Does Medicare Pay for Rehabilitation?

Medicare, the federal health insurance program for seniors over 65, typically provides benefits for rehabilitation services only in specific circumstances. Generally, rehabilitation services are covered under Medicare Part A, but only in relation to a qualifying hospital event and only for a limited amount of time.

Acute Versus Chronic Medical Conditions

• An acute medical condition can be severe or mild, but it is a condition that is expected to improve with time or treatment. Physical therapy services and rehabilitation care, or rehab, is designed to bring about a clinical improvement over time, resulting in an improved quality of life, or decreased reliance on medical care or other assistance. A chronic medical condition is one that is not expected to improve with time. Examples include dementia, Alzheimer's's disease, or basic maintenance care for the elderly and feeble. Medicare generally covers care for acute conditions but not for chronic conditions. Benefits for long-term custodial care are extremely limited under Medicare.

Requirements for Rehabilitation

• To qualify for rehabilitative care in an inpatient rehab facility under Medicare, a physician must prescribe at least two different types of therapy for at least three hours per day. The patient must also be an inpatient. Care is reviewed and the rehab stay justified to Medicare on an ongoing basis. The patient must receive care in a Medicare-approved facility. Medicare pays for up to 100 percent of the approved daily amount for as long as the patient needs care.

Nursing Facilities

• Medicare provides coverage for nursing facilities, provided there has been a qualifying hospitalization of three days or more within 30 days prior to entering the nursing facility. Coverage continues until the patient's condition stops improving. At that point, Medicare coverage under part A ceases.

Alternatives

• Medicare coverage for rehab and custodial care is limited. To supplement Medicare, you may wish to retain a long-term care insurance policy, which typically kicks in if the patient loses the ability to perform unassisted at least two common ADLs, or activities of daily living, which include continence, transferring, toileting, eating and other necessary daily tasks. Medicaid also provides long-term custodial and rehab care, but recipients must typically impoverish themselves before qualifying for benefits under Medicaid.