Medicare does cover rehabilitation, but only in specific settings and under certain conditions

Medicare pays for rehabilitation services — physical therapy, occupational therapy, and speech therapy — but the amount it covers depends on where you receive care and whether you meet medical necessity requirements. Medicare does not pay for all rehab. It will not cover long-term custodial care, maintenance therapy to prevent decline, or rehab in your home unless you are homebound and a doctor orders it. The setting matters: Medicare covers inpatient rehab in a hospital or skilled nursing facility after a may have access to hospital stay, but coverage in outpatient clinics, your home, or assisted living works differently.

Understanding which settings are covered and what you will pay out of pocket helps you plan for therapy costs and avoid surprise bills. A doctor's order is required for any rehabilitation service, and the facility or therapist must accept Medicare for the service to be covered.

Key Takeaways

  • Medicare Part A covers inpatient rehabilitation in a hospital or skilled nursing facility, but only after a hospital stay of at least three days and only if a doctor determines you need daily skilled care.
  • Medicare Part B covers outpatient rehabilitation at a clinic or hospital, but you pay 20 percent of the cost after you meet your deductible, and there are annual limits on the number of visits per year.
  • Home health rehabilitation is covered under Part A if a doctor orders it and you are homebound, meaning you cannot leave home without help or medical risk.
  • Medicare does not pay for rehab that is purely maintenance or preventive, such as therapy to keep you from getting worse if you are already stable.
  • You will need a doctor's order for any rehabilitation service, and the facility or therapist must accept Medicare for the service to be covered.

Inpatient Rehabilitation in a Hospital or Skilled Nursing Facility

If you are admitted to a hospital and then transferred to an inpatient rehabilitation facility or skilled nursing facility for therapy, Medicare Part A covers the cost. You must have been in the hospital for at least three consecutive days (not counting the day you leave) before the transfer. The facility must be Medicare-certified, and a doctor must determine that you need daily skilled nursing care or rehabilitation that cannot be provided in an outpatient setting.

You pay a copay for days 1 through 20 of your stay (currently $0 in 2024, though this can change), and a higher copay for days 21 through 100 (currently $200 per day in 2024). After day 100, you pay all costs. The length of stay is not automatic — Medicare reviews whether you are making progress toward your rehabilitation goals, and coverage can end if progress stops. Common reasons for inpatient rehab include recovery from a stroke, hip fracture, joint replacement, or spinal cord injury. The facility provides 24-hour nursing care, meals, and therapy sessions scheduled by a rehabilitation team.

Outpatient Rehabilitation at a Clinic or Hospital

Medicare Part B covers physical therapy, occupational therapy, and speech-language pathology in outpatient settings — a hospital outpatient department, a rehabilitation clinic, or your therapist's office. You pay 20 percent of the Medicare-approved amount after you meet your Part B deductible (currently $240 in 2024). The therapist or facility must be Medicare-certified and accept Medicare.

There are annual visit limits. For physical therapy and speech-language pathology combined, the limit is currently 60 visits per calendar year. Occupational therapy has a separate limit of 60 visits per year. These limits can be waived if your doctor documents that more visits are medically necessary, but the waiver must be requested in advance — it is not automatic. You do not need a hospital stay to receive outpatient therapy. A doctor's order is required, but you can start therapy at any time. If you are working with a therapist, ask them to verify your coverage before your first visit, because some therapists do not accept Medicare or may have restrictions on the number of visits they will bill.

Home Health Rehabilitation

Medicare Part A covers rehabilitation services in your home if a doctor orders them and you meet the definition of homebound. Homebound means you cannot leave home without help or without a medical risk — for example, you cannot walk without information, or leaving home would cause severe pain. You must also be receiving care from a Medicare-certified home health agency.

Home health covers physical therapy, occupational therapy, and speech therapy, as well as nursing care and medical equipment. There is no copay for home health services covered under Part A. The agency bills Medicare directly, and you pay nothing as long as the services are deemed medically necessary. Home health is typically short-term — weeks to a few months — while you recover enough to move to outpatient therapy or independent function. If you need ongoing therapy after you are no longer homebound, you would transition to outpatient services and pay the Part B copay.

