What Medicare Covers for Outpatient Physical Therapy

How Medicare Part B pays for outpatient physical therapy in 2026: the deductible, 20% coinsurance, no annual cap, the KX threshold and what to ask a clinic.

Medicare is one of the largest payers for outpatient physical therapy, and its rules are often misunderstood. Some people still believe there is a yearly cap on therapy. Others are surprised by a bill for their share of the cost. This guide explains, in plain terms and with links to the official pages, what Original Medicare Part B covers, what you pay in 2026, how the old therapy cap was replaced, and what to do if a claim is denied.

What Part B covers

According to Medicare.gov, Part B (Medical Insurance) helps pay for medically necessary outpatient physical therapy if you are eligible. Medicare describes physical therapy as care that helps restore or improve movement after an injury, illness or surgery. It also says you can get therapy to help improve or maintain your current function, or to slow your rate of decline. In other words, coverage is not limited to people who are expected to improve.

To be covered, your doctor or another health care provider (a nurse practitioner, clinical nurse specialist or physician assistant) must certify that you need it. Federal rules require a written plan of treatment and a certified plan, renewed at least every 90 days while therapy continues. Our guide on seeing a physical therapist without a referral explains how that works in practice.

What you pay in 2026

Medicare.gov's Medicare costs page lists the 2026 Part B deductible as $283 a year. After you meet the deductible, the physical therapy page says you pay 20% of the Medicare-approved amount for medically necessary services. That 20% is your coinsurance, and under Original Medicare there is no yearly limit on what you pay out of pocket unless you have other coverage, such as a Medicare Supplement Insurance (Medigap) policy, Medicaid, or employer or union retiree coverage, according to Medicare's comparison of Original Medicare and Medicare Advantage.

Why "accepts assignment" matters

A provider that accepts assignment agrees to take the Medicare-approved amount as full payment. Medicare.gov's page on whether a provider accepts Medicare as full payment explains that such a provider can charge you only the deductible and coinsurance, must submit the claim to Medicare for you, and usually waits for Medicare to pay its share before asking for yours. A provider that does not accept assignment may ask you to pay the full amount at the time of service and, in many cases, can charge up to 15% above the approved amount. Where we have matched a clinic to CMS data, its listing shows whether the group accepts Medicare assignment. Ask the clinic to confirm before you start.

There is no hard cap on therapy

For years, Medicare limited how much it would pay for outpatient therapy in a year, with an exceptions process. That changed with the Bipartisan Budget Act of 2018. CMS's therapy services page explains that Section 50202 of the law repealed the outpatient therapy caps. Medicare.gov now states plainly that there is no limit on how much Medicare pays for your medically necessary outpatient therapy services in one calendar year.

The KX modifier threshold

The law kept the old cap amounts as thresholds. Once a patient's therapy costs for the year pass the threshold, the provider must add a code called the KX modifier to claims. The modifier confirms that the services are medically necessary and that the medical record documents why. CMS says claims above the threshold without the modifier are denied. For calendar year 2026, CMS lists the threshold as $2,480 for physical therapy and speech-language pathology combined, with a separate $2,480 threshold for occupational therapy. The amount is adjusted each year.

The threshold is not a limit on your care. It is a point at which the clinic must confirm and document continued need. If your therapy is likely to go past it, ask the clinic how it documents medical necessity and whether it expects any problem with coverage.

Targeted medical review

The same CMS page explains that Medicare also keeps a targeted medical review process. For calendar years 2021 through 2027, the review threshold is $3,000 for physical therapy and speech-language pathology services, and $3,000 for occupational therapy. CMS says the process is targeted, which means not every claim above that amount is reviewed.

If Medicare may not pay: the ABN

Medicare.gov warns that a provider may recommend services that Medicare does not cover, or more often than Medicare covers them, which could mean extra costs for you. When a provider expects Medicare to deny payment for a service, it can give you an Advance Beneficiary Notice of Noncoverage. CMS's ABN page explains that the notice is used under Original Medicare to shift possible financial responsibility to the patient in certain cases. Read it carefully, ask why the clinic expects a denial, and keep a copy. CMS's therapy page notes that limitation-of-liability protections continue to apply when therapy claims are denied for certain reasons, including a missing KX modifier.

Medicare Advantage plans

If you have a Medicare Advantage plan, Medicare's comparison page says the plan must cover all medically necessary services that Original Medicare covers, but its out-of-pocket costs can differ. A plan may require prior authorization, a referral or the use of in-network providers. Plans also have a yearly limit on what you pay for covered services. Call your plan to ask what physical therapy costs per visit and what approvals are needed.

If a claim is denied

Under Original Medicare, your Medicare Summary Notice shows what was paid and denied. Medicare.gov's appeals page explains that there are five levels of appeal and that the first, called a redetermination, must be filed by the date shown on that notice. Ask the clinic for any records that support your case. For free, one-on-one help with Medicare questions, your State Health Insurance Assistance Program (SHIP) can assist.

Questions to ask a clinic about Medicare

• Do you accept Medicare assignment for all physical therapy services?
• Will you send my plan of care to my doctor to certify, and how will I know it was signed?
• How will you handle the KX modifier threshold if my therapy goes past it?
• Do you ever ask Medicare patients to sign an ABN, and for which services?
• If I have a Medicare Advantage plan, are you in network, and who requests any prior authorization?

This page is general information, not legal or medical advice, and Medicare amounts change each year. Check Medicare.gov for current figures. We list registry records and do not rate or recommend any clinic.

Updated 2026-10-16.

General information only, current as of the date above. The information on Physical Therapy Index is not medical advice and does not replace a doctor, nurse, discharge planner or other qualified professional. Do not use it to make decisions about diagnosis or treatment. If you have a medical emergency, call 911. Rules and programs change; check the official sources linked in this guide.