy as part of the recovery plan. This inpatient therapy helps patients regain strength, mobility, and function before being discharged. After the deductible is met, Medicare covers the full cost of the hospital stay for the first 60 days, making this a valuable benefit for those needing short-term, intensive rehabilitation.

Skilled Nursing Facility (SNF) Physical Therapy

After a patient is discharged from the hospital, further rehabilitation may be needed at a skilled nursing facility (SNF). Here are some facilities covered under SNF:

• Medicare Part A covers SNF physical therapy if the patient had a hospital stay of at least 3 consecutive days.
• First 20 days: 100% covered by Medicare.
• Days 21-100: Patient pays a daily copayment (~$200/day in 2024).
• After 100 days: Medicare coverage ends, and out-of-pocket costs apply unless other benefits qualify.
• Long-term care, like nursing home living or custodial care, is not covered unless it’s medically necessary rehabilitation.

Medicare Part B: Outpatient Coverage

Medicare Part B covers outpatient physical therapy, which is the primary option for individuals who require therapy without being admitted to a hospital or skilled nursing facility. These services can be delivered in a variety of settings, including outpatient clinics, rehabilitation centers, private practices, and even in-home therapy for eligible patients.

Clinic-Based Physical Therapy

Most patients rely on Medicare Part B for their physical therapy needs, particularly when therapy is part of an ongoing outpatient treatment plan. Whether the therapy is provided at an outpatient clinic, rehabilitation center, or hospital department, Medicare typically covers 80% of the approved costs, with patients responsible for the remaining 20% of coinsurance. This setup enables patients to access therapy as often as necessary without high upfront costs. However, before Medicare begins covering these expenses, the annual Part B deductible (set at $240 for 2024)​.

Outpatient physical therapy is commonly used for:

• Rehabilitation after surgeries (e.g., joint replacements)
• Recovery from injuries (e.g., fractures or sprains)
• Chronic condition management (e.g., arthritis, multiple sclerosis)

Home Health Physical Therapy

Medicare Part B also covers home health physical therapy for patients who are homebound and unable to attend therapy sessions in person. To qualify, a doctor must certify that the patient cannot leave home without considerable effort or assistance. In these cases, a licensed physical therapist can provide therapy at the patient’s home, and the services are fully covered under Part B after the deductible is met.

Home health therapy is especially beneficial for those recovering from major injuries or surgeries who need help regaining strength and mobility but are too weak to travel to a clinic.

Key Differences Between Part A and Part B Physical Therapy Coverage

To summarize:

• Medicare Part A covers inpatient physical therapy that occurs in hospitals or skilled nursing facilities. Coverage is time-limited and tied to hospital stays or specific qualifying conditions.
• Medicare Part B covers outpatient physical therapy services, including clinic-based sessions and home health therapy, with no specific time limits but requires cost-sharing through deductibles and coinsurance.

Understanding these differences helps clinics guide patients toward the most appropriate therapy services based on their needs. Part A is well-suited for short-term, intensive recovery in hospitals or skilled nursing facilities, while Part B offers more flexibility for ongoing outpatient rehabilitation.

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Now that we have a clearer understanding of the coverage specifics let’s move on to the eligibility requirements for Medicare-covered physical therapy.

Coverage Requirements and Eligibility for Medicare-Covered Physical Therapy

For Medicare to cover physical therapy, specific criteria must be met to ensure that the therapy is both medically necessary and appropriate for the patient’s condition. Medicare’s coverage is based on two key factors: the therapy must be medically necessary, and it must meet certification requirements.

Medical Necessity

Medicare covers physical therapy only when it is considered medically necessary, meaning the therapy must address a medical condition that affects the patient’s function or mobility. To meet this requirement, a licensed healthcare provider—usually a doctor or physical therapist—must confirm that the therapy is essential for treating the condition or preventing further deterioration. Here are the things that are included:

• Post-surgical recovery: Physical therapy helps patients regain mobility and strength after surgeries like knee or hip replacements.
• Injury rehabilitation: Therapy is often needed to restore function following injuries like fractures, sprains, or dislocations.
• Chronic conditions: Therapy may be used to manage conditions such as arthritis, stroke, or multiple sclerosis, preventing further deterioration in health​.

Medicare does not cover physical therapy services that are not needed to treat a medical condition. Therapy provided solely for general fitness, wellness, or convenience—such as exercise for staying fit or enhancing overall well-being—is not eligible for coverage. Additionally, suppose a patient reaches a point where further therapy will no longer lead to measurable improvement. In that case, Medicare may stop covering the therapy unless maintenance therapy is necessary to prevent deterioration.

Certification Requirements

A critical component of Medicare coverage is the requirement for certification by a healthcare provider. This certification process includes several key elements:

1. Initial Certification: A doctor or licensed physical therapist must certify that physical therapy is necessary. This certification confirms that the patient has a condition that requires skilled therapy, whether for recovery, rehabilitation, or maintaining current functional abilities​.
2. Plan of Care: Once the need for therapy is established, the healthcare provider must develop a comprehensive plan of care. This plan includes specific goals, the frequency and duration of therapy sessions, and the expected outcomes. The plan is designed to address the medical issue, improve functionality, and set achievable targets over time​.
3. Periodic Re-Evaluations: Medicare requires periodic re-evaluations to ensure that the therapy continues to meet the medical necessity criteria. Typically, the plan of care is re-evaluated every 90 days, but more frequent re-evaluations may be necessary depending on the patient’s progress. If the patient is not showing improvement or if therapy is no longer required, Medicare may stop covering the services​.

