“I need therapy. How much of the cost will Medicare pay?”

To most seniors on fixed incomes, that’s the first question that comes to mind.  Thank goodness we live in the Information Age – most of the answers are at the tips of our fingers!

First, find out how much your specific test, item, or service will cost:  talk to your doctor or other health care provider. The specific amount you’ll owe may depend on whether you have other insurance, how much your doctor charges, whether your doctor accepts assignment, the type of therapy provider, and the location where you get your test, item, or service.

Your doctor may recommend you get services more often than Medicare covers. Or, he or she  may recommend services that Medicare doesn’t cover. If this happens, you may have to pay some or all of the costs. It’s important to ask questions so you understand why your doctor is recommending certain services and whether Medicare will pay for them.

Medicare Part B (Medical Insurance) helps pay for medically necessary outpatient physical and occupational therapy, and speech-language pathology services.  (The government describes “medically necessary” as “Health Care services needed to prevent, diagnose, or treat an illness, injury, condition, disease or its symptoms and that meet accepted standards of medicine.”)

There are limits on these services when you get them from most providers. These limits are called “therapy caps” or "therapy cap limits."

The therapy cap limits for 2015 are:

  • $1,940 for physical therapy (PT) and speech-language pathology (SLP) services combined;
  • $1,940 for occupational therapy (OT) services.

Everyone with Medicare is covered.  First, though, you must pay the amount of your yearly deductible for Part B.  After that, Medicare will pay its share – 80 percent – of the remaining bill, and you will pay the final 20 percent. The Part B deductible is $147 for 2015.  Medicare will pay its share for therapy services until the total amount paid by both you and Medicare reaches either one of the therapy cap limits.

 (Note that both the United States House and Senate are considering amendments to the Medicare fee schedule.)

You may qualify for an exception to the therapy cap limits so that Medicare will continue to pay its share for your therapy services beyond the therapy cap limits. In this case, your therapy provider must:

  • Establish your need for medically reasonable and necessary services and document this in your medical record; and
  • Indicate on your Medicare claim for services above the therapy cap that your outpatient therapy services are medically reasonable and necessary.

As part of the exceptions process, there are additional limits called “thresholds.”  If you get outpatient therapy services higher than the threshold amounts, a Medicare contractor will review your medical records to check for medical necessity. The threshold amounts for 2015 are: 

  • $3,700 for physical therapy  and speech-language pathology combined; and
  • $3,700 for occupational therapy.

Generally when an exceptions process is in effect, if your therapy provider provides documentation showing that your services were medically reasonable and necessary and indicates this on your claim, Medicare will continue to cover its share above the $1,940 therapy cap limits.

Because Medicare doesn't pay for therapy services that aren't reasonable and necessary, your therapist or therapy provider must give you a written notice, called an Advance Beneficiary Notice of Noncoverage (ABN), before providing generally covered therapy services that aren't medically reasonable and necessary for you at the time. The ABN lets you choose whether you want the therapy services. If you choose to get these services, you agree to pay for them.

To find out of your test, item or service is covered, just go to this page.  It’s the official government site  for Medicare services.  Type in the name of the service you’re considering in the box at the top of the page, and you’ll know right away if it’s a covered procedure.

We at Blue Sky Therapy are ready to assist your therapy – we’re the experts!

Blue Sky Therapy has a continued commitment to patient-driven quality, excellence, integrity and innovation in everything that we do. That’s why we are scrupulous about planning the treatment of each and every client, and carefully documenting the outcome!

This information is not intended to replace the advice of a doctor. Blue Sky disclaims any liability for the decisions you make based on this information.

This information only applies if you have Original Medicare. If you have a Medicare Advantage Plan (like an HMO or PPO), check with your plan for information about your plan’s coverage rules.

More resources:

American Physical Therapy Association