Medicare Physical Therapy: A Go-To Guide for Practitioners

Does Medicare cover physical therapy? This is a question that both patients and physical therapists often ask, as the Medicare program can be complex no matter your role in it.

The short answer is yes. Medicare does cover physical therapy, but as a physical therapist, there may be a multitude of other questions you have about Medicare physical therapy.

Whether you’re just getting started in your physical therapy career or just haven’t dealt with any Medicare patients yet, this guide covers some of the most burning questions physical therapists like you have about this important government program.

8 Key Questions Answered about Medicare Physical Therapy

1. What Is Medicare Physical Therapy?

Medicare physical therapy refers to physical therapy services that are covered by Medicare, a federal health insurance program primarily for people aged 65 and older, as well as some younger people with disabilities.  

Medicare covers medically necessary physical therapy services, which means that the services must be provided to diagnose or treat an illness or injury and must be performed by a qualified physical therapist.

Medicare Part B helps cover outpatient physical therapy services, while Medicare Part A helps cover inpatient physical therapy services. However, Medicare typically doesn’t cover the full cost of physical therapy, and patients may be responsible for paying a deductible and co-payment.

2. What Are the Requirements for Billing Medicare Physical Therapy?

Some basic requirements for you to bill Medicare for physical therapy services include:

• License and registration. You must be a licensed physical therapist in the state where you practice and registered with Medicare.
• National provider identifier (NPI). You must have an NPI number, which is a unique identification number assigned to healthcare providers.
• Physician referral. In most cases, you will need a physician’s referral or order for Medicare to cover your services. However, there are some exceptions, such as for Medicare Advantage plans.
• Plan of care. You must develop a written plan of care for each patient, outlining the goals of treatment, the types of services to be provided, and the expected duration of therapy.
• Documentation. You must maintain accurate and complete documentation of all services provided to Medicare patients, including the date of service, the type of service, the duration of service, and the patient’s progress.
• Coding and billing. You must use the appropriate Current Procedural Terminology (CPT) codes to bill for your services, and you must submit your claims to Medicare using the correct billing forms and procedures.

It’s  important to stay up to date on Medicare regulations and billing requirements, as they can change frequently. You may want to consult with a billing specialist or join a professional organization to get the latest information.

3. What Are the Different Medicare Parts and Their Impact On Physical Therapy Coverage?

Medicare has four parts: A, B, C, and D. Each part affects physical therapy coverage differently. Here’s a quick breakdown.

• Medicare Part A (hospital insurance) covers inpatient hospital stays, skilled nursing facility care, hospice care, and some home health care. It may cover physical therapy services if you are hospitalized or in a skilled nursing facility.
• Medicare Part B (medical insurance) covers outpatient medical services, including doctor visits, medical tests, and outpatient physical therapy. After meeting a patient’s annual deductible, Medicare typically pays 80% of the Medicare-approved amount for physical therapy services. The patient is responsible for the remaining 20%.
• Medicare Part C (aka Medicare Advantage) includes plans offered by private insurance companies and combine the coverage of Part A and Part B. These plans often offer additional benefits, such as vision, dental, and hearing coverage.
  • Coverage for physical therapy can vary between different Medicare Advantage plans. Some plans may have lower co-pays or deductibles than Original Medicare (which includes Parts A and B), while others may have stricter limits on the number of physical therapy sessions covered.
  • Medicare Advantage plans may also have narrower networks of providers than Original Medicare. This means that patients may need to see a physical therapist who is in-network with their plan to receive coverage.
• Medicare Part D (prescription drug coverage) helps cover the cost of prescription drugs. It does not directly affect physical therapy coverage.

Note that Medicare coverage for physical therapy can vary depending on the patient’s specific plan and circumstances. It’s always best for them to check with their insurance provider or a Medicare counselor to understand their exact coverage.

4. How Does Medicare Determine the Reimbursement Rates for Physical Therapy Services?

Medicare determines reimbursement rates for physical therapy services through a complex system involving factors such as:

• Resource-based relative value scale (RBRVS). This system assigns a value to each CPT code based on the resources required to provide the service, including physician work, practice expense, and malpractice expense. The value assigned to each code is then multiplied by a conversion factor to determine the payment rate.
• Geographic practice cost index (GPCI). This index adjusts the national payment rate to account for variations in practice costs across different geographic areas. Areas with higher costs of doing business will have a higher GPCI, resulting in higher reimbursement rates.
• Medicare physician fee schedule (MPFS). This is the official list of fees that Medicare pays for medical services, including physical therapy. The MPFS is updated annually to reflect changes in medical costs and practice expenses.
• Medicare physical therapy threshold. How many physical therapy sessions does Medicare cover? While there is no limit on sessions, Medicare does impose a threshold of $3,000 on the total amount it will pay for physical therapy services in a calendar year. Once the theshold is reached, additional services may not be covered or therapists may be required to submit additional documentation to justify any charges over $3,000. PTs should be tracking all charges over $3,000 with the KX modifier.
• Modifiers. Medicare considers the modifiers physical therapists use in conjunction with CPT codes which can impact reimbursement rates.

