Medicare pays for inpatient and outpatient physical therapy services, but it does not cover the full cost. An individual will usually need to pay a deductible and copayment.
Physical therapy can help people regain movement and reduce pain and discomfort due to injuries, chronic conditions, or disabilities.
Although Medicare does not have a spending limit on physical therapy sessions, once the cost reaches $2,110, a person’s healthcare provider will need to indicate that their care is medically necessary before Medicare will continue coverage.
In this article, we explain when a person with Medicare may need physical therapy. We also discuss considerations to bear in mind when funding physical therapy sessions through Medicare.
We may use a few terms in this piece that can be helpful to understand when selecting the best insurance plan:
- Deductible: This is an annual amount that a person must spend out of pocket within a certain time period before an insurer starts to fund their treatments.
- Coinsurance: This is a percentage of a treatment cost that a person will need to self-fund. For Medicare Part B, this comes to 20%.
- Copayment: This is a fixed dollar amount that an insured person pays when receiving certain treatments. For Medicare, this usually applies to prescription drugs.
Medicare pays for physical therapy sessions in different ways:
- Under Medicare Part B for medically necessary outpatient physical therapy.
- Under Medicare Part A for inpatient physical therapy in the hospital or a skilled nursing facility after a hospital stay. Part A may also pay for physical therapy when a person is in hospice care.
- Under either Part A or Part B for physical therapy at home as part of home health services, if an individual meets the required conditions.
To obtain coverage, a person must meet their Part B deductible before Medicare funds any outpatient physical therapy. For 2021, the Part B deductible is $203. Once a person has met this out-of-pocket cost, they will pay 20% of the Medicare-approved amount for physical therapy.
As an example:
- A person’s doctor recommends 10 physical therapy sessions at $100 each.
- The individual has not paid their Part B deductible for the year.
- They will pay the Part B deductible of $203.
- Part B will pay 80% of the expense after the $203 deductible payment.
- The individual will pay the 20% remaining cost.
- After this, they will pay $159.40 for the remaining block of sessions.
For Part A, the deductible is $1,484 for the first 60 days of provided inpatient services. Between days 60 and 90, a person needs to pay a daily coinsurance fee of $371. From day 91, they will pay $742 daily for up to 60 days, after which Medicare will cover 100% of the cost.
A person needs to meet the deductible for each benefit period. The first 60 days of that stay or benefit period do not carry an additional coinsurance.
Medicare Advantage is a bundled Medicare plan that private insurance companies administer. This plan offers the same benefits as parts A, B, and, sometimes, Part D, which funds prescription drugs.
Medicare Advantage plans cover physical therapy in line with parts A and B. However, some Advantage plans may require a person to use services from physical therapy practices within an agreed network.
A person should contact their insurance company before selecting a physical therapy provider to confirm they are within the network.
A definitive treatment plan will need to be in place before Medicare agrees to cover a block of physical therapy sessions.
The program will also continually review whether the sessions are having the intended effect and whether an individual still medically requires the therapy. A physical therapist or physician will need to carry out this review and relay the information to Medicare.
The process of creating and maintaining a physical therapy plan may include the following steps:
- A physical therapist evaluates the person who needs physical therapy and creates a plan of care. This plan includes a recommended number of sessions, treatment types, and treatment goals. A physician then approves this plan of care.
- An individual then uses physical therapy services. During this time, a physical therapist regularly evaluates their progress.
- After completing the approved number of visits, a physical therapist and doctor will reevaluate the person’s plan. At this time, the therapist may release the individual from further physical therapy. Alternatively, the referring doctor may recommend additional sessions.
- A physical therapist and doctor will continue to reevaluate the plan until the person meets their treatment goals or would no longer benefit from physical therapy.
As part of this, Medicare requires that the physical therapist re-certify that physical therapy is medically necessary after the total costs for therapy exceed $2,110.
Here is an example:
- A person with Medicare was in a car accident and injured their knee.
- Their doctor recommended physical therapy to improve their strength and range of motion.
- The person participated in the recommended physical therapy sessions and improved strength but had not fully reached their mobility goals. The total physical therapy costs (what they and Medicare had paid) exceeded $2,110.
- The person meets with their physical therapist, who agrees they should continue therapy sessions to achieve their goals.
- The individual’s physical therapist — and possibly doctor — approves that continued medical services are necessary through paperwork they submit to Medicare.
When physical therapy services exceed , Medicare may require that a physical therapist and physician undergo a targeted medical review for therapy to make sure the billing for the cost of the therapy is appropriate, the provider is billing by the book, and the therapy is still medically necessary.
Medicare covers medically necessary physical therapy services. Coinsurances and deductibles apply to physical therapy under Medicare coverage.
If a person is not sure whether Medicare will cover their physical therapy, they can ask their provider before starting their course of treatment.
When an individual goes to a physical therapy session and expects to pay with Medicare, the physical therapy practice should issue them a notification if it is possible that Medicare will not cover the required physical therapy services. This helps a person minimize unexpected healthcare costs.