Original Medicare (Parts A and B) and Medicare Advantage (Part C) cover OT when it’s medically necessary. Medigap can help decrease out-of-pocket costs.

OT is a form of rehabilitative care that can help you regain strength, dexterity, and skill after surgery, illness, or injury. Simply put, OT can help enhance or restore the fine and basic motor skills that make daily living tasks easier.

Medicare generally covers OT services related to:

  • treating a diagnosed medical condition
  • treating or recovering from an injury that affects your ability to function
  • recovering from a medical procedure or surgery
  • reducing the risk of additional injury or decline

The parts of Medicare that pay for these services and the costs you’ll be responsible for may vary based on your coverage.

Part A is hospital insurance. It covers OT services received during an inpatient stay at a hospital or:

Your healthcare professional may recommend inpatient OT after a major accident, injury, or surgery. Inpatient care involves 24-hour medical supervision and access to specialized equipment.

Part A also covers part-time or intermittent OT services received at home from a home health aide.

Services must not exceed 8 hours per day or 28 hours per week to be considered part-time or intermittent. In some circumstances, services may be covered up to 35 hours per week.

Here are the basic costs for Part A in 2024:

  • $278 to $505 monthly premium, if you have one
  • $1,632 deductible for each benefit period
  • 20% of all Medicare-approved costs during your stay
  • $0 coinsurance for days 1 to 60 of treatment after you pay your deductible
  • $408 coinsurance per day for days 61 to 90 of treatment
  • $816 coinsurance per day for days 91 to 150 of treatment while using your 60 lifetime reserve days
  • 100% of the treatment costs for days 151+

Part B is medical insurance. It covers OT services received during an outpatient visit or appointment with a healthcare professional.

Your healthcare professional may recommend outpatient OT after an orthopedic injury or stroke, as part of an ongoing care plan for a chronic condition, or in response to other changes in ability or function.

Outpatient OT services may be received in person or via telehealth until December 31, 2024. After this period, you must meet certain criteria to receive telehealth OT services.

Here are the basic costs for Part B in 2024:

  • $174.70+ monthly premium, if you have one
  • $240 deductible
  • 20% of all Medicare-approved costs during your treatment
  • any copayment or coinsurance fees
How much will Medicare cover?

There isn’t a limit on how much Medicare will pay for outpatient OT services in a calendar year. The so-called “therapy cap” was repealed in 2018 and is no longer in effect.

However, your healthcare professional must include a “KX modifier” code on claims that push your total outpatient OT costs for the calendar year over a certain threshold — $2,330 in 2024.

This code confirms that OT services are still medically necessary for your ongoing rehabilitation and care.

Part C, or Medicare Advantage, bundles hospital and medical insurance with other health and wellness coverage.

These plans are legally required to provide, at a minimum, the same amount of inpatient and outpatient OT coverage as Original Medicare plans.

Costs vary depending on the plan and provider you choose. Each plan has a different premium, deductible, copayment, and coinsurance amount.

Staying within your plan’s “network” of healthcare professionals, facilities, and other providers ensures you receive the maximum amount of coverage at the lowest out-of-pocket cost.

Once you pay your plan’s out-of-pocket maximum, your plan will cover 100% of all Medicare-approved costs.

What about Medigap?

Medigap can help cover some costs associated with parts A and B, such as premiums, deductibles, and copays. You can only enroll in Medigap if you have an Original Medicare plan.

You can’t enroll in Medigap if you have a Part C plan.

Medicare will only pay for OT that it considers medically necessary. You’ll need to meet your plan’s deductible and then pay some coinsurance or copayment costs.

Before you start your treatment, talk with your plan provider to better understand how much coverage you’ll receive.

The provider and facility you use for OT must accept Medicare assignment. You can find a Medicare-approved provider or facility here.