Physical therapy (PT) is a common and highly effective treatment strategy for managing the pain, stiffness, and reduced mobility associated with arthritis. The goal of this non-surgical approach is to improve joint function, increase strength, and help patients maintain independence. For individuals enrolled in Medicare, understanding coverage requires a look at both the standard rules and the variations among different plan types. The availability and cost of these services depend on whether an individual has Original Medicare or a Medicare Advantage plan.
Medicare Part B Coverage Rules for Physical Therapy
Outpatient physical therapy services are covered under Medicare Part B, which handles medical services and supplies needed to treat a health condition. Coverage is provided for services deemed “medically necessary” to treat a patient’s illness or injury, including chronic conditions like osteoarthritis or rheumatoid arthritis. This coverage is authorized under federal law.
Medical necessity is the core requirement for coverage, meaning the therapy must be a skilled service that can only be safely and effectively performed by a qualified therapist. For arthritis, this often translates to individualized exercise programs, manual therapy, and gait training designed to restore function or slow the rate of decline. To receive coverage, the patient’s physician or another qualified healthcare provider must certify the need for therapy, and a detailed plan of care must be established and periodically reviewed.
While Medicare no longer imposes a hard dollar limit on the amount it pays for medically necessary outpatient therapy, a financial threshold remains. Once the cost of combined physical therapy and speech-language pathology services exceeds a specified annual amount (currently $2,330 in 2024), the provider must confirm the medical necessity of all subsequent services. This confirmation is indicated by adding a specific modifier (the KX modifier) to the claim. Claims that exceed a second, higher threshold (currently $3,000 for PT/SLP combined) are subject to a targeted medical review.
How Medicare Advantage Plans Handle Physical Therapy
Medicare Advantage Plans (Part C) are offered by private companies approved by Medicare. They must cover all the same services as Original Medicare (Parts A and B), including medically necessary physical therapy for arthritis. However, these plans structure their benefits and delivery differently, which impacts how a patient accesses care. The administrative structure of a Part C plan can significantly alter the experience of seeking therapy.
Most Medicare Advantage plans, which often operate as Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs), utilize provider networks. Patients generally have the lowest out-of-pocket costs when they use physical therapists who are in-network with their specific plan. Seeking care outside this network may result in higher expenses or no coverage, which contrasts with Original Medicare’s allowance for patients to see any provider nationwide who accepts Medicare.
A common feature of Medicare Advantage plans is the requirement for prior authorization before beginning a course of physical therapy. This administrative step means the plan must approve the treatment plan before services are rendered, which can sometimes lead to delays in starting care. Recent regulations, however, have aimed to streamline this process, requiring that prior authorization approvals remain valid for as long as the service is medically necessary.
Patient Financial Responsibility
Under Original Medicare Part B, the patient’s financial responsibility for covered physical therapy services is clearly defined. The patient must first meet the annual Part B deductible (currently $240 in 2024). After the deductible is met, the patient is responsible for a 20% coinsurance of the Medicare-approved amount for each session.
The remaining 80% of the approved cost is paid by Medicare. Because chronic conditions like arthritis often require ongoing treatment, this 20% coinsurance can accumulate quickly with frequent therapy sessions. This is where a Medicare Supplement Insurance plan, or Medigap, may become beneficial, as these plans are designed to help cover the “gaps” in Original Medicare.
Medigap plans work by paying some or all of the patient’s cost-sharing obligations, including the 20% Part B coinsurance for physical therapy. Most standardized Medigap plans cover the Part B coinsurance entirely, which can dramatically reduce the patient’s out-of-pocket expenses for ongoing arthritis management. In contrast, Medicare Advantage plans usually replace the 20% coinsurance with fixed co-payments for each therapy visit. These co-payments vary widely by plan and may or may not count toward an annual maximum out-of-pocket limit.