Good News: The Cap Is Gone
Medicare covers medically necessary physical therapy, and there's genuinely good news here: the hard dollar cap that used to limit how much therapy Medicare would pay for was eliminated. For years, there was an annual 'therapy cap' that cut off coverage after a certain dollar amount, forcing people to stop therapy or pay out of pocket mid-recovery. That cap no longer exists, replaced by a documentation process instead.
This matters for anyone recovering from surgery, an injury, a stroke, or managing a condition that requires ongoing therapy. Physical therapy — along with occupational and speech therapy — is covered under Part B as an outpatient service. Here's how it works now.
What's Covered and What You Pay
Medicare Part B covers outpatient physical therapy that's medically necessary — meaning it's needed to treat your condition and requires the skills of a licensed therapist. This includes therapy after surgery, injury rehabilitation, stroke recovery, and management of conditions affecting movement and function. You pay the standard 20% coinsurance after meeting your Part B deductible.
That 20% has no annual cap of its own, which is where a Medicare Supplement helps — it covers the coinsurance, so extensive therapy doesn't add up out of pocket. On a Medicare Advantage plan, therapy is covered with the plan's copays and may involve prior authorization or visit limits, so the details vary by plan.
What Replaced the Therapy Cap
Instead of a hard dollar cap, Medicare now uses a documentation threshold. Once your therapy costs pass a certain amount in a year, your therapist must add a confirmation that continued therapy is medically necessary — essentially attaching evidence to justify ongoing care. This isn't a cap; it's a checkpoint. As long as the therapy remains medically necessary and is documented, Medicare keeps covering it.
The practical effect is that legitimate, needed therapy continues to be covered no matter how much you need — a major improvement over the old cap that could cut off care mid-recovery. Your therapist handles the documentation; you just keep getting the care you need.
Getting the Most From Your Therapy Coverage
To use the benefit well: confirm your therapist accepts Medicare, understand that the 20% coinsurance applies (and that a supplement covers it), and know that coverage continues as long as therapy is medically necessary and documented. If you're on a Medicare Advantage plan, check for prior authorization requirements or visit limits before starting an extended course of therapy.
The therapy question is a real factor in the Medigap vs. Advantage decision for anyone facing a major surgery or ongoing rehab needs — Medigap's coverage of the coinsurance with no visit-limit hassles can be worth a lot during an intensive recovery. We help clients think through this based on their actual health situation, at no cost, so your coverage supports your recovery instead of complicating it.
Frequently Asked Questions
Does Medicare cover physical therapy?
Yes. Medicare Part B covers medically necessary outpatient physical therapy (as well as occupational and speech therapy). You pay 20% coinsurance after your Part B deductible, and there's no longer a hard dollar cap on coverage.
Is there a limit on how much physical therapy Medicare covers?
There's no hard dollar cap anymore. Once therapy costs pass a certain threshold, your therapist must document that continued therapy is medically necessary, but coverage continues as long as it remains necessary and documented.
How much does physical therapy cost with Medicare?
Under Original Medicare, you pay 20% coinsurance after the Part B deductible, with no annual cap on that coinsurance. A Medicare Supplement covers the 20%. Medicare Advantage plans use their own copays and may require prior authorization.
Do Medicare Advantage plans limit physical therapy?
They can. Medicare Advantage plans cover therapy but may impose copays, visit limits, or prior authorization requirements. If you expect to need extensive therapy, check the plan's rules before starting.
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