Her PT Said Medicare Stops Paying When You Stop Improving. A Federal Court Forced CMS to Correct That Myth, and Some Clinics Still Use It

A 72-year-old with Parkinson’s finishes her sixth outpatient physical therapy session. The therapist explains that Medicare only pays while she’s improving, her gait scores have leveled off, and today is the last covered visit. If she wants to keep coming, it’s cash from here.

She goes home and looks for the rule. It isn’t there, and it never was.

A Standard That Never Existed

The improvement standard was never in the Medicare statute. It spread anyway, through therapy clinics, home health agencies and the contractors who process claims: if the patient isn’t making measurable gains, end the skilled benefit and call whatever follows maintenance, which Medicare supposedly won’t pay for.

Over a decade ago, beneficiaries with chronic conditions sued, among them people with Parkinson’s, multiple sclerosis, ALS and the lasting effects of stroke. In Jimmo v. Sebelius, a federal court approved a settlement on January 24, 2013 requiring CMS to revise its manuals and confirm that skilled therapy is covered when it’s medically necessary to maintain function or slow decline, improvement or not. CMS rewrote the manuals. Clinics kept applying the old rule anyway, and further court action produced a corrective statement saying plainly that no such standard applies.

What the manual asks now is whether the care requires a licensed therapist’s skill, whether the plan of care has been certified as required, and whether the services are reasonable and necessary. A plateau is not on that list.

Jimmo did not make maintenance therapy unlimited. Coverage still turns on whether the care genuinely needs a qualified therapist’s specialized skill. If you can safely carry out your maintenance program on your own, or with help from someone who isn’t a skilled professional, Medicare can stop paying, and that’s a legitimate reason. The illegitimate reason is the one she was given. “You’ve stopped improving” is not, by itself, grounds for ending coverage.

What You Actually Pay

Original Medicare Part B treats outpatient therapy like a doctor’s visit. You pay the annual Part B deductible, $283 in 2026, then 20% of the Medicare-approved amount per session while Medicare pays the rest. That sits on top of the $202.90 monthly Part B premium.

The gap between that and a cash rate is the whole cost of the myth. A patient paying out of pocket covers the clinic’s full private rate instead of a fifth of an approved one, and on a fixed income facing a Social Security raise tracking in the mid-3% range for 2027, with the official figure due in October, that difference compounds fast.

The Amount That Isn’t a Cap

There’s no annual dollar limit on covered therapy. The old therapy cap was repealed in 2018. What remains is a threshold. For 2026 it’s $2,480, applied to physical therapy and speech-language pathology combined, and separately to occupational therapy. Past it, the clinic attaches a KX modifier confirming the care is medically necessary, and coverage continues. CMS also keeps a $3,000 targeted-review threshold, though claims above it aren’t automatically reviewed.

None of those amounts is a stopping point. They’re paperwork. Medicare Advantage plans are held to the same coverage standard. A plan can deny care on other permissible criteria, but lack of improvement alone isn’t sufficient, and calling the decision utilization review doesn’t change that.

Paper Trail

The paperwork here runs in your favor, which is exactly why a clinic operating on the old rule would rather handle it verbally.

• If the clinic will only continue on a cash basis, ask for an ABN before your next session. That’s Form CMS-R-131, and choosing Option 1 requires the clinic to submit the claim to Medicare so you get a real decision you can appeal. A therapist comfortable saying you’ve plateaued is often less comfortable writing it on a form.
• Appeal, and name Jimmo. CMS keeps a page devoted to the settlement, and the Medicare Benefit Policy Manual is what the contractor has to apply. The first-level redetermination goes to the Medicare Administrative Contractor and costs nothing to file.
• If the clinic won’t bill Medicare, find one that will. Therapists who understand the standard aren’t rare. The Center for Medicare Advocacy publishes model appeal language, and your State Health Insurance Assistance Program counselor will work through the forms with you for free.

The rule her therapist quoted was never official, and a federal court ordered the government to say so. Nobody is required to keep paying as though it survived.

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