Medicare Physical Therapy Coverage: 2026 Costs and Limits

Yes, Medicare covers physical therapy - but the rules, costs, and limits depend on where you receive that therapy. Outpatient physical therapy visits with a private clinic fall under Medicare Part B, while therapy you receive during a hospital stay, skilled nursing facility stay, or home health episode is covered under Part A or Part B under different rules.

This guide covers every setting where Medicare pays for physical therapy in 2026, what you pay out of pocket, the threshold that replaced the old annual cap, and the landmark court ruling that extended coverage to patients who need therapy to maintain function - not just improve it.

How Medicare Covers Outpatient Physical Therapy

Most physical therapy in the United States is delivered in outpatient settings: private therapy clinics, hospital outpatient departments, doctor offices, and therapy groups. All of this falls under Medicare Part B.

What Part B Covers

Medicare Part B covers outpatient physical therapy that is:

• Medically necessary - ordered by a physician or other qualified provider based on your diagnosis
• Reasonable in amount - the number and frequency of visits must be consistent with accepted standards of care
• Provided by a Medicare-enrolled therapist - the therapist or therapy practice must be enrolled in Medicare

Covered services include individual and group physical therapy sessions, manual therapy techniques, therapeutic exercise, neuromuscular re-education, gait training, and the use of modalities (ultrasound, electrical stimulation) as part of a treatment plan.

You Need a Doctor’s Order

Before starting outpatient physical therapy, you must have a plan of care certified by a physician, nurse practitioner, clinical nurse specialist, or physician assistant. The ordering provider must be enrolled in Medicare - you cannot self-refer to physical therapy under Original Medicare the way you sometimes can under private insurance.

The therapist must review and implement the plan, and the certifying provider must re-certify the plan at regular intervals (generally every 90 days, or at the end of each certification period). If your certification lapses, Medicare will not pay for the visits.

Your Cost-Sharing in 2026

Once you have a valid plan of care, outpatient physical therapy falls under standard Part B cost-sharing:

The deductible is shared across all Part B services in the calendar year - you don’t have a separate deductible for physical therapy. If you’ve already met your Part B deductible through other services (a doctor visit, lab test, etc.), your next physical therapy visit costs only 20%.

There is no limit on the number of outpatient therapy visits Medicare will cover in a year, as long as treatment is medically necessary and properly documented. The old therapy caps - which limited coverage to $2,110 per year for physical therapy and speech-language pathology combined - were permanently eliminated by Congress in 2018.

The KX Modifier Threshold

Although annual caps no longer exist, Congress created a substitute mechanism when it eliminated them: the KX modifier threshold. In 2026, this threshold is approximately $2,410 for physical therapy and speech-language pathology services combined, and a separate $2,410 for occupational therapy (see the next section).

When your therapy costs cross this threshold during the calendar year, your therapist must add a “KX modifier” to each claim. The KX modifier is the therapist’s attestation that:

1. Your therapy is medically necessary
2. The services are reasonable and necessary in type, amount, and frequency
3. The additional services are consistent with your plan of care

This is mostly a paperwork requirement - not a coverage denial. If the KX modifier is correctly attached to claims, Medicare continues to pay 80% above the threshold. However, if a therapist forgets to attach the modifier or cannot certify medical necessity, those claims will be denied.

Targeted medical review. For very high therapy utilization - claims that significantly exceed the KX threshold - Medicare reserves the right to conduct a targeted medical review. Contractors may request documentation and can deny payment for sessions that aren’t adequately documented as medically necessary. This affects a small fraction of beneficiaries, but it’s a reason therapists must keep thorough documentation throughout care.

The exact KX modifier threshold adjusts slightly each year based on a market basket update. Check Medicare.gov for the current year’s figure.

The Maintenance Therapy Rule (Jimmo v. Sebelius)

One of the most important and least-understood rules in Medicare therapy coverage is the maintenance therapy standard established by the Jimmo v. Sebelius class action settlement in 2013.

Before that settlement, Medicare contractors routinely denied therapy claims on the grounds that the patient was not expected to improve - a position sometimes called the “improvement standard.” A patient with Parkinson’s disease, MS, ALS, or severe arthritis who needed regular therapy just to maintain current function and prevent decline could be denied simply because they weren’t getting better.

The Jimmo settlement - enforced by a federal court and backed by a 2014 CMS clarification transmittal - established that:

Medicare covers therapy services that are necessary to maintain a patient’s current level of function or to prevent or slow decline, even when no improvement is expected.

