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Understanding Medicare and What it Pays For

Most people I talk to who have Medicare health insurance are unclear what kind of coverage they have and how to use it. In this post I will talk about what Medicare is, the different coverage choices, and how to use Medicare Part B health insurance to pay for outpatient in the home stroke rehabilitation.

Medicare is a federal health insurance program for people who are 65 and older, certain younger people with disabilities, and people with End-Stage Renal Disease.

Before we get into what coverage choices this health insurance program has to offer, it is important to understand the 3 main Parts to it.

Part A – Hospital insurance

Includes inpatient hospital stays, any care while at a skilled nursing facility, hospice care, and some home health care. Most people do not have to pay a monthly premium for Part A as long as they or their spouse paid Medicare taxes for a certain amount of time while working.

Part B – Medicare Insurance

Covers certain doctor services, outpatient care, medical supplies, and preventative services like vaccines. Most people will pay a monthly Part B premium of $148.50 as of 2021. In addition to paying the monthly premium you will also pay a yearly deductible of $203 in 2021. After you meet your deductible you will typically pay 20% co-insurance for the cost of Medicare-approved services.

Part D - Prescription Drug Coverage

Helps to cover the cost of prescription drugs.

3 Medicare Coverage Choices

There are 3 different coverage choices with varying degrees of coverage but generally each of the 3 Medicare coverage choices include the following:

Original Medicare

Which includes Part A (hospital) and Part B (Medical) insurances. You can also add Part D (drug coverage) as a separate plan.

Medicare Advantage

Medicare refers to this plan as an “all in one” alternative to Medicare. It usually includes Part A, Part B, and Part D. Most of these plans include other benefits that original Medicare doesn’t – like hearing, dental, and vision. Medicare advantage plans have yearly contracts with Medicare. Also known as Part C for some reason.


A supplement insurance policy that helps pay for the remaining health care costs like copayments, coinsurance, and deductibles.

You can learn more about your Medicare Coverage Choice Options here

How to Use Your Medicare Part B Benefits

If you wish to receive occupational, physical, and/or speech therapy services and have not been hospitalized you can use your Medicare Part B insurance to pay for most of your Medicare-approved therapy.

You have 2 choices to use on therapy. Either you can go to an outpatient clinic to receive outpatient therapy services or you can find a Medicare enrolled mobile therapist to come to your house and provide outpatient in the home therapy services. Whatever choice you decide on, I strongly recommend picking a clinic or mobile therapist who specializes in your condition.

Okay so let's say you have decided to seek out therapy and have found a therapist who has specialized in your condition. What's next?

First you would schedule a therapy evaluation to identify your deficits and create goals for therapy. Then you would meet for the evaluation and complete it along with your first treatment session. Depending on your condition and the Medicare guidelines you will be approved for X number of visits to reach your goals.

Your therapist will bill Medicare for the services provided and you will receive a bill from Medicare to pay until your deductible of $203 was met that year. Once the deductible has been met, any Part B services you receive that year will only cost you 20% of total cost of service. This 20% is to be paid to your mobile therapist or the outpatient facility at the time of service. For example, a standard Medicare-approved occupational therapy session is between 45-60 minutes and would run you about $20-35 a visit depending on your state and type of visit.

It is important to note that as a Part B insurer you have a cap on therapy services each year. In 2021 it is $2,110 a year to spend on outpatient occupational therapy services and a separate cap of $2,110 a year to spend on outpatient physical therapy and speech therapy services combined. Once you have met your cap, you will not be able to receive covered therapy services until your cap resets at the beginning of the year.

Covered Services

Generally, for a service to be covered by Medicare Part B you must meet the following criteria:

  • Have a qualifying medical condition.

  • Have an expectation that your condition will improve or benefit significantly in a reasonable period of time.

  • Require the skills of a therapist to treat the condition.

Once your therapist has decided that all of these conditions have been met they are allowed to provided Medicare-approved services to you.

There is a common misconception that Medicare Part B will pay for anything if you qualify to use it. However, this could not be further from the truth. When it comes to therapy, Medicare has a list of covered services and non-covered services. Below is a list of the covered services and non-covered services.

Covered Services

  • Therapy Evaluation

  • Maintenance Therapy Typical for individuals with strokes 1 year or older are considered by Medicare to have limited potential for restoration and function. Typically, only 2-4 visits are allowed for maintenance therapy.

  • Rehabilitative Therapy Typical for individuals with strokes less than 1 year old. Patient must also have expectation of improving significantly in a reasonable about of time. Usually between 4-18 visits are reimbursable depending on if functional improvements being made.

  • Limited Orthotics (Splints) Very few orthotics are reimbursed through insurance.

Non-Covered Services

  • Mass Practice/Forced Use Programs Are popular due to their effectiveness in stroke rehabilitation. However, are not covered due to the high cost associated with these programs.

  • Community Re-Integration/Outings Important for those who live alone with limited supports and need to practice going into the community to remain independent and free of assisted living.

  • Certain Therapeutic Interventions Dry Needling, therapeutic massage, percussion massage, and kinesio taping.

  • Leisure Activity Rehabilitation Such as: golfing, gardening, knitting, fishing, etc

  • Pain Management If you are functionally independent but have pain, Medicare will not pay for therapy for pain management.

  • Fine Tuning of Your Recovery If you are functionally independent but still feel off from your stroke, Medicare will not pay for your services.

  • Individualized Treatment Plans Medicare will not pay for longer therapy sessions (>60 mins) and for your therapist to work with you daily to complete your home exercise program.

Wrap Up

If you have Medicare Part B and need therapy services, it can be a great place to start. However, due to the nature of stroke recovery, it is most likely that Medicare will not pay for enough therapy visits for you to fully recover. At least up front.

If you don't have the money to pay out of pocket for additional stroke rehabilitative therapy after your insurance benefits have run out that's okay. What you can do is find a stroke specialist who is enrolled in Medicare who can work with you for a few visits every few months to continually update your home exercise program and provide you with evidence based recovery strategies. Over time if you put in the work on your own time, you should see the improvements you are looking to make without having to break the bank.


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