Does Medicare Cover Physical Therapy?

Short answer: yes, and there's no cap. Medicare Part B covers medically necessary outpatient physical therapy, occupational therapy, and speech-language pathology. There's no limit on how much Medicare pays for medically necessary outpatient therapy in a calendar year. You pay 20% of the Medicare-approved amount after you meet the Part B deductible.

The "Therapy Cap" Myth

Medicare used to have a hard annual dollar cap on outpatient therapy. Congress repealed it: Section 50202 of the Bipartisan Budget Act of 2018 eliminated the therapy caps and their exceptions process. That repeal is why you may still hear about a "therapy cap" from older articles or from people who had therapy years ago — the term stuck around even though the hard cutoff didn't survive.

What Replaced the Cap: The KX Modifier Threshold

In place of the old hard cap, the law kept the former cap amounts as a documentation threshold. Once your combined billed amount for physical therapy and speech-language pathology services passes that threshold in a calendar year, your therapist adds a "KX modifier" to your claim — a confirmation that continued therapy is still medically necessary. For calendar year 2026, that KX modifier threshold is $2,480 for physical therapy and speech-language pathology combined, and a separate $2,480 for occupational therapy.

There's a second, higher threshold used for targeted medical review. For 2026, that threshold is $3,000 for physical therapy and speech-language pathology services combined. Crossing it doesn't mean your claim will automatically be reviewed — it just means claims above that level are eligible for targeted review, and not every claim gets pulled.

For you as a patient, neither threshold changes what you pay or whether Medicare keeps covering your care. They're billing and documentation rules for your provider, not a stopping point for your treatment.

What You Pay

Outpatient physical therapy is covered under Medicare Part B. Before Medicare pays its share, you pay the annual Part B deductible — $283 for 2026. After that, you pay 20% of the Medicare-approved amount for each covered therapy visit, with no upper limit on the number of visits or the total amount, as long as the care remains medically necessary.

A doctor or other qualified provider must certify that the therapy is medically necessary, and the plan of care must be reviewed periodically. If you're in a Medicare Advantage plan instead of Original Medicare, your plan must cover at least what Original Medicare covers, but it may require prior authorization or use of network therapy providers — see how prior authorization works before you start a course of therapy.

Where Else Therapy Shows Up

Physical therapy isn't only an outpatient Part B service. If you're recovering after a hospital stay, therapy may be part of care in a skilled nursing facility under Part A, or part of a home health episode if you're homebound and qualify. Those settings have their own qualifying rules and cost-sharing — this page covers outpatient therapy billed under Part B, which is the setting most people mean when they ask "does Medicare cover physical therapy."

Common Questions