Medicare Coverage of Outpatient Rehabilitation Care

What It Is

Outpatient rehabilitative care

What's Covered

Medicare Part B covers a limited amount of rehabilitative care, which can include physical therapy, speech therapy, and/or occupational therapy, provided on an outpatient basis in a doctor's or therapist's office, rehabilitation facility, clinic, hospital outpatient department, or patient's home. The care must be prescribed and regularly reviewed by a doctor, and it must be provided by a Medicare-certified therapist.

Medicare Part A or Part B also covers outpatient rehabilitation as part of comprehensive in-home care provided by a Medicare-approved home healthcare agency.

If you have a Part C Medicare Advantage Plan: Payment limits and co-payments for Medicare Part C Medicare Advantage plans may be different than with Medicare Part B. To find out whether your plan has different payment limits or requires different co-payments for the services described above, contact the plan directly.

What Medicare Pays

Medicare Part B pays 80 percent of the Medicare-approved amount for covered physical therapy, speech therapy, or occupational therapy provided independently of home healthcare. There's a yearly cap of $1,840 on total Medicare payments for physical therapy and speech therapy combined, if thoser services are provided in any setting other than a hospital outpatient department. There's an additional $1,840 yearly cap for occupational therapy.

In exceptional circumstances, Medicare Part B may pay more than the yearly cap. But such extra therapy must be preapproved by Medicare based on a special written request submitted by the patient's physician.

If physical, speech, or occupational therapy is provided in a hospital outpatient department, there's no yearly cap on the total amount Medicare Part B may pay. However, there may be a per-visit patient co-payment in addition to the 20 percent of the Medicare-approved amount that Medicare doesn't pay.

Medicare Part A or Part B pays 100 percent of the cost for Medicare-covered home care provided by a home healthcare agency (including rehabilitative therapy). There's no yearly limit on the amount Medicare will pay for covered home care.

Important: Regardless of the rules regarding any particular type of care, in order for Medicare Part A, Medicare Part B, or a Medicare Part C plan to provide coverage, the care must meet two basic requirements:

  • The care must be "medically necessary." This means that it must be ordered or prescribed by a licensed physician or other authorized medical provider, and that Medicare (or a Medicare Part C plan) agrees that the care is necessary and proper. For help getting your care covered, see FAQ: How Can I Increase the Odds That Medicare Will Cover My Medical Service?

  • The care must be performed or delivered by a healthcare provider who participates in Medicare.

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