Medicare covers rehabilitation in specific settings and for specific reasons, but not all rehabilitation

Medicare Part A covers inpatient rehabilitation in a hospital or skilled nursing facility if you meet strict conditions: you must have been admitted to a hospital for at least three consecutive days, you must need daily skilled nursing or therapy care, and you must be admitted to the rehabilitation facility within a short window after hospital discharge. Part B covers outpatient rehabilitation — physical therapy, occupational therapy, and speech-language pathology — at clinics, your home, or other settings, but only if ordered by a doctor and only for a condition that Medicare considers medically necessary.

The key word is skilled care. Medicare does not cover custodial care, which is help with daily living activities like bathing or dressing when that is the only service you need. It also does not cover long-term rehabilitation for conditions that are not improving, or rehabilitation in settings that are not Medicare-approved.

Key Takeaways

  • Inpatient rehabilitation through Medicare Part A requires a hospital stay of at least three consecutive days before you can move to a rehabilitation facility.
  • Outpatient rehabilitation through Medicare Part B covers physical therapy, occupational therapy, and speech therapy ordered by your doctor for a medical condition.
  • Medicare covers rehabilitation only when a doctor determines it is medically necessary and you are making progress toward a specific goal.
  • You will pay a copay or coinsurance for rehabilitation services, and the amount depends on whether you are in a hospital, skilled nursing facility, or outpatient setting.

Inpatient Rehabilitation in a Hospital or Skilled Nursing Facility

If you are hospitalized for a serious illness or injury — a stroke, hip fracture, major surgery, or spinal cord injury — and your doctor determines you need intensive rehabilitation, Medicare Part A may cover a stay in an inpatient rehabilitation facility (IRF) or a skilled nursing facility (SNF). The facility must be Medicare-approved, and your doctor must order the transfer.

The three-day hospital stay rule is strict. You must be admitted as an inpatient (not observation status) for at least three consecutive calendar days before you can be admitted to the rehabilitation facility. The clock starts on the day you are admitted, and the day you are discharged does not count. If you are in observation status instead of admitted as an inpatient, those days do not count toward the three-day requirement.

Once you are admitted to the rehabilitation facility, Medicare Part A covers your room, meals, nursing care, therapy, and most medications and supplies. You will pay a daily copay after day 20, and the amount increases after day 100. The facility must discharge you when your doctor determines you have reached your rehabilitation goals or when you stop making progress.

Outpatient Rehabilitation Services

Medicare Part B covers physical therapy, occupational therapy, and speech-language pathology in outpatient settings — a therapist's office, a hospital outpatient department, your home, or a community center. Your doctor must order the therapy and document that it is medically necessary for a condition you have. The therapist must be licensed and the facility must be Medicare-approved.

You can receive outpatient therapy without being hospitalized first. For example, if you have arthritis and your doctor orders physical therapy to improve your mobility, Medicare Part B will cover it. If you have a stroke and need speech therapy at home, Medicare Part B covers that too. The therapy must be aimed at improving a specific function or managing a condition; it cannot be for general wellness or fitness.

For outpatient therapy, you pay 20 percent of the Medicare-approved amount after you meet your Part B deductible. There is no limit on the number of therapy visits Medicare will cover, but your doctor must order them and the therapist must document that you are making progress toward a measurable goal.

Home Health Rehabilitation

If you are homebound or cannot travel to a clinic, Medicare Part A covers skilled nursing care and therapy services in your home. A nurse or therapist must visit you, and a doctor must order the services. Home health is covered only if you are homebound — meaning you cannot leave home without considerable effort or help — and only for a condition that requires skilled care.

Home health rehabilitation is often used after hospitalization. For example, if you have a wound that needs daily dressing changes and physical therapy after surgery, Medicare Part A covers a home health nurse and a physical therapist to visit you at home. You pay nothing for home health services covered by Part A, but you may pay a copay for certain supplies or equipment.

