The Medicare physical therapy cap no longer exists as a hard dollar limit. Congress repealed the old cap in the Bipartisan Budget Act of 2018 and replaced it with an annual threshold that, for 2026, sits at $2,480 in combined physical therapy and speech-language pathology charges. Crossing that threshold does not end your coverage. It simply requires your therapist to certify on each subsequent claim that continued treatment is medically necessary.1Centers for Medicare & Medicaid Services. Therapy Services – Section: Implementation of the Bipartisan Budget Act of 20182Centers for Medicare & Medicaid Services. 2026 Annual Update of Per-Beneficiary Threshold Amounts
What Replaced the Old Cap
Before 2018, Medicare stopped paying once your outpatient therapy charges hit a fixed ceiling, with only a narrow exceptions process to keep coverage going. The Bipartisan Budget Act permanently ended that system. In its place, Medicare set softer thresholds that trigger documentation requirements but never cut off payment on their own.1Centers for Medicare & Medicaid Services. Therapy Services – Section: Implementation of the Bipartisan Budget Act of 2018
For 2026, physical therapy and speech-language pathology share one threshold of $2,480. Occupational therapy has its own separate $2,480 threshold, so occupational sessions do not eat into what’s available for physical therapy. The amounts are adjusted each year by the Medicare Economic Index.2Centers for Medicare & Medicaid Services. 2026 Annual Update of Per-Beneficiary Threshold Amounts3Centers for Medicare & Medicaid Services. Medicare Physician Fee Schedule Final Rule Summary CY 2026
The threshold tracks total allowed charges, not what you pay out of pocket. Because physical therapy and speech-language pathology share one bucket, patients getting both types of care reach the line faster.
What Happens at $2,480: The KX Modifier
Once your therapy charges pass $2,480, your provider must add a billing code called the KX modifier to every claim from that point forward. The KX modifier is the therapist’s formal attestation that continued treatment is medically necessary and that clinical records back that up. A claim submitted above the threshold without KX gets denied automatically.1Centers for Medicare & Medicaid Services. Therapy Services – Section: Implementation of the Bipartisan Budget Act of 2018
To use KX legitimately, the therapist’s records must show the care meets the “reasonable and necessary” standard: the treatment is an accepted approach for your condition, it’s complex enough to require a skilled therapist, and the frequency and duration make sense for your diagnosis.4Centers for Medicare & Medicaid Services. Medicare Benefit Policy Manual Chapter 15
Nothing about your visit changes. Your coinsurance stays the same. But if the documentation is thin, a denial can surface weeks later, so it’s reasonable to ask your therapist whether they are tracking your cumulative charges and keeping notes current.
The $3,000 Medical Review Trigger
A second threshold kicks in when total charges reach $3,000. At that point, Medicare may flag your claims for a targeted medical review, in which a Medicare Administrative Contractor pulls the therapist’s clinical records and verifies that treatment was appropriate for the severity of your condition.2Centers for Medicare & Medicaid Services. 2026 Annual Update of Per-Beneficiary Threshold Amounts
Not every claim above $3,000 is reviewed. The process targets providers with unusual billing patterns or high volumes. If the records support the treatment, payment is confirmed. If not, the claim is denied. The $3,000 figure is fixed through 2028, after which it begins adjusting each year with the Medicare Economic Index.2Centers for Medicare & Medicaid Services. 2026 Annual Update of Per-Beneficiary Threshold Amounts
What You Actually Pay
Your cost share does not increase when you cross either threshold. Before Medicare pays anything, you meet the annual Part B deductible, which is $283 in 2026.5Centers for Medicare & Medicaid Services. 2026 Medicare Parts A and B Premiums and Deductibles After that, Medicare pays 80% of the approved amount for each session and you pay the remaining 20%.6Medicare.gov. Physical Therapy Services – Section: Costs
That 20% applies to every session, whether you are below the threshold, above it with the KX modifier, or in the targeted medical review range. A Medigap policy may cover some or all of the coinsurance, depending on the plan.
You Do Not Have to Be Improving
A common reason people worry about a cap is the belief that Medicare only pays for therapy while they are getting measurably better. That’s not the rule. Under the Jimmo v. Sebelius settlement in 2013, CMS confirmed that Medicare covers skilled therapy when a qualified therapist’s judgment and skills are needed to carry out a safe and effective maintenance program, even if the goal is to maintain your current function or slow a decline.7Centers for Medicare & Medicaid Services. Jimmo Settlement
This matters for people with Parkinson’s disease, multiple sclerosis, or advanced arthritis, who often bump into the $2,480 threshold and worry they’ll be cut off. The question is whether skilled care is needed, not whether you are improving. A denial resting on the words “the patient has plateaued” may be appealable.
When You Can and Cannot Be Billed for a Denied Session
If your therapist expects Medicare to deny a session, they must give you a written Advance Beneficiary Notice (ABN) before providing the service. The ABN spells out why a denial is expected, the estimated cost, and your options.8Centers for Medicare & Medicaid Services. Outpatient Therapy Services and Advance Beneficiary Notice of Noncoverage FAQ
The ABN is where liability shifts. If your therapist provides services above the $2,480 threshold and fails to attach the KX modifier, and Medicare denies the claim, the therapist absorbs the cost. They cannot bill you unless a valid ABN was signed first. And when treatment is medically necessary and KX is properly used, the therapist cannot use an ABN to push the bill onto you either. You remain responsible only for the deductible and 20% coinsurance.8Centers for Medicare & Medicaid Services. Outpatient Therapy Services and Advance Beneficiary Notice of Noncoverage FAQ
If You Have Medicare Advantage
The thresholds and KX rules described here apply to Original Medicare. Medicare Advantage plans must cover the same services but are allowed to manage them differently, and most do.9Medicare.gov. Medicare Coverage of Therapy Services The most common difference is prior authorization: many plans require the therapist to submit a treatment plan and get approval before therapy continues past an initial set of visits, and some approve visits in batches. Contact your plan directly for the visit limits, authorization rules, and copay that apply to you.
If a Claim Is Denied
A denied therapy claim appears on your Medicare Summary Notice, which lists the deadline for filing an appeal. Original Medicare uses a five-level appeals process, starting with a redetermination by the Medicare Administrative Contractor that processed the original claim, generally decided within 60 days. If that upholds the denial, a Qualified Independent Contractor conducts a fresh reconsideration. Higher levels include an Administrative Law Judge hearing, Medicare Appeals Council review, and finally federal court.10Centers for Medicare & Medicaid Services. Original Medicare Fee-for-Service Appeals
Most therapy disputes resolve at the first or second level. What decides them is the strength of the clinical documentation showing why the care was medically necessary. If the denial was about incomplete records rather than the therapy itself, your therapist may be able to resubmit with better documentation and resolve the issue without a formal appeal.