Medicare pays physical therapists through a system that caps what they can charge, but the actual amount varies by location and the type of service

Medicare does not set a single national rate for physical therapy. Instead, it publishes a Physician Fee Schedule that lists what it will pay for each procedure code — and that payment amount changes by geographic region. A physical therapist in rural Montana will see a different Medicare payment than one in suburban Boston for the same 30-minute session, because the fee schedule adjusts for local cost of living and overhead.

What you see on your bill depends on whether your therapist is in-network with Medicare (which most are) and whether you have already met your Part B deductible. If your therapist is in-network, Medicare pays them directly at the scheduled rate, and you pay your coinsurance — usually 20 percent of that amount. If your therapist is out-of-network, you may owe more.

The reimbursement rate also depends on the specific code billed. A 30-minute evaluation codes differently than a 30-minute treatment session, and manual therapy codes differently than therapeutic exercise. Medicare publishes these rates annually, and they typically shift by 1 to 3 percent year to year.

Key Takeaways

  • Medicare payment for physical therapy varies by your geographic location and the specific procedure code the therapist uses, not by a single flat rate.
  • If your therapist is in-network with Medicare, you pay 20 percent coinsurance after you meet your Part B deductible; the therapist bills Medicare for the rest.
  • The Physician Fee Schedule, updated annually by Medicare, lists the exact payment amount for each therapy code in your region.
  • Out-of-network therapists may charge more than the Medicare rate, and you could owe the difference if they do not accept Medicare assignment.
  • Physical therapy is subject to a therapy cap — a yearly limit on how much Medicare will pay for all outpatient therapy combined — though exceptions exist for certain diagnoses.

How the Physician Fee Schedule Works

The Physician Fee Schedule is a public list that Medicare updates every January. It assigns a dollar amount to hundreds of procedure codes — the five-digit numbers your therapist's office uses when billing. Each code represents a specific service: initial evaluation, follow-up treatment, manual therapy, ultrasound, or exercise instruction.

The base payment amount is then adjusted by a Geographic Practice Cost Index (GPCI), which accounts for differences in rent, staff wages, and equipment costs across regions. A therapist in San Francisco sees a higher GPCI multiplier than one in a small town, so the same code pays more in San Francisco. You can look up the exact rate for your ZIP code on the CMS (Centers for Medicare & Medicaid Services) website, though the numbers are technical and require knowing which code your therapist will bill.

Most in-network therapists accept what Medicare pays as full payment for their service. They do not bill you for the difference between what they charge and what Medicare reimburses. Out-of-network therapists are not bound by this rule and may send you a bill for any amount Medicare does not cover.

What You Pay Out of Pocket

Your out-of-pocket cost for physical therapy under Medicare Part B depends on two things: whether you have met your annual deductible, and whether your therapist is in-network.

For 2024, the Part B deductible is $240. Once you pay that amount toward any Part B services (doctor visits, therapy, imaging, lab work — it all counts together), your deductible is met for the year. After that, you pay 20 percent coinsurance on each therapy session. If Medicare's approved amount for a session is $100, you pay $20 and Medicare pays $80.

If your therapist is out-of-network and does not accept Medicare assignment, you may owe more. The therapist can charge up to 15 percent above the Medicare-approved amount, and you are responsible for that overage. Some out-of-network therapists charge significantly more and expect you to pay the full bill upfront, then seek reimbursement from Medicare yourself — a slower and more complicated process.

The Therapy Cap and How It Affects Your Coverage

Medicare sets an annual therapy cap — a limit on how much it will pay for all outpatient physical therapy, occupational therapy, and speech-language pathology combined in a calendar year. For 2024, that cap is $2,210. Once you and your therapist have used that amount, Medicare stops paying, though you may still receive therapy and pay out of pocket.

The cap applies to therapy received in outpatient settings: private clinics, hospital outpatient departments, and rehabilitation agencies. It does not explore to therapy you receive as an inpatient in a hospital or skilled nursing facility, or to therapy in your home under a home health plan.

However, the cap has a exceptions process. If your therapist believes you need more therapy than the cap allows, they can request a manual review from Medicare, citing your diagnosis and medical necessity. Certain conditions — stroke, Parkinson's disease, traumatic brain injury, and others — are more likely to receive exceptions. The request must come from your therapist or physician, not from you, and it takes several weeks to process.

How to Find the Exact Rate for Your Therapy

The CMS publishes the Physician Fee Schedule on its website, searchable by procedure code and ZIP code. However, the schedule is dense and requires knowing which code your therapist will bill. A simpler approach is to call your therapist's billing office and ask: "What is the Medicare-approved amount for a 30-minute treatment session in my area?" They can tell you in one call.

You can also call Medicare directly at 1-800-MEDICARE and provide your ZIP code and the type of therapy you need. They can give you a ballpark figure, though they may not have the exact code your therapist will use.

Before your first appointment, ask your therapist's office whether they are in-network with Medicare and whether they accept Medicare assignment. This determines whether you will owe coinsurance only or potentially an overage as well. Get the answer in writing if possible.

Private Insurance and Supplemental Coverage

If you have a Medigap (supplemental insurance) plan, it may cover some or all of your 20 percent coinsurance. Plans C, D, G, and M cover the Part B coinsurance, meaning you would owe nothing out of pocket once your deductible is met. Plans A, B, and F cover it as well, though Plan F is no longer sold to new beneficiaries. Check your policy documents or call your supplemental insurer to confirm what they cover.

If you have a Medicare Advantage plan (Part C) instead of Original Medicare, your physical therapy coverage works differently. Advantage plans set their own copays and coinsurance amounts, which may be lower or higher than the 20 percent standard. Some Advantage plans cover therapy with no copay; others charge $20 to $50 per visit. Check your plan's summary of benefits or call the plan directly to learn your specific cost.

Frequently Asked Questions

Does Medicare cover physical therapy at all?

Yes, Medicare Part B covers physical therapy when ordered by a physician and deemed medically necessary. The therapy must be for a condition that improves with treatment — not maintenance or prevention. Your therapist must be enrolled as a Medicare provider, and you must be receiving the therapy in an approved setting (clinic, hospital outpatient, or home health).

What happens if I reach the therapy cap mid-year?

Once you hit the $2,210 cap, Medicare stops paying for additional therapy in that calendar year. You can continue therapy if you pay out of pocket, or you can pause and resume in January when the cap resets. Your therapist can request an exception if they believe you need more therapy for medical reasons, but approval is not may provide.

Can I see a physical therapist without a doctor's referral?

Medicare requires a physician order for physical therapy to be covered. Some states allow direct access — meaning you can see a therapist without a referral — but Medicare will not pay unless a doctor has ordered the therapy. Ask your therapist whether they can obtain an order from your primary care doctor if you do not have one already.

Will my out-of-network therapist bill Medicare directly?

Not necessarily. Out-of-network therapists are not required to bill Medicare. Some will bill Medicare and send you an invoice for any overage; others will ask you to pay the full bill upfront and seek reimbursement from Medicare yourself. Always ask before your first visit what the billing process will be.

Does the therapy cap include therapy I receive in a hospital or nursing home?

No. The cap applies only to outpatient therapy. If you receive physical therapy as an inpatient in a hospital or as a resident in a skilled nursing facility, that therapy does not count toward your annual cap.