Medicare Improvement Standard Ruling

In the past, Medicare coverage for therapy was often denied if the patient was not expected to show measurable improvement. However, the Jimmo v. Sebelius settlement in 2013 changed this. Now, Medicare must cover maintenance therapy even if the patient is not expected to improve, provided the therapy is necessary to maintain current abilities or prevent deterioration. This ruling is particularly relevant for patients with chronic conditions like Parkinson's disease or multiple sclerosis, where the primary goal of therapy may be to stabilize the patient’s condition​.

Documentation and Compliance

Healthcare providers must meticulously document a patient's progress and compliance with the therapy plan to justify continued Medicare coverage. This includes maintaining detailed progress notes, records of the patient’s response to therapy, and any adjustments made to the treatment plan. If Medicare conducts an audit or requests further information, thorough documentation is essential to ensure coverage is upheld.

By following these documentation requirements, patients can continue receiving the necessary physical therapy while maintaining their Medicare coverage. Consistent communication with healthcare providers, regular assessments, and adherence to documentation guidelines are vital to ensuring ongoing eligibility for Medicare-covered therapy services.

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Now that we’ve discussed the eligibility requirements let’s shift our focus to the evolving landscape of telehealth and how it relates to Medicare’s physical therapy coverage.

Telehealth and Remote Physical Therapy Services

Telehealth physical therapy became more common during the COVID-19 pandemic, as Medicare temporarily expanded coverage for remote services. This allowed patients to receive therapy from home, particularly benefiting those in rural areas or with mobility challenges. While in-person therapy remains the preferred standard, telehealth offers flexibility and convenience. The future of Medicare's telehealth coverage is still uncertain, so clinics need to stay informed about any changes to these provisions.

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With the role of telehealth clarified, let’s move on to how you can find Medicare-approved physical therapy providers.

How to Become the Go-To Medicare Physical Therapy Provider

Becoming the go-to Medicare physical therapy provider requires more than just offering excellent care. It’s about understanding Medicare’s requirements, streamlining your processes, and building trust with patients who rely on these services for their recovery.

Medicare-Approved Providers

To ensure Medicare covers physical therapy services, it's essential to choose a provider that accepts Medicare assignments. This means the provider agrees to the Medicare-approved amount as full payment, leaving the patient responsible only for the standard coinsurance or deductible. Medicare’s provider search tool on Medicare.gov helps locate approved physical therapists, clinics, and hospitals in your area.

In addition to the online tool, patients can also ask their primary care physician or healthcare provider for referrals to Medicare-approved physical therapists or rehabilitation centers. This approach ensures coverage and helps connect patients with reputable providers suited to their needs.

In-Network vs. Out-of-Network Providers

If your clinic works with patients enrolled in the Medicare Advantage Plan (Part C), it's crucial to ensure that your facility is part of the plan's network. Medicare Advantage plans operate with specific networks of approved providers, much like private health insurance. Being an in-network provider can lead to lower coinsurance costs for your patients and ensure that a higher portion of their therapy is covered. If your clinic is out-of-network, patients may face significantly higher out-of-pocket costs, or in some cases, no coverage at all.

While out-of-network services might be covered in emergencies, for routine or planned physical therapy, it’s important to remain within the patient's plan network to avoid financial issues. Make sure to verify coverage details with the patient’s Medicare Advantage plan before scheduling therapy to confirm network rules and cost-sharing responsibilities.

Now that we know how to find the right provider, let’s wrap up with some frequently asked questions about Medicare physical therapy coverage.

Frequently Asked Questions (FAQs)

Question 1: Is a Referral Required for Physical Therapy Under Medicare?
Answer: Yes, Medicare requires a referral from a primary care doctor for physical therapy services. The doctor must also certify that the therapy is medically necessary as part of the patient's treatment plan.

Question 2: Is There a Limit on the Number of Physical Therapy Sessions?
Answer 2: Medicare does not impose a strict limit on the number of therapy sessions. However, therapy must continue to meet medical necessity standards, and documentation must be updated regularly​.

Question 3: What are Out-of-Pocket Costs?
Answer 3: For Part A in 2024, patients must meet a $1,632 deductible for hospital stays or skilled nursing facility care per benefit period. Once the deductible is met, Medicare fully covers the first 60 days of the hospital stay. Beyond that, a daily coinsurance of $400 applies for days 61-90.

For Part B, the 2024 annual deductible is $240. After meeting this deductible, Medicare covers 80% of the approved costs for outpatient physical therapy, with patients responsible for the remaining 20% of coinsurance.

Question 4: Is There a Therapy Cap?
Answer 4: Although Medicare no longer imposes a hard cap on the total cost of physical therapy services, there is a $2,150 threshold for combined physical and speech therapy services in 2024. Once this limit is reached, providers must confirm the medical necessity of continuing therapy to ensure ongoing coverage.

Now that we’ve addressed common questions, let’s take a look at why staying informed about your Medicare coverage is essential and how a tool like SPRYPT can streamline your clinic’s operations.

Conclusion: Ensuring Comprehensive Coverage and Streamlined Care

Understanding Medicare’s coverage for physical therapy, including the specifics of Parts A and B and associated costs, is essential for clinics aiming to provide seamless care to patients without financial surprises. The growing role of telehealth also expands access for patients who cannot attend in-person sessions, and future policy changes may further support these services.

For clinics aiming to improve efficiency, SPRYPT offers innovative solutions that simplify claim submissions, enhance insurance verification, and reduce administrative burdens. With features like automated claim submissions and denial management workflows, SPRYPT allows physical therapy providers to focus on delivering quality care while minimizing operational hassles.

If you’re ready to see how SPRYPT can improve your clinic’s efficiency and patient outcomes, schedule a demo today!