Medicare Coverage for Physical Therapy: No Visit Limit, But Rules That Trip People Up

For years, a frustrating therapy cap limited how much Medicare would pay for outpatient physical therapy, occupational therapy, and speech-language pathology services each year. Congress repealed that cap in 2018. Today, Medicare covers medically necessary outpatient therapy with no annual visit limit. But the absence of a visit cap does not mean unlimited, unconditional coverage. Coverage continues only when skilled care is medically necessary, and a landmark legal settlement changed what that means in ways many therapists and patients still do not fully understand.

Bryce's Take

The Jimmo settlement changed the landscape for PT coverage, and a lot of clients still do not know about it. Medicare cannot deny PT solely because you have plateaued or are not expected to improve. If you need skilled therapy to maintain function and prevent decline, that is a covered need. If your therapy is being denied and the appeal does not cite Jimmo, that is exactly where to start.

How Part B covers outpatient therapy

Medicare Part B covers outpatient physical therapy, occupational therapy, and speech-language pathology services when performed by a Medicare-enrolled therapist or therapy provider and when the services are medically necessary. After the Part B deductible, standard 80/20 cost-sharing applies. For patients receiving ongoing therapy, the 20% coinsurance without supplemental coverage adds up quickly. Medigap Plan G and N both cover the 20% Part B coinsurance for therapy services.

The 2018 cap repeal and what changed

Prior to 2018, Medicare imposed a combined annual cap on physical therapy and speech-language pathology services, and a separate cap on occupational therapy. These caps frequently ran out for patients with chronic conditions or those recovering from serious injuries or surgeries. Congress permanently repealed the caps in the Bipartisan Budget Act of 2018. Medicare now covers medically necessary outpatient therapy regardless of total annual cost, subject only to medical necessity documentation requirements and a prior authorization process for some high-cost cases.

The Jimmo v. Sebelius settlement and maintenance therapy

One of the most important but least understood developments in Medicare therapy coverage is the Jimmo v. Sebelius class action settlement of 2013. Prior to Jimmo, Medicare contractors routinely denied therapy claims for patients who were not expected to improve, arguing that if a patient had plateaued, therapy was no longer covered. The Jimmo settlement clarified that Medicare coverage does not require measurable improvement. Coverage is required when skilled therapy is necessary to maintain function or prevent or slow further decline, even without an expectation of improvement. This principle applies to physical therapy, occupational therapy, and speech-language pathology services.

What medical necessity documentation requires

Despite Jimmo, therapy coverage is not automatic or unlimited. Therapists must document what skilled care is being provided, why skilled care specifically is necessary (rather than unskilled caregiver assistance), and what the therapy goals are. For maintenance therapy under Jimmo, the documentation must establish why a skilled therapist, rather than a trained caregiver, is required to provide or supervise the services. Inadequate documentation, not improvement expectations, is the most common reason therapy claims are denied or audited.

Prior authorization for physical therapy

CMS implemented a targeted prior authorization program for outpatient therapy in certain states, initially in a pilot and then expanding. The program requires advance approval for therapy episodes that exceed a certain cost threshold. When prior authorization is required, your therapist or therapy provider initiates the request. Your physician may need to provide supporting clinical documentation. The prior authorization requirement is aimed at reducing unnecessary high-cost therapy, not at blocking medically necessary care. If prior authorization is denied, standard appeal rights apply.

Medicare Advantage and therapy coverage

Medicare Advantage plans must cover outpatient therapy to the same extent as Original Medicare, but they may impose prior authorization requirements that Original Medicare does not require, and some plans have network restrictions that limit which therapists you can see at the lower in-network cost. If you have an Advantage plan, verify that your preferred therapist is in-network before beginning treatment. Some Advantage plans also offer supplemental therapy benefits beyond Original Medicare's coverage.

Bryce Casson

Licensed Independent Medicare Broker

Bryce Casson is an independent Medicare insurance broker who works with every major carrier. He does not represent any single insurer, which means his recommendations are based on what actually fits each client's situation, not on commissions or quotas.