What matters is whether the patient requires the skill and expertise of a qualified therapist to safely deliver and monitor the care - not whether the patient is improving. A person with Parkinson’s disease who needs regular gait training and fall-prevention therapy to remain safely ambulatory qualifies. A patient who had a stroke and needs ongoing skilled therapy to prevent secondary contractures qualifies. A patient with advanced ALS who needs respiratory therapy and positioning services to prevent complications qualifies.

The critical distinction is that the care must require the clinical judgment and skill of a licensed therapist - it cannot be care that a caregiver or the patient could safely perform independently after instruction.

In practice, Medicare contractors do not always follow the Jimmo standard correctly, and denials still occur. If your therapy is denied on an improvement rationale, you have the right to appeal. Ask your therapist to document why skilled services are required and to write an appeal letter specifically citing the Jimmo settlement.

Physical Therapy During a Hospital Stay (Part A)

When you are formally admitted to a hospital as an inpatient, physical therapy during that stay is covered under Medicare Part A as part of your inpatient benefit - not Part B. You don’t pay separately for therapy on top of the hospital cost-sharing; it’s included in what Part A covers for the stay.

Part A cost-sharing for inpatient hospital care in 2026:

The therapy you receive as an inpatient - physical, occupational, and speech - is bundled into this cost structure. You don’t receive a separate Part B bill for it.

For the full inpatient benefit including observation status rules, see the Medicare Part A coverage guide.

Physical Therapy in a Skilled Nursing Facility (Part A)

If you are transferred to a skilled nursing facility (SNF) after a qualifying hospital stay - typically for post-acute rehabilitation after joint replacement surgery, stroke, hip fracture, or major illness - the physical therapy you receive there is covered under Part A.

The SNF benefit in 2026:

Physical, occupational, and speech therapy provided by the SNF during days 1-100 is included in this structure - there’s no separate Part B bill for it.

One common source of confusion: some patients enter SNF care specifically for intense rehabilitation therapy (two to three hours per day, often called “subacute rehab”). This is still covered under the same Part A SNF benefit as custodial nursing home care. The level of therapy intensity doesn’t change the cost structure - only which days of the benefit period you’re in changes your daily rate.

Home Health Physical Therapy (Part A and B)

If you are homebound - meaning leaving home requires considerable effort or is medically inadvisable - and you need skilled care, Medicare covers physical therapy provided by a home health agency at $0 copay.

Home health physical therapy is covered when:

• A doctor certifies you as homebound and orders a plan of care
• The therapy is medically necessary
• The home health agency is Medicare-certified

“Homebound” doesn’t mean bedbound. People who use a cane, walker, or wheelchair, who have a condition that makes leaving home taxing, or who have been advised not to leave home can qualify. The standard is that leaving home requires a “considerable and taxing effort.”

Home health therapy is not subject to the Part B deductible or coinsurance - it’s free to eligible beneficiaries. And unlike outpatient therapy, home health visits are not subject to the KX modifier threshold. There is no dollar limit on Medicare-covered home health episodes as long as you remain homebound and need skilled care.

The catch: once you no longer need skilled care and can safely travel to an outpatient clinic, home health coverage ends. Medicare will not continue paying for home health visits simply because you find it more convenient than going to a clinic.

Occupational Therapy Coverage

Medicare covers occupational therapy (OT) under the same rules as physical therapy, with one key difference: the KX modifier threshold for OT is calculated separately from the PT + speech-language pathology threshold. In 2026, OT has its own approximately $2,410 threshold before the KX modifier is required.

OT under Part B covers:

• Activities of daily living (ADL) training - dressing, bathing, grooming, meal preparation
• Adaptive equipment training (grab bars, dressing aids, adaptive utensils)
• Home safety assessments
• Cognitive rehabilitation after stroke or brain injury
• Upper extremity rehabilitation after injury or surgery
• Energy conservation techniques for people with COPD, heart disease, or MS
• Splinting and hand therapy

The same doctor’s order requirement, 20% coinsurance, and Jimmo maintenance therapy standard apply to OT as to PT.

Speech-Language Pathology Coverage

Speech-language pathology (SLP) - sometimes called speech therapy - is also covered under Part B with the same rules, and its costs are combined with PT costs toward the shared KX modifier threshold (not with OT).

Medicare-covered speech-language pathology services include:

• Speech and language disorders following stroke, brain injury, or neurological disease
• Swallowing disorders (dysphagia) - a frequent concern after stroke, Parkinson’s, and head/neck cancer
• Voice disorders
• Cognitive communication disorders
• Fluency disorders

Dysphagia treatment is among the most commonly covered SLP services under Medicare. Swallowing difficulties affect a large proportion of elderly patients after hospitalization or with progressive neurological conditions.

