A patient in a hospital hallways smiles at her nurse.

Following an injury, surgery, illness, stroke, heart attack, or another medical event, a patient’s doctor(s) may decide that they require short-term rehabilitation. This may be required in order to improve their condition and facilitate their transition back home or to another long-term residence.

Medicare covers a variety of short-term rehabilitation services in a variety of settings. After reading this guide, you will have a better understanding of the Medicare program and what short-term rehab services are covered.

What Is Medicare?

Medicare is the federal health insurance program that provides coverage to seniors age 65 and older as well as qualifying disabled people. According to the Alliance for Retired Americans (ARA), approximately 58.4 million Americans are currently enrolled in the Medicare program (49.3 million seniors and 9.1 million disabled individuals). That number is expected to rise to 79 million by 2030.

The Medicare program is administered by the Centers for Medicare & Medicaid Services (CMS)–a division of the U.S. Department of Health and Human Services (HHS)–and is funded through the Hospital Insurance Trust Fund and the Supplementary Medical Insurance Trust Fund (collectively known as the Medicare Trust Funds).

Who Is Eligible?

In order to qualify for Medicare, an individual 65 years and older must meet the following criteria:

  • They must be a U.S. citizen or a permanent legal resident who has lived in the U.S. for at least five years.
  • They or their spouse must have worked long enough to be eligible for Social Security or railroad retirement benefits (even if they are not yet receiving those benefits).

Government employees or retirees who have not paid into Social Security but have paid Medicare payroll taxes are also eligible.

Individuals under the age of 65 are eligible to receive Medicare benefits if one or more of the following criteria is met:

  • They have been entitled to Social Security disability benefits for at least 24 months.
  • They receive a disability pension from the Railroad Retirement Board and meet certain other requirements.
  • They have amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease.
  • They have permanent kidney failure requiring regular dialysis or have had a kidney transplant and they or their spouse has paid Social Security taxes for a certain period of time (this is different depending on the individual’s age).

Types Of Medicare Coverage

What is covered by Medicare is split into four parts: A, B, C, and D. This guide will focus primarily on Medicare Parts A and B since these are the plans that will cover short-term rehabilitation services; however, the following is a brief overview of the four Medicare coverage options:

Medicare Part A (sometimes called “hospital insurance”) covers an inpatient hospital stay, skilled nursing facility (SNF) care, hospice care, and some home health care services.

Medicare Part B (sometimes called “medical insurance”) covers outpatient skilled care such as doctor’s visits and medical tests.

Medicare Part C (also called “Medicare Advantage Plans”) are Medicare plans that may be purchased through a private insurer. Part C offers the same benefits as traditional Medicare and may also include dental, hearing, vision, and wellness programs. Some Part C plans also include prescription drug coverage (Part D).

Medicare Part D provides prescription drug coverage to Medicare beneficiaries.

It is common for Americans to be automatically enrolled in Medicare Parts A and B when they turn 65 years old, and people are encouraged to make a decision as to whether or not they want to enroll in Part D as soon as they become eligible in order to avoid late enrollment fees.

What Is Short-Term Rehabilitation?

Rehabilitation refers to the process of assisting an individual to recover from a serious injury, illness, surgery, or medical event such as a stroke or heart attack. Rehabilitation may help patients regain strength, relearn skills, or learn new methods of completing tasks.

Depending on the situation, rehabilitation may involve some combination of the following:

  • Physical therapy is designed to help the patient regain their strength, mobility, and physical fitness.
  • Occupational therapy is designed to help the patient with their daily activities.
  • Speech therapy is designed to help the patient with speaking, understanding, reading, writing, and swallowing.
  • Pain management.

Rehabilitation services may be provided in either inpatient or outpatient settings and it is important to keep in mind that the setting in which the care is delivered often affects Medicare coverage.

Inpatient Rehabilitation Facilities

Inpatient rehabilitation facilities (IRFs) are Medicare-approved freestanding rehabilitation hospitals or units within larger hospitals that provide intensive, inpatient rehabilitation services. In order to qualify as an IRF, facilities must meet the Medicare conditions of participation for acute care hospitals and keep a rehabilitation physician on staff among other requirements.

IRFs treat a variety of conditions, including but not limited to the following:

  • Stroke
  • Spinal cord injury
  • Brain injury
  • Congenital deformity
  • Amputation
  • Major multiple trauma
  • Neurological disorders, such as multiple sclerosis and Parkinson’s disease
  • Burns

Medicare Part A covers a variety of services delivered in IRFs for a limited period of time. The following services and supplies are usually covered by Medicare Part A:

Medicare does not cover the following:

  • Private rooms (unless one is deemed medically necessary)
  • Private-duty nursing
  • In-room televisions or phones
  • Slipper socks, razors, and other personal care items

In order for Medicare to cover rehabilitation services in an IRF, a beneficiary’s doctor must determine that the care is medically necessary, meaning the patient requires:

  • Regular access to a doctor (every 2-3 days).
  • 24-hour access to a registered nurse with training or experience in rehabilitation.
  • Intensive therapy (generally at least 3 hours per day).
  • A team of health care providers that includes at least one doctor, one rehabilitation nurse, and one physical therapist.

