Is there still a Medicare therapy cap?

No, not a hard cap. The original $2,150 annual cap on outpatient PT and speech therapy combined was eliminated permanently in 2018 by the Bipartisan Budget Act. In its place is a soft threshold, $2,330 in 2026, above which the therapist must attach a KX modifier to claims certifying that continued treatment is medically necessary. With a KX modifier in place, Medicare keeps paying. The threshold is documentation, not a stop. Claims well above the threshold may trigger a targeted medical review, but legitimate clinical need is consistently approved.

What does outpatient PT cost the patient in 2026?

Under Medicare Part B, the patient pays 20% co-insurance after meeting the annual Part B deductible ($257 in 2026). For an outpatient visit billed around $130 to $180, the patient's 20% share is roughly $26 to $36 per visit. A Medicare Supplement (Medigap) plan typically pays the 20%, leaving the patient with no out-of-pocket cost. A Medicare Advantage plan has its own copay structure, often a flat $20 to $40 per visit.

Does PT delivered at home cost differently?

Yes. Home health PT under Part A, during a covered home-health episode, carries no separate co-pay. It is bundled into the home-health episode payment. The catch is that the patient must qualify for home health, which means being homebound with a need for intermittent skilled care. Outpatient PT delivered at home (a Part B service) follows the standard 80/20 split and is generally billed when home-health eligibility does not apply.

What is the KX modifier and when does it apply?

The KX modifier is a code the therapist adds to claims once a patient's cumulative therapy spend crosses the annual threshold ($2,330 in 2026 for PT and speech combined, $2,330 for OT separately). The modifier certifies that continued therapy is reasonable and medically necessary. Documentation in the chart must support it. Above $3,000 in a calendar year, claims may be subject to a targeted medical review by a Medicare contractor. Legitimate ongoing rehab is consistently covered.

What conditions does Medicare commonly cover PT for?

Post-stroke rehabilitation, post-surgical recovery (joint replacement, spine surgery, cardiac surgery), balance disorders and falls prevention, Parkinson's disease (including LSVT BIG programs), peripheral neuropathy, post-fracture mobility, vertigo and vestibular rehab, lymphedema, and chronic low back pain. Any condition with a documented functional deficit that PT can plausibly address, ordered by a physician with a signed plan of care, is in scope.

Where can PT be delivered?

Five settings, each with slightly different billing. Outpatient clinic (most common). Hospital outpatient department. Comprehensive Outpatient Rehabilitation Facility (CORF). Skilled nursing facility outpatient (for patients who are not in a covered SNF stay but receive therapy there). At home under home health Part A during a covered episode, or under Part B outpatient when not home-bound eligible. The clinical content can be similar across settings; the payment structure differs.

Does Medi-Cal cover PT?

Yes. Medi-Cal covers physical therapy for adults and children through managed-care plans and Fee-for-Service. The benefit requires a physician order and a plan of care. Many Medi-Cal plans require prior authorization for visits beyond an initial allowance (often 12 or 24 visits). For dual-eligible members, Medicare pays first and Medi-Cal picks up the 20% co-insurance and any additional visits Medicare does not authorize.

Physical therapy and Medicare: 2026 rules explained

What Medicare actually pays for in PT

Physical therapy under Medicare comes in two flavors with different payment structures, even though the clinical work can look identical to the patient. Outpatient PT under Part B is the most common: a senior goes to a clinic two or three times a week for six to twelve weeks after a knee replacement, a stroke, a fall, or a new balance problem. The therapist evaluates, builds a plan, treats, and bills Part B per visit. Medicare pays 80%, the patient pays 20%.

Home health PT under Part A is the other channel. When a patient is homebound and qualifies for a Medicare home-health episode, PT is one of the services included in the bundle. The patient pays nothing during the episode. Visits are scheduled into the home for the duration of the 60-day episode and re-certified if the skilled need continues.

The cap that no longer exists

For two decades, Medicare imposed an annual dollar cap on outpatient therapy: roughly $2,150 combined for PT and speech, separately for OT. The cap caused widespread confusion and forced families to stop therapy mid-recovery. The Bipartisan Budget Act of 2018 eliminated the hard cap permanently. In its place is a soft threshold, currently $2,330 in 2026, above which the therapist must add a KX modifier to the claim certifying that continued treatment is medically necessary. With the modifier, Medicare continues to pay.

Above $3,000 in cumulative annual therapy spend, claims may trigger a targeted medical review by a Medicare contractor. The review checks documentation. Properly documented ongoing rehab is consistently covered. The threshold is a documentation step, not a denial point.

What it costs in 2026

Part B outpatient PT in California is billed at roughly $130 to $180 per 45-minute visit, depending on the provider and the codes used. With Medicare paying 80% after the annual Part B deductible ($257 in 2026), the patient’s 20% co-insurance is approximately $26 to $36 per visit.

