Physical Therapy and Insurance: Everything You Need to Know


Will my insurance cover physical therapy? Do I need a referral? How much will physical therapy cost me? Do I need insurance to see a physical therapist? How does physical therapy work with insurance?

These are all common questions that have fairly simple answers. In my experience, no two insurance companies structure their plans in the exact same way, which can make it difficult to provide general answers that are true for every person.

But with this helpful guide and a little bit of work on your end, you’ll have all the information you need to feel completely comfortable making your first physical therapy appointment.

The Basics :: Understanding Insurance Terminology

When it comes to physical therapy, there are seven key insurance terminologies that you first need to understand before diving into your specific insurance plan’s physical therapy benefits:

  1. Insurance Premium

  2. In-network vs out-of-network benefits

  3. Deductible

  4. Co-pay

  5. Co-insurance

  6. Out-of-pocket max

  7. Benefit limit

If you feel you have a good handle on these terms, skip ahead to the next section!

1. Insurance Premium

The insurance premium is fairly straightforward: it’s the amount of money you pay each month to have an active insurance plan.

It’s like a rent check. To have access to an apartment, you must pay an agreed upon amount each month. By the same token, to have access to an insurance plan, you must pay an “insurance premium” each month.

For some people, the insurance premium may be covered, at least in part, by your employer.

2. In-Network vs. Out-of-Network Benefits

Some healthcare providers may be in-network or out-of-network with your insurance company. In essence, this means that a healthcare provider either has a contract with your insurance company (in-network) or does not have a contract with your insurance company (out-of-network).

In general, you will want to maximize in-network appointments and minimize out-of-network appointments as much as possible. This is for two reasons:

  1. Lower healthcare costs per appointment. The contract between your insurance company and healthcare providers (who are in-network) typically establishes a maximum allowable amount that the provider can be paid for a service, which is generally lower than what the healthcare provider would otherwise charge for the service.

  2. Better overall insurance coverage. In general, insurance companies want to reward you for seeing an in-network provider and penalize you for seeing an out-of-network provider. You can expect to receive better insurance coverage when you see an in-network healthcare provider.

3. Deductible

If you don’t understand the meaning of your deductible, you’re not alone. The deductible is probably one of the biggest misunderstood aspects of insurance.

Basically, the deductible is the amount of money you first must pay, in addition to the insurance premium, before your insurance company will begin to pay for covered healthcare appointments.

Screen Shot 2019-01-22 at 8.36.04 AM.png

You may have a high deductible plan (with a lower insurance premium) or a low deductible plan (with a higher insurance premium).

In my experience, only in-network healthcare costs contribute to your deductible. Of course, this depends on how your particular insurance company structures their insurance plans.

If you have a family insurance plan, it is likely that you have both an individual deductible and a family deductible. The individual deductible is specific to your healthcare costs, while the family deductible is a collective deductible among all those enrolled in your family insurance plan. Generally, all in-network appointment charges that the family pays for contributes to the collective family deductible.

For example, Sarah and Jim have a family insurance plan. Each have an individual $500 in-network deductible, and collectively they have a $1000 family in-network deductible. Let’s say Sarah has met her individual $500 deductible for the calendar year, and Jim has met $100 of his individual deductible. Their collective family deductible met would be $600 out of the $1000. When Sarah has another covered healthcare appointment in the calendar year, where the deductible applies, her insurance company should cover the full cost of the appointment, unless she has a co-pay or co-insurance that applies once the deductible is met. Jim, on the other hand, will continue to be responsible for the full cost of his covered appointments, where the deductible applies, until he meets his individual $500 deductible.

4. Co-Pay

Co-pays are fixed amounts that you pay for a particular healthcare service. Co-pays generally contribute to your overall deductible and/or out-of-pocket maximum.

Screen Shot 2019-01-22 at 8.52.18 AM.png

Depending on how your insurance plan is structured, it may be the case that you must first meet a small deductible before your co-pay amount activates. The key phrase to look for if you see both a deductible and co-pay listed is “deductible applies.” This is your indication that you must first meet the listed deductible before your co-pay amount applies to your appointments.

5. Co-Insurance

When a co-insurance applies to a particular healthcare service, it means that your insurance company will cover a certain percentage of an appointment charge and you will be responsible for the remaining amount.

Screen Shot 2019-01-22 at 8.35.20 AM.png

For example, you may have an insurance plan that has a 20% co-insurance for covered in-network physical therapy appointments. This means that you will be responsible for 20% of appointment charges and your insurance will cover 80% of the appointment charge.

Co-insurance benefits generally contribute to your overall deductible and/or out-of-pocket maximum. However, for physical therapy benefits, it’s becoming more common that you must first meet a small deductible before a co-insurance benefit activates.

