Scrutinizing Medicare Coverage For Physical, Occupational And Speech Therapy

[UPDATED at 6:30 p.m. ET on March 29]

For years, confusion has surrounded the conditions under which older adults can receive physical, occupational and speech therapy covered by Medicare.

Services have been terminated for some seniors, such as those with severe cases of multiple sclerosis or Parkinson’s disease, because therapists said they weren’t making sufficient progress. Others, including individuals recovering from strokes or traumatic brain injuries, have been told that they reached an annual limit on services and didn’t qualify for further care.

Neither explanation stands up to scrutiny. Medicare does not require that older adults demonstrate improvement in order to receive ongoing therapy. Nor does it limit the amount of medically necessary therapy, for the most part.

The February congressional budget deal eases long-standing concerns by lifting a threat that some types of therapy might be restricted. But potential barriers to accessing this type of care remain. Here’s a look at how Medicare now covers such services.

Medical necessity. All therapy covered by Medicare must be deemed “reasonable and necessary to treat the individual’s illness or injury,” require the services of skilled professionals and be subject to medical oversight.

What isn’t a precondition for receiving services is ongoing improvement — getting measurably better. While this can be a goal for therapy, other goals can include maintaining a person’s current abilities or preventing deterioration, according to a groundbreaking legal settlement in 2013.

The implication for older adults: If your therapist claims that she can’t help you any longer because you aren’t making substantial progress, you may well have grounds for an appeal. At the very least, a discussion with your physician about reasonable goals for therapy is advisable.

Part A therapy services. Often, older adults require therapy after an untoward event brings them to the hospital — for instance, a stroke or a bad fall. If a senior has an inpatient stay in the hospital of at least three days, he or she becomes eligible for up to 100 days of rehabilitation, including therapy, in a skilled nursing facility under Medicare Part A.

Therapy services covered by Medicare Part A also can be obtained in an inpatient, hospital-based rehabilitation facility. In this setting, requirements call for therapy to be “intensive” — at least three hours a day, five days a week. Stays are covered by Medicare up to a maximum 90 days.

If a senior returns home after being in the hospital, he or she may receive therapy from a home health agency under Medicare Part A. To qualify for home health care, an older adult must need intermittent skilled services, such as those provided by a registered nurse or physical therapist, and be substantially homebound. Each episode of home health care can last up to 60 days and be renewed with a physician’s authorization.

“A lot of home health agencies believe, wrongly, that the home health benefit, including therapy services, is limited in duration to a couple of 60-day episodes,” said David Lipschutz, senior policy attorney at the Center for Medicare Advocacy. The bottom line for beneficiaries: You may have to advocate aggressively for the care you think you need and enlist your physician to intervene on your behalf.

Part B services. Physical, speech and occupational therapy are also covered by Medicare Part B in private practices, hospital outpatient clinics, skilled nursing facilities (when a patient’s Part A benefits have run out) and, less frequently, in people’s homes (when individuals no longer qualify for Part A home health services but still need assistance).

More than 5 million older adults and people with disabilities covered by Medicare receive “outpatient” therapy services of this kind each year. Care can last up to 90 days, with the potential for renewal if a physician certifies that ongoing services are necessary.

Questions about coverage for Part B therapy services have surfaced repeatedly since Congress authorized annual limits on the care that Medicare would cover in 1997 — a cost-saving move.

Faced with criticism, Congress delayed implementation of these “caps” for several years. Then, in 2006, it created an “exceptions” process that allowed caps to be exceeded, so long as therapy was judged to be medically necessary.

The exceptions process had two steps. First, a therapist had to request that services be extended when a patient reached an initial “cap” — set this year at $2,010. Then, another request had to be made when a patient reached another, higher threshold — initially set at $3,700 this year, but reduced to $3,000 in the budget legislation. (There is a $3,000 threshold for physical and speech therapy, combined, and a separate $3,000 threshold for occupational therapy.)

Both steps called for therapists to justify additional services by providing extra documentation. At the second, higher threshold, therapists also faced the prospect of intensive medical review of their practices and, potentially, audits.

At that point, therapists were often hesitant to pursue exceptions, which has made it difficult for patients with complex medical conditions to access care. Also, sometimes requests for exceptions have been denied, posing another barrier.

“We use the exceptions process, but we’ve tried to be very vigilant in who we used it for,” said Sarah Gallagher, a physical therapist at South Valley Physical Therapy in Denver, which specializes in treating people with complicated neurological conditions. “The risk is putting your clinic at risk for an audit if you ask for exceptions too often.”

With February’s budget deal, Medicare has gotten rid of the “caps” but retained the notion of “thresholds.” After billing for $2,010 in services (about 20 therapy sessions at $100 per visit) this year, a provider has to add an extra code to a bill. After billing $3,000, targeted medical reviews and the potential for audits can again be prompted.

Eliminating the caps should make things easier for older adults who need a time-limited course of therapy.  But whether therapists will be wary about approaching the $3,000 threshold, with its extra administrative burdens and potential risks, remains to be seen. If so, patients recovering from strokes or brain injuries and those with complicated chronic conditions, who need intensive therapy for an extended period, could be affected.

“We fear that there still might be barriers to accessing care,” said Lipschutz, of the Center for Medicare Advocacy. “We suspect some providers will say I don’t want to deal with this process, and if I’m getting anywhere near that $3,000 threshold, I’m just going to give it up.”

“Theoretically, all the uncertainty we’ve been living with, related to the therapy caps and acceptable goals of therapy, has been resolved,” said Kimberly Calder, senior director of health policy at the National Multiple Sclerosis Society. “But only time will tell.”

KFF Health News' coverage of these topics is supported by John A. Hartford Foundation and The SCAN Foundation