What Medicare Does NOT Cover

While Medicare’s therapy coverage is broad, some services are not covered:

• Unskilled care - exercises you can perform independently after instruction, without therapist supervision, are not covered once you’ve been trained
• Services not requiring professional skill - hot/cold packs applied without skilled assessment, basic strengthening that doesn’t require clinical monitoring
• Gym memberships and wellness programs - general exercise or wellness programs are not Medicare-covered PT, even if recommended by a physician (though some Medicare Advantage plans offer Silver Sneakers or similar fitness benefits)
• Yoga, Pilates, and fitness classes - not covered regardless of whether a physician recommends them
• Chiropractic manipulation beyond spinal subluxation - Medicare Part B covers chiropractic manipulation of the spine for subluxation, but not other chiropractic services or massage

Medicare Advantage Physical Therapy

Medicare Advantage (Part C) plans must cover all services that Original Medicare covers, including physical therapy. However, the specifics vary:

• Prior authorization - most Advantage plans require prior authorization before approving a course of physical therapy. Original Medicare does not. If you have an Advantage plan, contact your plan before starting treatment to understand their authorization process.
• Network restrictions - HMO-type Advantage plans require you to use in-network therapists. PPO plans allow out-of-network care but often at higher cost.
• Different cost-sharing - your copays or coinsurance may differ from Original Medicare’s 20% (could be lower or higher depending on the plan).
• Fitness benefits - many Advantage plans include gym membership benefits (such as Silver Sneakers) that go beyond what Original Medicare offers.

If you’re on an Advantage plan and need physical therapy, always start with your plan’s authorization process and network directory. Getting care from an out-of-network provider without authorization can result in denied claims. For a comparison of how Original Medicare and Advantage plans handle cost-sharing, see Medicare Advantage vs. Original Medicare.

Controlling Your Physical Therapy Costs

Physical therapy’s 20% coinsurance with no out-of-pocket maximum can add up. If you need extended or intensive rehab - recovering from a joint replacement, stroke, or serious injury - the costs can be substantial. Three options reduce this exposure:

Medigap Supplement Plans

A Medigap policy supplements Original Medicare and typically covers the Part B 20% coinsurance. Plan G (the most comprehensive plan available to new enrollees) covers the 20% for all Part B services including outpatient therapy after you’ve met the annual Part B deductible. Plan N covers the 20% with a $20 copay per office visit.

With a Medigap Plan G, your outpatient physical therapy cost after the $283 deductible is $0 - Medicare and Medigap together cover 100%. For anyone who anticipates significant therapy needs, Medigap’s predictable cost structure is a major advantage over the open-ended 20% exposure.

Medicare Savings Programs

Beneficiaries with limited income and assets may qualify for a Medicare Savings Program that pays Part B cost-sharing. The Qualified Medicare Beneficiary (QMB) program, for example, pays both the Part B deductible and the 20% coinsurance - including for outpatient physical therapy. Providers enrolled in the program cannot bill QMB beneficiaries for these costs.

Choosing the Right Setting

When medically appropriate, home health therapy (when you’re homebound) is free to you - there’s no deductible or coinsurance. If you qualify as homebound, asking your doctor about a home health order can eliminate out-of-pocket therapy costs entirely during the homebound period.

Getting Started with Medicare-Covered Physical Therapy

If your doctor recommends physical therapy:

1. Confirm the provider accepts Medicare assignment - ask before your first appointment. A therapist who does not accept Medicare assignment can charge up to 15% above the Medicare-approved amount on top of your 20% coinsurance.
2. Verify your plan of care is certified - the certifying physician or other qualified provider must be enrolled in Medicare.
3. Track your therapy spending - your therapist and insurance carrier will track the KX modifier threshold. Ask your therapist if you are approaching the threshold so there are no administrative surprises.
4. Keep your Medicare Summary Notice (MSN) - your MSN shows each covered service, the Medicare-approved amount, what Medicare paid, and what you owe. Review it after each course of treatment.
5. Appeal denials - if Medicare denies a therapy claim, you have the right to appeal. Ask your therapist to document medical necessity thoroughly and file an appeal citing the Jimmo settlement if the denial is based on lack of expected improvement.

Sources

• CMS: Medicare Benefit Policy Manual, Chapter 15 - Covered Medical and Other Health Services
• Medicare.gov: Physical therapy coverage
• CMS MLN: Jimmo v. Sebelius settlement agreement
• CMS: Therapy services KX modifier and caps
• Medicare.gov: How to appeal a Medicare decision