Medicare Supplement (Medigap) plans typically pay the 20%, leaving the patient at $0 per visit.
Medicare Advantage plans charge their own copay, often $20 to $40 per visit, with an annual out-of-pocket maximum.
Home health PT during a covered episode: $0 patient cost.
Medi-Cal-only members: $0 patient cost, with prior authorization required for extended courses.

Where PT can be delivered

The setting affects billing and convenience, not usually the clinical work.

Outpatient clinic. The most common setting. The patient drives or is driven to the clinic two or three times a week.
Hospital outpatient department. Often used after orthopedic surgery for the first six weeks, before transitioning to a community clinic.
Comprehensive Outpatient Rehabilitation Facility (CORF). Less common in California, used for patients needing multidisciplinary rehab (PT + OT + speech) in one location.
SNF outpatient. For patients who finished a SNF stay but still need ongoing therapy and live near the facility.
Home health (Part A bundle). For homebound patients during a covered episode.
Home outpatient (Part B). Less common, used when a patient cannot reach a clinic but does not meet home-health eligibility.

What Medicare commonly pays to treat

Among older adults in California, the most frequently covered indications include:

Post-stroke rehabilitation, with intensive PT in the first three months making the largest functional difference
Post-surgical recovery: total knee replacement, total hip replacement, spine surgery, cardiac surgery
Balance disorders and falls prevention, including vestibular rehab for inner-ear dysfunction
Parkinson’s disease, including the LSVT BIG protocol designed for Parkinson’s motor symptoms
Post-fracture mobility, particularly after hip fracture
Lymphedema treatment, often after breast cancer surgery
Peripheral neuropathy with functional impact
Chronic low back pain (Medicare-covered when conservative care is appropriate)

The pattern across these conditions: a clear functional goal, a documented baseline, measurable progress at each re-evaluation, and a path to either independence or a home exercise program that maintains gains.

Home health PT versus outpatient PT

For a senior who is homebound, home health PT is often the right starting point. The therapist comes to the patient, treatment fits into a household routine, and the patient pays nothing during the covered episode. The limitation is that home health visits are typically less intensive than clinic-based therapy, with less equipment available.

Once the patient is no longer homebound (can leave home with reasonable effort), transitioning to outpatient PT often makes clinical sense. Outpatient clinics have parallel bars, treadmills, balance equipment, and full-length resistance training tools that a home setting does not. Many California rehab journeys move from home health PT in week one through three, to outpatient PT in week four onward.

Medi-Cal coverage in California

Medi-Cal covers physical therapy for eligible members through managed-care plans and Fee-for-Service. A physician order and a written plan of care are required. Most plans authorize an initial block of 12 to 24 visits, with additional visits subject to prior authorization based on documented progress and continuing need.

For dual-eligible patients (both Medicare and Medi-Cal), Medicare pays primary at 80% and Medi-Cal picks up the 20% co-insurance plus any visits that Medicare does not authorize. This combination effectively removes out-of-pocket cost for dual-eligibles who use Medi-Cal-enrolled providers.

How to start

Identify the functional problem: difficulty climbing stairs, balance trouble, post-surgical weakness, post-stroke deficit.
See the primary care physician, who orders PT and may refer to a specific clinic or specialist.
Choose a clinic in-network for the patient’s plan. For Original Medicare, any Medicare-enrolled PT clinic works. For Medicare Advantage, stay in network unless out-of-network is specifically covered. For Medi-Cal, the managed-care plan’s contracted clinics apply.
The clinic performs an initial evaluation, builds a plan of care, and submits it to the physician for signature within 30 days.
Treatment begins. Re-evaluation typically happens every 10 to 13 visits. Above the KX threshold, the therapist adds the modifier and continues.

Common misconceptions to clear up

“Medicare caps PT at $2,150 a year.” The cap was eliminated permanently in 2018. The threshold above which a KX modifier is required is $2,330 in 2026, and the modifier is documentation, not denial.

“My parent already used too much PT this year.” There is no annual visit limit under Medicare. As long as the therapy is medically necessary and the documentation supports it, coverage continues.

“PT at home isn’t covered.” It is, under home health Part A when the patient is homebound and within a covered episode, with no patient cost. It is also covered under Part B outpatient with the standard 20% co-insurance when home-health eligibility does not apply.

“Medi-Cal doesn’t pay for therapy.” It does, with prior authorization for extended courses. Dual-eligible members have effectively no out-of-pocket cost.

Related services and next steps

This guide explains coverage and eligibility, not medical advice. Talk to a licensed clinician about care decisions. California Care Compass does not place referrals on Services & Treatments pages.

Physical therapy and Medicare coverage in California: the 2026 rules.