Medicare Coverage of Occupational Therapy

Occupational therapy, provided on an outpatient basis, serves to help a patient learn how to safely manage activities of daily life, such as grooming, cooking, and eating, usually while recovering from an illness, injury, or procedure.

Medicare Part B covers a limited amount of occupational therapy, provided on an outpatient basis in a doctor’s or therapist’s office, rehabilitation facility, clinic, hospital outpatient department, or patient’s home. The therapy must be prescribed and regularly reviewed by a doctor, and it must be provided by a Medicare-certified therapist.

Medicare Part A or Part B also covers occupational therapy as part of comprehensive in-home care provided by a Medicare-approved home healthcare agency.

If you have a Medicare Part C plan: Medicare Part C Medicare Advantage plans, also called a Medicare Advantage plan, must cover everything that’s included in original Medicare Part A and Part B coverage. Sometimes a Part C plan covers more, with extra services or an expanded amount of coverage. (Co-payments for Part C plans may also be different than those for Part A or Part B.) To find out whether your plan provides extra coverage or requires different co-payments for occupational therapy, contact the plan provider directly.

Medicare Part B pays 80 percent of the Medicare-approved amount for covered occupational therapy provided independently of home healthcare. While there used to be a yearly cap of $1,840 on total Medicare payments for occupational therapy provided in any setting other than a hospital outpatient department, Medicare now does not impose any limits on how much it will pay for medically necessary occupational therapy services within one calendar year. There was already no yearly limit for therapy at a hospital outpatient department.

Medicare Part A or Part B pays 100 percent of the cost for Medicare-covered in-home care provided by a home healthcare agency (including occupational therapy). There’s no yearly limit on the amount Medicare will pay for covered in-home care.

Important: Regardless of the rules regarding any particular type of care, in order for Medicare Part A, Medicare Part B, or a Medicare Part C plan to provide coverage, the care must meet two basic requirements:

• The care must be “medically necessary.” This means that it must be ordered or prescribed by a licensed physician or another authorized medical provider, and that Medicare (or a Medicare Part C plan) agrees that the care is necessary and proper. For help getting your care covered, see FAQ: How Can I Increase the Odds That Medicare Will Cover My Medical Service?
• The care must be performed or delivered by a healthcare provider who participates in Medicare.