Key takeaways
- Medicare Part A covers occupational therapy for individuals admitted to a hospital or rehabilitation facility, while Part B covers medically necessary outpatient therapy.
- Occupational therapy helps individuals regain skills needed for daily living and work after an injury, illness, or disability. Therapists may recommend adaptive equipment for independent living.
- While there’s no annual limit on occupational therapy, Medicare may require confirmation of medical necessity from a healthcare professional once treatment costs reach a certain threshold.
When a person has been hospitalized, Medicare Part A covers eligible occupational therapy under its inpatient benefit.
If a person is not required to stay in a hospital, Medicare Part B covers occupational therapy costs.
Private insurance companies administer Medicare Advantage (Part C) plans, but, as a minimum, they must cover the same services as Original Medicare. Often, Medicare Advantage plans include additional benefits.
In this article, we discuss occupational therapy and which parts of Medicare cover it.
Medicare resources
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Medicare coverage for occupational therapy can come from different parts of the plan, depending on the treatment setting.
Part A
Medicare Part A covers medically necessary therapeutic care that a person may need when admitted to a hospital or rehabilitation facility.
The Part A deductible may apply, and in 2025, this amount is $1,676 per benefit period.
Glossary of Medicare terms
- Out-of-pocket cost: This is the amount a person must pay for care when Medicare does not pay the total amount or offer coverage. Costs can include deductibles, coinsurance, copayments, and premiums.
- Premium: This is the amount of money someone pays each month for Medicare coverage.
- Deductible: This is an annual amount a person must spend out of pocket within a certain period before Medicare starts to fund their treatments.
- Coinsurance: This is the percentage of treatment costs that a person must self-fund. For Medicare Part B, coinsurance is 20%.
- Copayment: This is a fixed dollar amount a person with insurance pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Part B
Medicare Part B covers medically necessary therapy received outside of the hospital on an outpatient basis.
Medicare-approved costs and services are covered at 80% when received from an approved healthcare professional. A person must pay the remaining 20% out of pocket after paying the $257 deductible.
In both instances, the types of covered therapies include:
- physical therapy
- occupational therapy
- speech-language pathology
Medicare Advantage
If a person has a Medicare Advantage plan, general coverage will be the same as Original Medicare, but specific rules may differ depending on the type of policy.
It is usually necessary for a person to visit an in-network healthcare professional.
Occupational therapy (OT) is a form of treatment that helps people recover skills they may need for everyday life and work following an injury, illness, or if they have a disability.
An occupational therapist will often:
- complete a review to find a person’s current skill level and determine goals
- make a custom plan to improve a person’s overall strength
- measure a person’s progress to be sure goals are on track
The therapist will examine a person’s daily activities and establish a plan to help maintain and support independence. They often work with a person on strength and coordination.
For example, when a medical condition or injury affects the use of the small muscles in a person’s hand, OT can help the person regain control of cutlery, enabling freedom at mealtimes.
Therapists may also visit a person’s home to help find the right adaptive equipment required for greater independent living.
Some rules and exclusions apply to OT services.
Location
Eligible therapies should be received at the following locations:
- a therapist or doctor’s office
- an outpatient rehabilitation facility
- a skilled nursing facility (on an outpatient basis)
- a person’s home
When treatment is not medically necessary
A doctor or healthcare professional may sometimes recommend a therapy that is not medically necessary, and in these cases, Medicare does not cover the services.
If a treatment is not medically necessary, a provider must give a person an Advanced Beneficiary Notice of Noncoverage (ABN). This notice allows individuals to decide whether to pay for the service out of pocket.
Frequency or unauthorized treatment
A person’s doctor or therapist may recommend OT more often than Medicare allows. They may also recommend services that Medicare does not cover.
When this happens, a person may have to pay some or all of the cost.
Appeals
If Medicare denies coverage for a service, a person can appeal the decision.
When a person has Original Medicare, they must file the appeal within 120 days of receiving the Medicare Summary Notice.
The appeal process has five levels. If a person is denied on one level, they may escalate the appeal to the next level.
A person with a Medicare Advantage plan must appeal through the private insurance company that administers the policy.
Medicare uses medical facts to determine the medical necessity of services. A person can help the appeals process by gathering information from their therapist and medical professional to support their case.
No, there are no limits. Medicare used to limit the amount of OT a person could receive, but this rule was removed in 2018.
However, if the total therapy costs reach a certain amount, Medicare needs a medical professional to confirm that the therapy is medically necessary.
In 2025, Original Medicare covers up to:
- $2,410 for PT and SLP combined
- and $2,410 for OT alone
When the treatment costs reach or exceed these amounts, a medical professional must confirm that the care is medically necessary.
There may be out-of-pocket expenses associated with OT, but support options are available if needed.
- Part A deductible
- coinsurance
- copayment
- Part B excess charges
If a person has limited resources, they may be eligible for assistance from Medicaid or supplemental security income (SSI).
Medicaid is a joint federal and state program that helps with medical costs. It also has a spend-down program that lets a person subtract their medical expenses from their income to make them eligible for additional help.
SSI is a monthly benefit paid directly to a person’s bank account. It is not the same as Social Security retirement or disability benefits.
OT helps people regain independence and function using activities of daily living. Therapists may also recommend adaptive equipment to help a person at home.
Medicare Part A helps cover OT when a person is in the hospital. Medicare Part B pays for medically necessary therapy as an outpatient.
Medicare Advantage pays for services normally covered by Medicare parts A and B but may include additional benefits.
There is no limit on the amount of OT a person can receive in 1 year. However, Medicare places a $2,410 limit before a healthcare professional must confirm the therapy is still medically necessary.