What Medicare Does Not Cover

Medicare does not pay for maintenance therapy — therapy intended to keep you at your current level of function rather than improve it. If your doctor says you have plateaued and therapy will not help you regain lost function, Medicare will not cover it. This is a common reason for coverage denial, especially for people with chronic conditions like arthritis or Parkinson's disease.

Medicare also does not cover preventive therapy, such as exercises to prevent a fall or to maintain strength in a limb that is not injured. Custodial care — help with bathing, dressing, or eating — is not covered by Medicare, even if it is provided in a skilled nursing facility. If you need ongoing custodial care, you would need to pay out of pocket or look into Medicaid, which has different rules. Rehabilitation in assisted living facilities, memory care units, or other residential settings is not covered by Medicare. If you live in one of these settings and need therapy, you would receive outpatient services and pay the Part B copay, or you would pay the facility directly.

How to Know If Your Rehab Will Be Covered

Before you start rehabilitation, ask your doctor or the facility to verify coverage with Medicare. The facility can submit a request to Medicare to determine whether your specific situation meets medical necessity. This is called a pre-authorization or coverage information, and it usually takes a few days.

If Medicare denies coverage, you have the right to appeal. The facility or your doctor can file an appeal on your behalf, or you can do it yourself. You have 120 days from the date of the denial notice to file an appeal. Many denials are overturned on appeal, especially if your doctor provides additional documentation of your progress or medical need. Keep copies of all paperwork: your hospital discharge summary, your doctor's orders for therapy, and any coverage information letters from Medicare. These documents are important if you need to appeal or if you switch facilities.

Costs You May Pay Out of Pocket

Even when Medicare covers rehabilitation, you may have costs. For inpatient rehab, you pay the copay amounts listed above. For outpatient therapy, you pay 20 percent of the approved amount. If you have a Medigap or Medicare Advantage plan, your out-of-pocket costs may be lower, depending on your plan.

If you reach your annual visit limits for outpatient therapy and need more visits, you can pay out of pocket for additional sessions. Some therapists offer discounted rates for self-pay patients, so it is worth asking. You can also ask your doctor whether the visits are truly necessary or whether you can continue with a home exercise program instead. If Medicare denies coverage and you disagree, you can still receive therapy and pay out of pocket while you appeal. You are not required to stop therapy while the appeal is being reviewed.

Frequently Asked Questions

Do I need a hospital stay before Medicare will cover rehab?

Only for inpatient rehabilitation in a hospital or skilled nursing facility — you need at least three days in the hospital first. Outpatient therapy and home health do not require a prior hospital stay; your doctor can order them directly. Home health does require that you be homebound, but not that you were recently hospitalized.

What happens if I run out of outpatient visits before I am done with therapy?

You can request a waiver from Medicare if your doctor documents that more visits are medically necessary. The waiver is not automatic, but many are approved. If the waiver is denied, you can pay out of pocket for additional sessions, appeal the denial, or work with your therapist on a home exercise program to continue progress on your own.

Will Medicare cover therapy in an assisted living facility?

No. If you live in assisted living and need therapy, you would receive outpatient services at a clinic or hospital and pay the Part B copay. The assisted living facility itself does not may have access to as a Medicare-covered setting for rehabilitation.

Can my doctor order unlimited rehabilitation?

Your doctor can order as much therapy as they believe is medically necessary, but Medicare will not pay for it if it exceeds the annual visit limits or if Medicare determines it is not medically necessary. Outpatient therapy has annual limits (60 visits for physical therapy and speech therapy combined, 60 for occupational therapy), and inpatient stays are reviewed for progress. Your doctor's order is required, but it does not may provide Medicare will pay.

What should I do if Medicare denies my rehabilitation coverage?

Ask for a written explanation of why coverage was denied. Common reasons are that therapy is deemed maintenance rather than restorative, or that you have reached your visit limit. You can appeal within 120 days. Ask your doctor or therapist to submit additional documentation of your medical need and progress. Many appeals are successful, especially if new information supports medical necessity.