CMS Releases CY 2026 Medicare Physician Fee Schedule Final Rule
On October 31, 2025, The Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) final rule, focused on promoting payment accuracy, significantly reducing unnecessary spending, and improving chronic disease management for Medicare beneficiaries. Below is a summary of issues of particular relevance to therapy services.
Effective Date: January 1, 2026
Conversion Factor (CF) Increase: Two conversion factors were introduced.
The CF for Qualifying Alternative Payment Model participants (QP’s) is $33.57
The CF for Non-QP’s is $33.40. Most therapy organizations fall in this category.
NOTE: This is an increase of 3.26% from CY 2025’s $32.3465 and factors in a 2.5% boost from the One Big Beautiful Bill Act, 0.25% Non-QP update, 0.49% RVU budget neutrality adjustment
New "Efficiency Adjustment" Cut: CMS is finalizing a permanent -2.5% "efficiency adjustment" to the work RVUs for all non-time-based services. This adjustment will be updated and applied every 3 years
Impact: This directly reduces payment for foundational services like initial evaluations and re- evaluations, devaluing the clinical reasoning and diagnostic work of therapists.
Telehealth
Beginning with calendar year 2026, all codes on the List of Telehealth Services (including CPT codes billed by PT, OT, and SLP) are considered "permanent" options for delivery via telehealth.
However, PTs, OTs, and SLPs are not reimbursed for telehealth services post-October 1, 2025. Congressional action is needed to restore this.
In CY 2026 CMS will allow for direct supervision to be conducted virtually using audio/visual synchronous communication technology.
Therapy Thresholds
For CY 2026, the therapy threshold dollar amounts are as follows:
$2,480 for PT/ST combined
$2,480 for OT separately
CY 2026 continues to utilize the $3000 threshold for medical reviews (PT/ST combined, OT separately
For both the therapy cap and medical review thresholds, medical necessity and skilled justification must be documented.
Remote Therapeutic Monitoring (RTM):
Expansion: The RTM framework is significantly expanded with four new CPT codes (98984, 98985, 98986, 98979) to support shorter monitoring periods (2-15 days) and new treatment management options
For CY 2026, four new RTM codes to describe RTM services that describe less than 16 days of data transmission per 30-day period and less than 20 minutes of interactive communication per month for CPT codes 98984, 98985, 98986, and 98979.
CMS also made edits to specify the minimum days of data transmission per 30-day period for CPT codes 98976, 98977, and 98978.
Updated RTM CPT Code Descriptions
98976: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of respiratory system, 16-30 days in a 30-day period.
98977: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of musculoskeletal system, 16-30 days in a 30day period.
98978: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of cognitive behavioral therapy, 16-30 days in a 30-day period.
98979: Remote therapeutic monitoring treatment management services, physician or other qualified health care professional time in a calendar month requiring at least 1 real-time interactive communication with the patient or caregiver during the calendar month; first 10 minutes
98984: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of respiratory system, 2-15 days in a 30-day period
98985: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of musculoskeletal system, 2-15 days in a 30-day period
98986: Remote therapeutic monitoring (eg, therapy adherence, therapy response, digital therapeutic intervention); device(s) supply for data access or data transmissions to support monitoring of cognitive behavioral therapy, 2-15 days in a 30-day period
Other CY 2026 RTM CPT Code Updates
98980 2026 RVU is 1.61 vs the 2025 RVU of 1.55 and final payment is $53.77
98981 2026 RVU is 1.23 vs the 2025 RVU of 1.21 and final payment is $41.80
Physical Therapy (PT) is commonly seen as a solution that most patients require after serious injury occurs. However, here at Powerback Rehab, we know firsthand that the use of PT goes well beyond the scope of simple injury recovery.
