Know the Truth: Understanding Medicare’s Therapy Caps

If you have Medicare, you may have heard recently more about the limitations or “caps” they place on certain treatments, including physical therapy. Just like other insurances, Medicare (the red, white and blue card) places limits on their coverage and “caps” the amount it will pay for outpatient physical therapy in a calendar year. The good news is that there are exceptions that allow Medicare patients to continue skilled therapies when they are medically necessary, and we can help easily navigate through the process.

There are two “caps” that require an exception. When services are necessary but reach $1900 there is a process that your therapist will automatically complete, which does not slow down your care as a patient, and allows you to continue treatment. The second cap is $3700. If your therapy is still medically necessary, we will do paper work and ask for pre-approval from your physician and Medicare to continue. It’s important to note that we have found very few patients at Northern ever get to the second cap with therapy services in one year. Our physical therapists and billing team are aware of these financial limitations and can apply for an exception if your continued care is medically necessary. We will explain how Medicare defines “medically necessary” and how it applies to your condition and treatment.

What about Medicare Advantage plans like Priority Health, BCBS Medicare, or others? These Medicare Advantage plans may apply the cap as well, however, some plans have chosen not to follow this Medicare rule. At Northern we always check with your insurance plan and let you, and our therapists, know of the current payment policies for your particular insurance.

If you still have questions about your coverage, simply call our insurance benefits specialist at 616.259.5674 or email us at We will be more than happy to walk through your personal coverage and answer your billing questions.

Would you like to see this “cap” go away? Make your voice heard. Medicare beneficiaries can ask their members of Congress to repeal the therapy cap by going to the American Physical Therapy Association’s Patient Legislative Action Center.

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