Medicare covers outpatient rehabilitation after surgery such as a knee replacement up to a monetary therapy cap limit, reports Medicare. If a therapist provides documentation that demonstrates ongoing treatment is medically necessary, Medicare continues to pay for rehabilitation past the therapy cap limit.
As of 2015, the therapy cap is $1,940 for physical therapy and another $1,940 for occupational therapy, according to Medicare. The amount is subject to Medicare Part B deductible and 20 percent copay. If a therapist details the need for continuing treatment in writing on a patient's medical record and Medicare claim, Medicare continues to provide coverage. If the separate amounts for physical and occupational therapy go above $3,700, a Medicare contractor goes over the patient's medical records to confirm that the rehabilitation is medically necessary. If Medicare has not yet approved continuing therapy, the therapist must have the patient sign an Advance Beneficiary Notice of Noncoverage, indicating that the therapy may not be necessary and the patient may have to pay the full amount.
Physical therapy covered by Medicare may take place in hospital outpatient departments, critical access hospitals, private therapists' offices and outpatient rehabilitation facilities, states Medicare. Patients can also receive outpatient rehabilitation treatment in skilled nursing facilities or at home from private therapists or home health agencies.