The key phrase to look for when your benefits list a co-insurance is “deductible applies.” This is your indication that you must first meet the listed deductible before your co-insurance applies to your appointments. Often, insurance companies will list a co-insurance benefit with an asterisk, and you will need to find that asterisk explanation. It is here that insurance companies disclose that a deductible applies to the benefit.

6. Out-of-Pocket Maximum

The out-of-pocket maximum is exactly as it sounds: it is the maximum amount of out-of-pocket expenses that you can expect to pay, in addition to your insurance premium, in a calendar year for your healthcare costs.

Screen Shot 2019-01-22 at 8.50.49 AM.png

Generally, any in-network deductible, co-pays, and co-insurance healthcare charges that you paid throughout the year contribute to your out-of-pocket maximum. Generally, once your out-of-pocket maximum is met for the calendar year, your insurance company will cover the full cost of any additional covered healthcare appointments in the calendar year.

7. Benefit Limit

For certain healthcare services, there are benefit limits. As it applies to physical therapy, a benefit limit is a set number of physical therapy appointments/visits you are allotted in a calendar year. Once you meet this limit, you are no longer eligible for physical therapy benefits. In order to continue physical therapy in the calendar year in this case, you must pay out-of-pocket for your appointments, and you will not be able to submit those out-of-pocket payments for reimbursement by your insurance company.

Generally, 30 physical therapy visits are allotted for physical therapy in a calendar year. Depending on the structure of your insurance plan, it may be the case that those 30 visits are shared between physical therapy, speech therapy, chiropractic, and/or occupational therapy appointments/visits.

In rare cases, you may have no benefit limit for physical therapy, meaning that you have unlimited physical therapy visits in the calendar year. However, all physical therapy services must be deemed medically necessary for coverage, which means that you cannot just simply see a physical therapist for the sake of seeing a physical therapist — there must be a medical reason for your visit.

Will My Insurance Cover Physical Therapy

Now that you have a good grasp on the key insurance terminologies we can dive into whether or not your particular insurance will cover a physical therapy appointment. Each insurance company’s benefits and eligibility for physical therapy may be different for each of their plans.

To determine the physical therapy benefits under your specific insurance plan, you will need to do a little work. Here are a few different options to determine your specific physical therapy benefits:

  1. Login to your insurance member portal online and search for your physical therapy benefits.

  2. Call and speak with a customer representative at your insurance company to ask about your physical therapy benefits. There is usually a number for you to call on the back of your insurance card for these types of questions.

  3. If you would like to work with a specific physical therapist or physical therapy office, call his/her office and ask if you can have assistance in determining your insurance benefits for physical therapy. Our office is always happy to assist individuals who would like to see one of our physical therapists in determining their physical therapy benefits and eligibility through their insurance.

If you would like to work with a specific physical therapist, be sure to find out if that particular physical therapist is in-network or out-of-network with your insurance company as your insurance benefits are likely to be different in that case.

Do I Need a Referral for Physical Therapy?

This is a question that is generally specific to your state. As of 2015, all 50 states have some form of direct access for physical therapy. In states that have relatively unrestricted direct access for physical therapy, it means that you are not required to receive a referral from a primary care provider prior to seeing a physical therapist. The American Physical Therapy Association (APTA) keeps updated information about direct access to physical therapy providers by state on their website.

In Vermont, we are fortunate to have direct access regulations that are relatively unrestricted for physical therapy — with the exception of Medicare. In all states, if you are on Medicare, you are required at the federal level to receive a referral from a primary care provider before you can see a physical therapist, and you must renew this referral every 6 months if your physical therapy treatment extends beyond 6 months from your last primary care referral.

If you are a Vermonter with a Vermont insurance company or an out-of-state insurance company with a network in Vermont, such as BlueCross BlueShield, MVP, Cigna, or Medicaid, you are likely to have direct access to physical therapy; and therefore, you are not required to have a referral for physical therapy.

There are potential healthcare cost savings when you self-refer to a physical therapy provider. For example, if you are on a high deductible plan, it is likely that you will have a bill from a primary care provider for going to them first for a musculoskeletal issue, in which they would simply refer you to a physical therapist. Also, a primary care provider may send you to have an MRI, to see a surgeon, or to receive a cortisone shot for temporary pain relief. You may be able to avoid all of those often unnecessary and ineffective healthcare costs by simply seeing a physical therapist first, especially one that focuses on proper movement and treating the problem, not the symptom.

The need for a physical therapy referral is a creature of insurance. If you go to a cash-based physical therapy practice or simply pay out-of-pocket for physical therapy, the requirements of insurance companies to receive reimbursement or to apply your costs to your deductible no longer apply.

How Much Will Physical Therapy Cost Me?