The beneficiary’s doctor must also believe that rehabilitation will improve their condition enough to allow them to function more independently following their stay.

It is important to keep in mind that Medicare only covers rehabilitation in IRFs for a limited period of time and the days a patient spends in another hospital prior to being transferred to an IRF hospital or unit are included in the benefit period.

Beneficiaries are charged $0 coinsurance for the first 60 days and $335 per day for days 61 through 90. After 90 days, patients begin to use what are known as lifetime reserve days for which patients are charged $670 coinsurance. Beneficiaries have 60 lifetime reserve days over the course of their lifetime. It is also important to note that there is a $1,340 deductible for each benefit period.

Skilled Nursing Facilities For Rehabilitation

Skilled nursing facilities (SNFs) are Medicare-certified facilities that provide skilled nursing, therapies, and other inpatient rehabilitation services. A skilled nursing facility may be a freestanding facility or a unit within a nursing home or hospital.

Nursing home care is delivered by a team of licensed health care professionals which may include:

  • Registered nurses (RNs)
  • Physicians
  • Physical therapists
  • Occupational therapists
  • Speech therapists
  • Audiologists

Medicare Part A covers a variety of rehabilitation services and supplies delivered in an SNF for a limited period of time including:

  • Skilled nursing care
  • Physical therapy (when needed)
  • Occupational therapy (when needed)
  • Speech therapy (when needed)
  • Semi-private rooms
  • Meals
  • Dietary counseling
  • Medical supplies and equipment used in the SNF
  • Medications
  • Medical social services
  • Ambulance transportation to a hospital or other facility when required services are not available at the SNF

In order for Medicare to cover rehabilitation services delivered in an SNF, a beneficiary must meet the following criteria:

  • They must have a qualifying hospital stay (3 consecutive days or longer) in the last 30 days.
  • Their doctor must determine that they require daily skilled nursing care delivered by or supervised by skilled nursing and/or therapy staff.
  • The care must be for a hospital-related medical condition.

It is important to keep in mind that Medicare only covers SNF care for a limited period of time (up to 100 days) and the days a patient spends in the hospital prior to being transferred to an SNF are included in the benefit period.

A patient is charged nothing for covered SNF services for the first 20 days and is charged $167.50 coinsurance per day for the remaining 80 days of the benefit period.

Outpatient Rehabilitation

Medicare Part B covers some outpatient rehabilitation services including physical, occupational, and speech therapy that is deemed medically necessary by a physician.

Outpatient rehabilitation services may be provided in a variety of settings including:

  • Rehabilitation agencies
  • Clinics
  • Public health agencies

As of 2018, Medicare does not place a limit on the amount it will pay for medically-necessary outpatient therapy services per calendar year. But, if the cost of a patient’s therapy reaches $2,010 in one year, their physical therapist may need to add a special code to their therapy claim in order for coverage to continue.

In addition, a Medicare contractor may review a patient’s records to ensure that rehabilitation services were medically necessary if therapy costs exceed $3,000 in one year (as of 2018).

Medicare Part B beneficiaries are charged 20% of the Medicare-approved amount. The Part B deductible of $183 for 2018 also applies.

In-Home Rehabilitation

Medicare Part A and/or Part B will cover some home health services including certain rehabilitation services. The following services are usually covered:

  • Intermittent skilled nursing
  • Physical therapy
  • Occupational therapy and services
  • Speech therapy

Medicare does not cover the following home health services:

  • 24-hour daily in-home care
  • Meal deliveries
  • Homemaker services
  • Personal/custodial care

In order for Medicare to cover home health services, a beneficiary must meet the following criteria:

  • A doctor must certify that they are homebound.
  • A doctor must certify that they require intermittent skilled nursing beyond blood draws and/or physical, occupational, and/or speech therapy.
  • Their care must be ordered, overseen, and regularly reviewed by a doctor.

Medicare covers the entire cost of home health services for eligible beneficiaries; however, under Medicare Part B, beneficiaries must pay 20% out-of-pocket expenses of the cost of durable medical equipment.

FAQs About Medicare Coverage For Short-Term Rehab

1. How do I know if I qualify for Medicare?

Most Americans age 65 and older qualify for Medicare. If you or your spouse is eligible for Social Security or railroad retirement benefits (whether you are currently receiving benefits or not), you qualify. You may determine if/when you are eligible and calculate your premium here.

2. How do I apply for Medicare?

Some people are automatically enrolled in Medicare when they turn 65 years old while others need to apply. This often depends on whether or not you are receiving Social Security benefits.

Those who are not automatically enrolled may apply for Medicare online through the Social Security Administration website.

3. Does Medicare cover long-term care?

Medicare does not cover non-medical (custodial) long-term care if that is the only type of care a person requires; however, Medicare does cover care in a long-term care hospital or SNF, as well as hospice care, respite care, and certain home health services and supplies.

If an individual requires long-term care and has low income and assets, they may be eligible for Medicaid which does cover some or all of the costs of long-term care.