Medicare 2026

Medicare Has No Cap on Physical Therapy — Here's What the $2,480 Threshold Means in 2026

Many people still believe Medicare limits how much physical therapy it will pay for in a year. That hasn't been true since 2018, when Congress repealed the old outpatient therapy caps. What remains is a paperwork threshold — not a dollar limit on your care. Here's what the numbers you may hear about actually mean, and what to expect when you need ongoing therapy.

No annual cap on therapy

Under Part B, Medicare pays for medically necessary outpatient physical therapy (PT), occupational therapy (OT), and speech-language pathology (SLP). After you meet the Part B deductible — $283 in 2026 — you pay 20 percent of the Medicare-approved amount, and Medicare pays the rest. There is no annual ceiling on the total Medicare will pay, as long as the services are medically necessary and properly documented.

This hasn't always been the case. For years, Medicare applied hard dollar caps to outpatient therapy. Section 50202 of the Bipartisan Budget Act of 2018 repealed those caps and the exceptions process that came with them. The old dollar amounts, however, didn't disappear. They live on as administrative thresholds that trigger extra documentation — not as limits on how much therapy you can receive.

What the $2,480 threshold really is

For 2026, when your outpatient therapy charges reach $2,480 for PT and SLP combined, or a separate $2,480 for OT, your provider must add what's called a KX modifier to the claim. That modifier is the provider's attestation that the services remain medically necessary and that the medical record supports it. The threshold is indexed each year, so the amount changes over time.

If a provider submits claims above the threshold without the KX modifier, Medicare will deny them. Importantly, CMS says you keep limitation-of-liability protections when services are denied for certain reasons, including a missing KX modifier — meaning you generally aren't on the hook for the bill just because your provider left off a piece of paperwork.

A separate targeted medical review threshold sits at $3,000 for PT and SLP combined and $3,000 for OT. This amount is set in law through 2027, with annual indexing beginning in 2028. Crossing it does not mean your claims will be reviewed — not every claim above $3,000 is examined — but it does mean some claims may be selected for a closer look.

Who can order therapy, and when you can be billed

Medicare requires a doctor or another qualified health care provider — including a nurse practitioner, clinical nurse specialist, or physician assistant — to certify that you need the therapy. That certification, combined with the therapist's documentation, is what supports medical necessity.

If your provider believes a service isn't medically necessary and wants the option to bill you directly, they must give you an Advance Beneficiary Notice of Noncoverage (ABN) in writing before the services are delivered. The ABN explains why Medicare may not pay and gives you a choice about whether to proceed. A provider cannot hand you an ABN simply because your therapy spending has reached some dollar amount. Reaching the KX threshold is not, by itself, a reason to shift costs to you.

Telehealth therapy through 2027

CMS states that section 6209 of the Consolidated Appropriations Act, 2026 extended the ability of physical therapists, occupational therapists, and speech-language pathologists to furnish Medicare telehealth services through December 31, 2027. If getting to a clinic is difficult, ask whether telehealth visits are appropriate for your plan of care.

How this fits with your coverage choices

How you pay the 20 percent coinsurance depends on how you've put your Medicare together. With Original Medicare plus a Medigap policy, the supplement may cover some or all of that coinsurance, and you can generally see any provider who accepts Medicare — in exchange for the Medigap premium. With a Medicare Advantage plan, cost sharing for therapy is set by the plan, which may use copays and network rules; out-of-pocket maximums apply, but you typically need to use the plan's network and follow its referral rules. Neither approach is "better" — the trade-offs are different, and the right fit depends on your health, budget, and preferences.

Dates and dollar figures to keep in mind

A few national numbers worth knowing as you plan:

• The Part D out-of-pocket cap is $2,100 in 2026 and $2,400 in 2027.
• The most any Part D plan may charge as a deductible in 2027 is $700.
• The Part D base beneficiary premium for 2027 is $41.33, a national figure used to calculate the late-enrollment penalty; actual plan premiums are set plan by plan.
• Annual Enrollment for 2027 runs October 15 – December 7, 2026, with choices taking effect January 1, 2027.
• Social Security announced a 3.6 percent cost-of-living adjustment for benefits payable beginning January 2027.

The 2027 Part B standard premium and deductible, and the 2027 IRMAA income brackets, have not yet been announced. CMS typically releases those figures in the fall.

If you have Medicaid or Extra Help

Since 2025, people with Medicaid or Extra Help have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch stand-alone Part D plans. Full-benefit dual-eligible individuals can also join an integrated D-SNP in any month.

Where to go next

The bottom line on therapy: if your clinician documents that care is medically necessary, Medicare keeps paying — there is no annual dollar cap. The thresholds are about paperwork, not permission.

For official information and plan details, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), TTY 1-877-486-2048, 24 hours a day, 7 days a week.