If you intend to use your insurance to see a physical therapist, to answer this question you will need to do some work to find out your specific insurance plan’s physical therapy benefits. You might already know this information if you followed the steps above to find out if your insurance covers physical therapy.

But, that information may still not give you a picture of what your bill will actually be if you have a deductible or co-insurance that applies. If you have a simple co-pay for physical therapy services, you now know how much physical therapy will cost you, as co-pays are fixed amounts that you will be responsible for per appointment.

If you have a high deductible plan that applies to physical therapy services, you can expect the full allowable amount for in-network physical therapy providers to be push to you until you have met your deductible for the calendar year.

To get a better idea of how much you can expect to pay for a physical therapy appointment with a deductible or co-insurance that applies, it is best if you call the office or practice of the physical therapist you would like to see. The billing individuals should generally have a good idea what the allowable amounts are for your specific insurance company per the contract that your insurance company has with their practice.

If you have a deductible insurance plan, it is possible that you could receive different bills from different physical therapy practices for the same service depending on the differences in how each practice bills your insurance company for the service. That might sound crazy, but consider this:

In a 2018 post on Facebook, a Burlington, VT local expressed his dismay at an almost $2000 bill he received from UVM Medical Center for his 4 or 5 physical therapy appointments. The allowable amount that was agreed upon between his insurance company and UVM Medical Center broke out, in his case, to about $400 per appointment. As a comparison, the highest amount our practice received in the same year for one PT appointment was $173. And that amount is well above our average for physical therapy visits and is only received in rare cases when a patient is being seen for the first time and has a particularly lengthy initial visit.

What’s the drastic difference in costs here?

Good question. We didn’t get to see his bill, so in his case, we can’t know for sure. But we can speculate several things here.

  1. It very well may be the case that the UVM Medical Center physical therapy department is incredibly more savvy in their billing process than our smaller private practice. As one might expect, bigger hospitals have professional billing personnel on staff, whose sole job is to find ways to maximum each departments profits and minimize expenses. These savvy billing techniques employed by bigger hospitals are likely to draw drastic differences in costs between a private practice and the bigger hospital practice.

  2. It’s possible that this particular person could have not had insurance at all, and his bills were UVM Medical Center’s physical therapy out-of-pocket expenses for treatment.

  3. UVM Medical Center could have worked out a better deal with that individual’s insurance company to receive more for physical therapy services — though I find this to be the least likely scenario.

All of this to say, if you’re concerned about potential costs to see a physical therapist, try to find out the practice’s average cost per visit. It’ll give you a good idea of how much you can expect to pay on average to see a physical therapist at their location.

We like to be transparent about our averages, so we’ve broken out how much you could expect to pay at our practice if you have a deductible insurance plan through BlueCross BlueShield of Vermont, MVP, Cigna, Aetna, Medicaid, and Medicare.

Cost at OnTrack Physical Therapy with BlueCross BlueShield of Vermont

At our practice, Vermonters with high deductible plans through BlueCross BlueShield of Vermont can expect their initial physical therapy appointment to be in the range of $143-$173. Any additional appointments beyond the initial appointment will likely be in the range of $60-$119.

If you have a co-insurance BlueCross BlueShield of Vermont plan that applies for physical therapy, you can use these amounts to estimate your expected patient responsibility. For example, if you have a 20% co-insurance, you can expect your initial appointment to be in the range of $28-$35, and any additional appointments to be in the range of $12-$24.

Cost at OnTrack Physical Therapy with MVP

At our practice, individuals with a high deductible plan through MVP can expect very straightforward bills. MVP contracted with our practice to establish a maximum allowable amount per appointment. The initial appointment is capped at $130, and any additional visits are capped at $85.

Cost at OnTrack Physical Therapy with Cigna

At our practice, individuals with a high deductible plan through Cigna can expect their initial physical therapy appointment to be right around $139 and any additional appointments to be approximately $77 per appointment.

Cost at OnTrack Physical Therapy with Aetna

Aetna does not have a network in Vermont; therefore, all Vermont healthcare providers that you see will be out-of-network, and your out-of-network benefits would apply. At our Vermont practice, individuals with a high deductible out-of-network Aetna insurance plan can expect their initial appointment to be around $150-$220 and any additional appointments to be in the range of $80-$120.

Cost at OnTrack Physical Therapy with Medicare or Medicaid

At our practice, in general, patients with Medicare and Medicaid can expect the full cost of their approved physical therapy appointments to be covered by their insurance. In rare cases, a Medicaid insured patient may have a small co-pay for physical therapy, and a Medicare insured patient may be left with a small patient responsibility.

Do I Need Insurance to See A Physical Therapist?

The short answer to this question is no.

