Medicare Denied Physical Therapy Claim
Does your notice say something like this?
"Therapy services are not medically necessary"
"The information does not support this many services"
"These services are not covered because you have reached the benefit limit"
"The documentation does not support the need for continued therapy"
If so, you're in the right place. Here's what it means and what to do.
What This Means
Medicare denied coverage for your physical therapy (PT), occupational therapy (OT), or speech-language pathology (SLP) services. This means Medicare will not pay for some or all of the therapy your doctor or therapist prescribed.
Therapy denials are one of the most commonly appealed Medicare issues — and for good reason. Many of these denials are based on outdated rules or incorrect application of coverage guidelines.
Why This Happens
- Medicare says therapy is “no longer medically necessary.” This is the most common reason. Medicare (or your MA plan) may decide that you have made enough progress and no longer need skilled therapy. However, this determination is sometimes made incorrectly, especially for people with chronic or progressive conditions.
- You were denied because you are “not improving.” This reason is legally wrong under the Jimmo v. Sebelius settlement. In 2013, a federal court confirmed that Medicare must cover skilled therapy to maintain your condition or slow decline — even if you are not getting better. Despite this, some claims are still wrongly denied on this basis.
- The claim exceeded frequency or visit limits. CARC code 151 means the payer believes the documentation does not support the number of therapy visits billed. This can happen if your visits exceed what the payer considers typical for your diagnosis, even if your therapist believes they are necessary.
- Your Medicare Advantage plan denied prior authorization. Many MA plans require pre-approval for therapy services, especially after a certain number of visits. If the plan did not approve continued therapy, the claim is denied.
- Documentation did not support medical necessity. Even when therapy is truly needed, the claim can be denied if the therapist’s notes do not clearly explain what skilled services are being provided and why they are necessary. Generic notes like “patient tolerated treatment well” may not be enough.
Should You Appeal?
Appeal outlook: Strong
Therapy denials are among the most successfully appealed Medicare claims. Here is why:
- The Jimmo v. Sebelius settlement is the law. If your denial says you are “not improving,” have “reached maximum benefit,” or “plateaued,” you have strong legal grounds for appeal. Medicare is required to cover skilled therapy for maintenance — this was settled in federal court in 2013.
- Therapy caps are gone. Congress permanently removed annual therapy caps in 2018. If you are told you hit a dollar limit, that is incorrect for Original Medicare. (Some MA plans may still apply visit limits, but they must provide at least the same level of coverage as Original Medicare.)
- Over 80% of appealed MA denials are overturned. According to KFF data from 2024, the vast majority of prior authorization appeals in Medicare Advantage result in the denial being reversed. Most people simply do not appeal.
- Your therapist’s documentation is your best weapon. A detailed letter from your therapist explaining the skilled services provided, the goals of treatment, and why continued therapy is medically necessary can make a strong case.
What To Do Next
- Read your denial notice carefully. Identify the specific reason for the denial. The reason determines your appeal strategy.
- Talk to your therapist. Ask your PT, OT, or SLP whether they believe you still need skilled therapy. If they do, ask them to write a detailed letter explaining:
- What skilled services they are providing
- Why a trained therapist (not a caregiver) must perform or supervise these services
- What would happen to your condition without therapy
- Your therapy goals — which can include maintaining your current function, not just improving
- Know your rights under Jimmo v. Sebelius. If your denial mentions “improvement” or “maximum benefit,” include a reference to the Jimmo settlement in your appeal. You can find fact sheets at CMS’s Jimmo Settlement page and the Center for Medicare Advocacy’s Jimmo FAQ.
- File an appeal within the deadline. Submit your appeal with your therapist’s letter, relevant medical records, and any reference to the Jimmo settlement or therapy cap repeal that applies to your situation.
- If your MA plan set a visit limit, point out in your appeal that Original Medicare does not have therapy caps and that MA plans must cover at least what Original Medicare covers.
- Get free help. Contact your State Health Insurance Assistance Program (SHIP) or call 1-800-MEDICARE (1-800-633-4227). The Center for Medicare Advocacy’s therapy toolkit has detailed appeal resources.
Sources
- CMS: Jimmo Settlement — official settlement information confirming maintenance therapy coverage
- Center for Medicare Advocacy: Jimmo v. Sebelius FAQ — detailed explanation of your rights
- Center for Medicare Advocacy: Toolkit for Medicare Outpatient Therapy and Jimmo — appeal resources and sample letters
- CMS: Therapy Services — billing and coverage rules after therapy cap repeal
- KFF: Medicare Advantage Prior Authorization Determinations (2024) — appeal overturn data
- Center for Medicare Advocacy: Congress Repeals Therapy Caps — background on the 2018 cap repeal
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Appeal Deadlines — Check Your Notice for Exact Dates
Original Medicare
120 days from the date on your MSN
Medicare Advantage
At least 60 days (check your denial notice for exact deadline)
Not sure which you have? Check the top of your denial notice. If it names a private insurance company (like Humana, UnitedHealthcare, or Aetna), you have Medicare Advantage. If it says "Centers for Medicare & Medicaid Services," you have Original Medicare.
Frequently Asked Questions
Can Medicare deny therapy because I'm not getting better?
No. Under the Jimmo v. Sebelius settlement (2013), Medicare must cover skilled therapy services even if you are not expected to improve. If you need a skilled therapist to maintain your current abilities, slow your decline, or keep your condition from getting worse, that therapy should be covered. If your denial says you are 'not improving' or have 'reached maximum benefit,' you have strong grounds for an appeal.
Are there still therapy caps under Medicare?
No. Congress permanently eliminated Medicare therapy caps in the Bipartisan Budget Act of 2018. There is no longer a dollar limit on how much therapy Medicare will pay for in a year. However, if your therapy costs exceed a certain threshold (currently around $2,330 for PT and SLP combined, and $2,330 for OT), your claims may be reviewed more closely to confirm medical necessity. Some Medicare Advantage plans may still apply their own limits.
What if my Medicare Advantage plan says I've used up my therapy visits?
Medicare Advantage plans must cover at least as much as Original Medicare. Since Original Medicare no longer has therapy caps, your MA plan cannot impose an annual dollar cap. However, some plans may require prior authorization for additional visits. If your plan denies therapy, ask for the specific reason and file an appeal with supporting documentation from your therapist.
What does 'maintenance therapy' mean?
Maintenance therapy is skilled therapy that helps you keep abilities you already have, rather than regaining lost abilities. For example, a physical therapist working with a patient who has multiple sclerosis to prevent falls and maintain mobility is providing maintenance therapy. This is covered by Medicare when a skilled therapist is needed to design or carry out the treatment program.
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This information is for educational purposes only and is not legal or medical advice. Always verify with your doctor's office and insurance company.