5. What Are Medicare’s Regulations for Telehealth Physical Therapy?

During the COVID-19 Public Health Emergency (PHE), Medicare expanded its coverage of telehealth services to include physical therapy. This expansion allowed physical therapists to bill Medicare for telehealth services provided to patients in their homes, as long as certain conditions were met.

PHE regulations were initially scheduled to end May 11, 2023. While many telehealth regulations  remain in place until September 30, 2025, the rules for telehealth physical therapy can be more restrictive. Make sure your clinic qualifies under these regulations to ensure you’re compliant through the deadline.

After the expiration of the current slate of telehealth regulations, most telehealth services will require the patient to be in a designated rural area. However, certain telehealth services, such as those for end-stage renal disease and acute stroke, may still be covered for patients in non-rural areas.

6. What Are the Common CPT Codes Used for Physical Therapy?

Some common CPT codes used to bill Medicare for physical therapy services include:

• 97110. Therapeutic exercises to develop strength, range of motion, endurance, and flexibility.
• 97112. Neuromuscular re-education for activities that facilitate movement, balance, coordination, kinesthetic sense, posture, and/or proprioception.
• 97116. Gait training to improve balance, coordination, and walking efficiency.
• 97140. Manual therapy for skilled hand movements, joint mobilization, and managing pain.
• 97530. Therapeutic activities to improve a patient’s functional performance through direct, one-on-one contact with a physical therapist.
• 97535. Self-care or home management training in activities of daily living and home management tasks, including teaching patients how to use assistive devices, meal preparation, and safety procedures.
• 97750. Physical performance test, which is a comprehensive and objective assessment of a patient’s abilities in various functional tasks such as balance, strength, and endurance.
• 97761. Prosthetic training for instructing in the use and care of prosthetic devices.

7. How Can Physical Therapists Stay Up to Date on Medicare Changes?

You can keep yourself abreast  of  the latest happenings in Medicare by:

• Joining professional organizations. Organizations like the American Physical Therapy Association (APTA) provide regular updates on Medicare changes and offer resources and advocacy on behalf of physical therapists.
• Attending conferences and workshops. These types of events often feature sessions on Medicare billing, coding, and regulatory updates.
• Subscribing to industry newsletters and publications. Many publications, such as ADVANCE for Physical Therapy & Rehab Medicine, provide regular updates on Medicare news and regulations.
• Checking the CMS website. The Centers for Medicare & Medicaid Services (CMS) website is the official source for Medicare information and regulations.
• Consulting with a billing specialist. A billing specialist can provide guidance on the latest Medicare billing and coding regulations.
• Networking with other physical therapists. Sharing information and experiences with professional peers can help you stay informed about changes in Medicare.

8. How Does Physical Therapy Differ Between Medicare and Private Insurance Patients?

When providing physical therapy services, there are a few key differences between patients who have Medicare and patients who have private insurance. See the table below for a summary of the distinctions.

Item	Medicare	Private Insurance
Coverage	Medicare typically covers medically necessary physical therapy services, but it may have specific requirements, such as physician referrals and prior authorizations.	Private insurance plans vary widely in their coverage for physical therapy. Some plans may have higher deductibles, co-payments, or limitations on the number of  covered visits.
Reimbursement rates	Medicare reimbursement rates are set by the government and can be lower than  private insurance companies.	Reimbursement rates for private insurance plans can vary depending on the specific plan and the provider network.
Documentation and billing	Medicare has specific documentation and billing requirements that physical therapists must follow to ensure proper reimbursement.	While documentation and billing requirements may vary by insurance plan, they are generally less stringent than Medicare.
Treatment plans	Medicare may have specific guidelines for the frequency and duration of physical therapy treatments.	Private insurance plans may have their own guidelines for treatment plans, but they are often more flexible than Medicare.
Out-of-pocket costs	Medicare patients may be responsible for co-payments and deductibles, as well as any costs that exceed the Medicare cap.	Out-of-pocket costs for private insurance patients can vary widely depending on the specific plan and the services provided.

You Can Master Medicare Physical Therapy

Medicare may be a complex federal healthcare program, but the above guide should help simplify most of its important aspects for your daily needs as a physical therapist. Just remember to keep accurate documentation, code correctly, obtain the proper physician referrals, and comply with relevant Medicare regulations. This way you’ll be sure to be properly reimbursed for your services.