In fact, many private physical therapy practices have begun transitioning to cash-based practices, which means that they generally do not accept insurance at all. Rather, they have the patient pay them directly, and they provide the patient with all the information they may need to submit their appointment charge to their insurance company for potential reimbursement.

While our practice accepts insurance, we also have established out-of-pocket fees that patients may elect to pay at their own discretion rather than processing their physical therapy appointments through their insurance company. In some cases, it makes more sense at our practice for a patient to simply pay out-of-pocket when, for example, it is approaching the end of the calendar year, a patient is out-of-network, and the patient has a high deductible that is not close to being met.

Insurance Denials for Physical Therapy

Insurance companies are incentivized to maximize profits and minimize payouts, so it is inevitable that insurance denials for physical therapy services happen.

In general, you can expect to receive an insurance denial for physical therapy when you’ve hit your benefit limit for physical therapy in the calendar year. The benefit limit is generally a hard limit and cannot be challenged.

There are other reasons for a denial for physical therapy treatment, however.

Some insurance companies hire individuals whose sole job is to determine whether or not an individual should receive or continue to receive physical therapy services even when they have not met their benefit limit for the calendar year. This practice acts as a check to verify that the physical therapy treatment you are receiving is medically necessary.

For example, the insurance company, Cigna, exclusively practices this technique to limit physical therapy payouts wherever possible. After an initial 5 visits with a physical therapist, the therapist must submit a PT re-evaluation to request additional visits beyond the 5 initial visits. A “Clinical Quality Evaluator” will then review the PT re-evaluation and determine at their own discretion whether or not they believe physical therapy is right for you. If the designated evaluator does not believe you need physical therapy, they will deny the additional visits.

You’ve been denied physical therapy treatment through your insurance. What recourse do you have at this point?

If you have not met your calendar year benefit limit but have been denied physical therapy treatment, you could try one of several things to be approved for visits:

  1. Have your physical therapist challenge the decision. At our practice, we do this automatically. Our therapists would not submit a request for additional visits if they did not think you needed additional visits to resolve pain or an injury. Occasionally, a therapist will be able to speak with an evaluator to explain your situation in more detail, which may help them to understand why more treatment is medically necessary.

  2. See your primary care provider for a referral for physical therapy. A referral from your primary care provider can usually be enough to communicate to a Clinical Quality Evaluator that your physical therapy treatment is medically necessary.

  3. Continue physical therapy and pay out-of-pocket. While not ideal, continuing physical therapy could prevent more expensive healthcare costs, such as surgery or temporary pain relief shots, in the future. This is a decision to be made at your own discretion, and you should step back and consider the whole picture. If you’ve been seeing a physical therapist with little or no improvement because the therapist is simply treating symptoms and not the problem, continuing physical therapy doesn’t make sense, regardless of insurance coverage.

If you have met your benefit limit for the year, there is no harm in asking your insurance company if there is any way to receive additional physical therapy treatment in the calendar year. But, in all likeliness, the benefit limit will be a hard limit (only in rare cases do insurance companies permit additional visits beyond your benefit limit). At this point, you’re only option to continue to receive physical therapy treatment is to pay out of pocket until the next calendar year begins.

How Does Physical Therapy Work with Insurance

Many people who walk into our office think that they can just give us their insurance card, and we will be able to tell them exactly how much they will need to pay for their appointment. While that may be true for those individuals with co-pays that apply for physical therapy services, it is certainly not true for all.

As you might have realized in reading the sections above, insurance complicates the billing process. While providers can give you their best estimate of your cost based on previous insurance responses, it is ultimately your insurance company that has the final say in how much money a provider will receive for a service (based on their mutual contract) and how much patient responsibility will be applied to each appointment (based on the details of your insurance plan with them).

So, how exactly does physical therapy work with insurance?

Here is what an overly-simplified insurance billing process looks like for healthcare providers:

  1. Provider verifies that you have an active insurance policy

  2. Provider provides you with treatment

  3. Provider completes appropriate insurance paperwork

  4. Provider submits insurance paperwork to your insurance company

    * Typically 1-6 Week Delay *

  5. Provider receives response from your insurance company

  6. Provider bills you for any patient responsibility per insurance company’s response

These 6 steps are incredibly over-simplified, and the reality is that the process may not be the same every time due to a multiplicity of reasons that are, frankly, boring and not worth your time.

But, I’ll leave you with this. Have you ever wondered why healthcare costs are so expensive in the USA compared to other countries? For-profit insurance companies certainly share a portion of the blame. Insurance companies hire personnel to mitigate payouts for services rendered. As a result, healthcare providers, by necessity, hire personnel like myself to deal solely with insurance claims to make sure they are getting paid for the services they render. Ultimately, these profit maximization practices by for-profit insurance companies increase the cost of providing healthcare services to individuals like yourself.