Original Medicare (parts A and B) and Medicare Advantage (Part C) cover medically necessary occupational therapy (OT). Medigap can help lower 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. By working with an occupational therapist, you can 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 inpatient 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 2025:

  • $285 to $518 monthly premium, if you have one
  • $1,676 deductible for each benefit period
  • $0 copayment for days 1 to 60 of treatment after you pay your deductible
  • $419 copayment per day for days 61 to 90 of treatment
  • $838 copayment 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 outpatient medical insurance. It covers OT services received during an outpatient visit or appointment with a healthcare professional.

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

Outpatient OT services may be received in person or via telehealth until March 31, 2025. After this period, you must meet certain criteria to receive telehealth OT services.

Here are the basic Part B costs in 2025:

  • $185 monthly premium, dependent on income
  • $257 deductible
  • 20% coinsurance on all Medicare-approved costs during your treatment
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 — $2,410 in 2025.

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

Part C, or Medicare Advantage, bundles inpatient and outpatient 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 type and the insurer. Each plan has a different premium, deductible, copayment, and coinsurance amount.

Staying within your plan’s “network” of healthcare professionals, facilities, and other service 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 Original Medicare.

You can’t enroll in Medigap if you have a Medicare Advantage (Part C) plan.

Medicare will only pay for OT that it considers medically necessary. You’ll need to meet your plan’s deductible and any other applicable out-of-pocket costs.

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

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