Does Medicare Cover Physical Therapy? Limits, Costs & Coverage Rules

Medicare does cover outpatient physical therapy (PT) under Part B, and inpatient physical therapy (PT) under Part A, and over 6 million Medicare beneficiaries receive outpatient PT each year. The biggest shift to Medicare's physical therapy coverage was the repeal of the previous "therapy cap" (an annual cap on the amount that Medicare paid for physical therapy) in the Bipartisan Budget Act of 2018. Medicare will pay for medically necessary physical therapy in 2026 without hard caps on the number of visits, with documentation requirements rising at specific visit caps. For combined services from the PT and speech-language pathologist (and separate claims for OT services), the 2026 KX modifier threshold is $2,480, for which claims above this amount must include a KX modifier to demonstrate medical necessity. The targeted medical review threshold will not change and will remain at $3,000 until 2028. Standard cost sharing applies: 20% coinsurance once the Part B deductible (2026) has been met. Most states have laws that permit a person to see a physical therapist without a doctor's referral, although some states may require certification by a physician for reimbursement under Medicare.

The purpose of this guide is to shed light on Medicare physical therapy coverage, costs, the KX threshold, and how to access physical therapy in 2026. Medicare.gov, the Centers for Medicare and Medicaid Services (CMS) and the American Physical Therapy Association (APTA) provide the information. 

Medicare Part B physical therapy coverage

If physical therapy is medically necessary, it is covered by Medicare Part B (outpatient). Coverage is provided in both hospital and non-hospital settings such as private practice, Physician Practices, hospital outpatient departments, outpatient rehabilitation, comprehensive outpatient rehabilitation facilities (CORFs), skilled nursing facilities (SNFs for Part B services), critical access hospitals and some home health agencies.

Physical therapy is covered by Medicare as long as it is reasonable and necessary for the treatment or prevention of any condition. The services have to be performed by a licensed physical therapist (not a less trained provider). The documentation should include clear treatment goals and progression with measurable objectives.

In most states (direct access laws), Medicare does not require a physician referral for Original Medicare PT. For Medicare reimbursement, the physician, physician assistant, nurse practitioner or clinical nurse specialist must certify the physical therapy plan of care within 30 days of beginning physical therapy. Such claims can be denied if this certification is not obtained.

These include post-surgical rehabilitation (knee replacement, hip replacement, rotator cuff repair, spinal surgery and others), stroke rehabilitation, recovery from major injuries, neurological and balance/fall prevention, chronic pain management, lymphedema treatment, vestibular rehabilitation, pelvic floor therapy, cardiac and pulmonary rehabilitation (when prescribed).

See our home health coverage guide for home health physical therapy. 

2026 KX modifier threshold explained

The KX modifier system is the new system of therapy from 2018, offering a flexible approach to medically necessary therapy. The 2026 KX modifier threshold for physical therapy (with speech-language pathology) is $2,480 and for occupational therapy is $2,480.

When the incurred charges for the PT and the SLP are greater than or equal to $2,480 in a calendar year, the claims for the additional services should contain the KX modifier. The provider's certification, provided with the proper documentation in the medical record, that the therapy is medically necessary and should continue is the KX modifier.

Importantly, when the $2,480 threshold is surpassed, it doesn't automatically deny claims and it is not a trigger for reviews. All it takes are the KX modifiers to claims and needed support for medical necessity. Claims with the KX modifier are paid as normal, claims without the KX modifier are denied.

This $2,480 is for each calendar year, not each benefit period or each condition. All services for multiple diagnoses within a year will count towards the same threshold.

The threshold is applicable to all settings. All Physical Therapy services from your local physical therapy office, hospital outpatient department and critical access hospital are counted toward the same annual threshold. If you are getting close to the threshold, keeping track of your running total may be significant.

The targeted medical review threshold will stay at $3,000 until 2028. Medical reviews do not occur automatically for claims over $3,000; they will be conducted based upon a trend or pattern identified by CMS contractors. If the claims are over $3,000, most are paid without being reviewed, although those with problematic claims might be subject to audits. 

Cost breakdown for physical therapy

If you have Original Medicare for physical therapy, here is how your 2026 physical therapy fees will be calculated. The Medicare Part B deductible is $283 annually before Medicare benefits begin. Once the deductible is met, you would be responsible for the 20% coinsurance of the Medicare-approved amount with Medicare covering the remaining 80%.

The typical Medicare approval for the number of PT sessions depends on the location and the CPT code, and the amount of each session is $80 – $150. Standard PT will then cost you $16-$30 per session for your 20% coinsurance.

For a 20-30 session course, Medicare allowed charges could be $1600 to $4500 and your coinsurance would be about $320-$900 (after the $283 deductible) up to the KX threshold.

Medigap supplement plans also pay the 20% coinsurability for physical therapy, which means that most of your out-of-pocket expenses are paid for, other than the Part B deductible.

Medicare Advantage plans must offer coverage that meets or exceeds the coverage the same as Original Medicare, but could have different cost sharing arrangements. Medicare Advantage PT copays usually run from $20-$50 per visit, and may have limits on the number of visit

When physical therapy is covered under Part A vs Part B

Medicare physical therapy coverage works under different Medicare parts depending on the care setting.

Part A covers physical therapy received as part of inpatient hospital care, skilled nursing facility care (days 1-20 free after deductible, $217/day for days 21-100), home health care when meeting homebound criteria, and inpatient rehabilitation facility (IRF) care for qualifying conditions.

Part B covers outpatient physical therapy in all other settings. The KX modifier threshold applies to Part B services only.

The transition between Part A and Part B coverage can affect cost-sharing significantly. A patient recovering from hip replacement might receive Part A-covered SNF physical therapy (with the SNF cost structure) for the first 20 days, then transition to Part B-covered outpatient PT (with 20% coinsurance and the KX threshold) after SNF discharge.

For broader rehabilitation coverage, home health PT under home health benefits can be valuable for patients who are homebound and need skilled care at home.

Direct access: seeing a physical therapist without a doctor's referral

In most states, direct access laws allow patients to see a physical therapist without first obtaining a physician's referral. Medicare doesn't require a referral to begin physical therapy in states with direct access.

However, for Medicare reimbursement, a physician, physician assistant, nurse practitioner, or clinical nurse specialist must certify the physical therapy plan of care within 30 days of the start of treatment. Most physical therapy practices handle this certification process by sending the plan of care to the patient's primary care physician for signature.

Without timely physician certification, Medicare claims for therapy services may be denied. Patients should ask their physical therapist about the certification process to ensure no coverage gaps.

Direct access doesn't apply uniformly across all states or all conditions. Some states limit direct access to specific diagnoses or duration of treatment. Verify your state's specific direct access laws before bypassing physician referral.

What's not covered by Medicare physical therapy

Several aspects of physical care fall outside Medicare coverage.

Maintenance therapy for general fitness or wellness without specific medical necessity isn't covered. Generic exercise programs that don't require skilled physical therapist expertise aren't covered, even when delivered in a clinical setting.

Massage therapy alone isn't covered unless it's part of a broader physical therapy plan of care delivered by a licensed physical therapist.

Cosmetic or elective treatments that aren't medically necessary aren't covered.

Group exercise classes (yoga, Pilates, group fitness) aren't covered, even if marketed as therapeutic.

Athletic training and sports performance enhancement aren't covered.

Treatment by providers not enrolled in Medicare or not accepting Medicare assignment may not be reimbursed.