What Medicare Does Not Cover

Medicare does not cover rehabilitation that is purely custodial — help with bathing, dressing, toileting, or eating when skilled nursing or therapy is not needed. It does not cover long-term care in a nursing home unless you need skilled nursing care, and it does not cover rehabilitation for conditions that are not improving or that have reached a plateau.

Medicare also does not cover rehabilitation in settings that are not Medicare-approved, such as some private rehabilitation centers or wellness facilities. It does not cover therapy ordered for general fitness, wellness, or prevention, only therapy ordered for a specific medical condition. And it does not cover experimental or investigational rehabilitation methods.

If you need ongoing custodial care — help with daily living activities — you will need to pay out of pocket, use Medicaid if you are low-income, or purchase long-term care insurance. Some Medicare Advantage plans offer additional rehabilitation benefits beyond Original Medicare, so check your plan documents.

How Much You Pay for Rehabilitation

Your costs depend on the type of rehabilitation and your Medicare coverage. For inpatient rehabilitation in a hospital or skilled nursing facility under Part A, you pay a daily copay that varies by facility and length of stay. For the first 20 days in a skilled nursing facility, you pay nothing if you meet the three-day hospital stay requirement. From day 21 to day 100, you pay a daily copay. After day 100, you pay all costs.

For outpatient rehabilitation under Part B, you pay 20 percent of the Medicare-approved amount after you meet your annual Part B deductible. For home health under Part A, you typically pay nothing, though you may pay a copay for certain supplies.

If you have a Medigap or Medicare Advantage plan, your out-of-pocket costs may be lower. Medigap plans can cover some or all of your copays and coinsurance. Medicare Advantage plans have their own cost structures and may cover rehabilitation differently than Original Medicare.

How to Know if Your Rehabilitation Will Be Covered

Before you are discharged from the hospital or admitted to a rehabilitation facility, ask your doctor or the hospital discharge planner whether Medicare will cover your rehabilitation. They can tell you whether you meet the requirements — the three-day hospital stay, the medical necessity, and the facility's Medicare approval status. Ask for this information in writing if possible.

If you are unsure whether a specific therapy or facility is covered, call Medicare at 1-800-MEDICARE (1-800-633-4227) before you start treatment. You can also ask your doctor's office or the facility to check your coverage. If Medicare denies coverage, you have the right to appeal the decision.

Keep records of all rehabilitation services you receive, including the dates, the type of therapy, the provider's name, and the facility name. These records are important if you need to appeal a coverage decision or if you have questions about your bill.

Frequently Asked Questions

Does Medicare cover rehabilitation after a stroke?

Yes, if your doctor orders it and determines it is medically necessary. Inpatient rehabilitation in a hospital or skilled nursing facility is covered under Part A if you meet the three-day hospital stay requirement. Outpatient therapy and home health therapy are covered under Part B and Part A respectively, as long as your doctor orders them and you are making progress toward a goal.

What if I need rehabilitation but was not hospitalized for three days?

If you were in observation status or hospitalized for fewer than three days, you do not meet the requirement for inpatient rehabilitation facility coverage under Part A. However, you may still be able to receive outpatient rehabilitation under Part B if your doctor orders it. Ask your doctor whether outpatient therapy is appropriate for your condition.

Does Medicare cover rehabilitation in a private rehabilitation center?

Only if the center is Medicare-approved. Before you choose a facility, ask whether it accepts Medicare and is approved by Medicare. If it is not approved, Medicare will not cover your stay, and you will pay all costs out of pocket.

How long does Medicare cover rehabilitation?

There is no set time limit. Medicare covers rehabilitation as long as your doctor orders it, the facility or provider is Medicare-approved, you are making progress toward a measurable goal, and the care is medically necessary. Once you reach your goals or stop making progress, your doctor will discharge you from rehabilitation.

Will my Medicare Advantage plan cover the same rehabilitation as Original Medicare?

Medicare Advantage plans must cover at least what Original Medicare covers, but they may cover more or have different rules about copays and which facilities are in-network. Check your plan documents or call your plan to understand your specific coverage before you start rehabilitation.