Medicare physical therapy and outpatient rehabilitation are covered under Part B when a doctor orders them and they are medically necessary. After meeting the annual Part B deductible of $283, you pay 20% coinsurance on the Medicare-approved amount for each session. There is no lifetime dollar cap on covered therapy, but there is a threshold system that determines how claims are reviewed, and knowing how it works can prevent a denial.
What Medicare Part B covers
Medicare Part B covers three categories of outpatient therapy when a physician or other qualified practitioner orders the services and they are medically necessary:
- Physical therapy (PT): evaluation and treatment for mobility, strength, pain, and functional limitations.
- Occupational therapy (OT): evaluation and treatment to help you perform daily activities after illness, injury, or disability.
- Speech-language pathology (SLP): evaluation and treatment for swallowing disorders, language difficulties, and voice and cognitive-communication problems.
Coverage applies whether you receive services in a private outpatient therapy office, a hospital outpatient department, a skilled nursing facility (on an outpatient basis), or in your home through a home health agency. The setting determines which Medicare billing rules apply, but the core benefit is Part B in each case.
Medicare Advantage (Part C) plans must cover all medically necessary PT, OT, and SLP services that Original Medicare would cover. Individual plans may require prior authorization before certain therapy services; check your plan's Evidence of Coverage before beginning a new course of treatment.
What you pay in 2026
Part B covers therapy services at 80% of the Medicare-approved amount after you meet the annual deductible. You pay the remaining 20% coinsurance.
| Cost element | 2026 amount | Notes |
|---|---|---|
| Part B annual deductible | $283 | Applies to all Part B services; once met, covered for the rest of the calendar year |
| Your share per covered visit | 20% of Medicare-approved amount | After deductible; Medicare pays 80% |
| KX modifier threshold (PT + SLP combined) | $2,480 | Above this, KX modifier required on each claim |
| KX modifier threshold (OT) | $2,480 | Separate threshold tracked independently from PT + SLP |
| Targeted medical review threshold | $3,000 | Claims above this are subject to targeted review through at least CY2027 |
If you have a Medigap (Medicare Supplement) policy, it generally covers the 20% coinsurance you would otherwise owe. If you are in a Medicare Advantage plan, your plan's cost-sharing structure applies instead of the 20% coinsurance.
The KX modifier: what it is and why it matters
Before 2018, Medicare imposed hard annual dollar caps on outpatient therapy. The Bipartisan Budget Act of 2018 repealed those caps. In their place, Congress established a threshold and attestation system using the KX modifier, a billing code a therapist appends to a claim to attest that services above a certain dollar amount remain medically necessary.
How the threshold works in practice:
For 2026, the threshold is $2,480 for the combined total of PT and SLP services for a single beneficiary. A separate $2,480 threshold applies to OT services. Medicare tracks spending separately for the PT-plus-SLP pool and the OT pool.
Once your combined PT and SLP therapy charges reach $2,480 in a calendar year, your treating therapist must add the KX modifier to every subsequent claim. The modifier is a formal attestation that:
- The therapist has assessed you and determined continued therapy is medically necessary.
- That determination is documented in your medical record.
Without the KX modifier on claims above the threshold, Medicare's system automatically denies the claim. This is not a judgment call; it is an automated processing rule. If your therapist omits the modifier on a claim above the threshold, that specific claim will not pay, even if the therapy itself is genuinely medically necessary.
What to do: If you are approaching or have exceeded $2,480 in combined PT and SLP charges, confirm with your therapist that they are tracking your total and will attach the KX modifier to each claim going forward. Ask to see that it is reflected in your Explanation of Benefits (EOB) from Medicare.
The medical review threshold
At $3,000 in combined therapy spending per category, claims become subject to targeted medical review. A Medicare contractor may request documentation from the treating therapist to verify medical necessity before payment is approved. This threshold is set at $3,000 through CY2027, per CMS guidance on therapy services.
Targeted review does not mean the therapy is denied. It means that a Medicare contractor is more likely to audit a specific claim or request supporting records. The practical implication for patients is the same as above: make sure your therapist is maintaining thorough notes documenting medical necessity at each visit, and that the KX modifier is on every claim above $2,480.
No lifetime cap on medically necessary therapy
This is worth stating plainly: Medicare does not limit how much therapy it will pay for over your lifetime as long as the therapy remains medically necessary. The old lifetime caps were a source of significant hardship for beneficiaries with chronic or degenerative conditions who needed ongoing therapy. The 2018 repeal eliminated those limits.
What Medicare does require is that each course of therapy be ordered by a physician or qualified practitioner and that the services remain medically necessary throughout treatment. If a physician determines that a patient has plateaued and further therapy is not likely to produce improvement or maintain function, coverage may end. But the dollar amount you have spent in prior years has no bearing on whether coverage applies.
Medicare Advantage and therapy coverage
Medicare Advantage plans are required to cover PT, OT, and SLP when those services would be covered by Original Medicare. However, most MA plans require prior authorization before approving a new course of treatment or continuing treatment beyond a set number of visits. Failure to obtain prior authorization can result in a denied claim even when the therapy is medically necessary.
Under the Original Medicare vs. Medicare Advantage comparison guide, one key difference is that Original Medicare generally does not require prior authorization for outpatient therapy, while nearly all MA plans do. If you are in a Medicare Advantage plan and your therapy requests have been denied or limited, you have the right to appeal. Ask your plan for its formal appeals process.
Frequently asked questions
Yes. If you are homebound and a physician orders skilled therapy services, Medicare covers home health physical, occupational, and speech therapy under the Part A or Part B home health benefit. The KX modifier threshold and medical review rules described above apply to outpatient therapy; home health therapy follows separate coverage rules under the home health benefit.
The claim will be automatically denied by Medicare's processing system once your combined PT and SLP charges exceed $2,480 (or OT charges exceed $2,480). You should not be billed for the full cost as a result of a billing error your therapist makes. Contact your therapist's billing department to correct the claim and refile it with the KX modifier attached.
Yes. Following the Jimmo v. Sebelius settlement, Medicare's coverage standard is medical necessity, not a requirement that you demonstrate measurable improvement. If therapy is needed to maintain your current level of function or to prevent decline, it can still be covered. Your therapist must document medical necessity in the chart.
There is no visit limit for medically necessary therapy. The KX modifier system replaced the old per-year dollar caps. As long as your physician orders the therapy and your therapist documents medical necessity, coverage can continue. High-cost cases (above $3,000) are subject to targeted review, but that is a documentation check, not a cap.
Learn More
- Medicare explained: Parts A, B, C, and D
- What Medicare doesn't cover
- Original Medicare vs. Medicare Advantage: which is right for you
Find personalized help understanding your Medicare therapy benefits at brevy.com.
The information on Brevy.com is for educational purposes only and is not a substitute for professional legal, financial, or medical advice. Rules vary by state and program and change frequently. Always verify with the relevant agency or a qualified professional. Brevy is not a law firm, financial advisor, or healthcare provider.