2026 Medicare Reimbursement Changes for Rehab Therapy

CMS just released the proposed 2026 Medicare Physician Fee Schedule (MPFS), and for private practice rehab therapy clinics, the outlook is better than expected. If finalized, this rule could bring the first meaningful increase to Medicare reimbursement for PT, OT, and SLP in several years.

Here’s a breakdown of what’s changing, what’s staying the same, and what practice owners should pay attention to as we head toward 2026.

View Reimbursement Rates by State

Conversion Factor Update: A Long-Awaited Increase

After years of cuts or flat payments, CMS is proposing a 3.83% increase to the conversion factor used to calculate Medicare payments. While not a windfall, it’s a welcome shift that may slightly improve reimbursement for many rehab therapy services.

This increase matters. Most physical, occupational, and speech therapy CPT codes are directly affected by the conversion factor, so any bump—no matter how modest—helps. It’s not often that CMS proposes an increase, so this one is worth noting.

In short:

If finalized, therapy reimbursement may go up in 2026—something we haven’t seen in half a decade.

Efficiency Cuts

The proposed rule includes a 2.5% efficiency adjustment, but it’s aimed at non-time-based procedures—think surgeries or imaging—not so much therapy services.

That means common rehab therapy codes like:

97110 (therapeutic exercise)

97530 (therapeutic activities)

92507 (speech therapy)

...are not subject to this cut. Most therapy services are billed in 15-minute increments and don’t fall under the category CMS is targeting. However, untimed codes such as:

• 97014: Electrical stimulation therapy (unattended)

• 97010: Hot/Cold Packs

• 97012: Mechanical Traction

Could possibly be impacted by this cut.

There is one thing to watch: evaluation codes (like 97161–97163) aren’t timed and might be affected, depending on how CMS finalizes the rule.

Telehealth and Supervision Rules Extended

Another win for therapy providers: CMS is proposing to extend current telehealth and supervision flexibilities through the end of 2026.

This means:

• You can continue to provide general supervision of PTAs and OTAs in private practice settings.

• Select therapy services will remain covered under Medicare’s telehealth list.

• Rules introduced during the pandemic aren’t being rolled back—at least not yet.

If your clinic uses therapy assistants or offers remote care options, these extensions help maintain flexibility without new compliance headaches.

What Private Practice Clinics Should Do Next

Whether your clinic sees mostly Medicare patients or just a few, this proposed rule is worth preparing for. Here’s where to focus:

Monitor the Final Rule

The proposal for 2026 Medicare Reimbursement is not set in stone. CMS will finalize the rule later this year, likely around November 2025. Keep an eye on the final language to confirm whether reimbursement increases and code-specific changes go through as proposed.

Build Your Budget Around a Modest Increase

If things hold, you can expect a slight bump in Medicare payments in 2026. It's not transformative, but it could help offset rising costs in other areas of your business.

Stay Compliant with MIPS

There are no new therapy-specific MIPS Value Pathways (MVPs) this year, so if you participate in MIPS, you’ll likely continue using the traditional track. The performance threshold remains at 75 points, so you'll need to maintain strong scores to avoid penalties.

Final Thoughts on 2026 Medicare Reimbursement

The 2026 MPFS proposed rule isn’t perfect, but for once, it feels like progress. With a small increase in Medicare reimbursement, protection from broad efficiency cuts, and continued flexibility for telehealth and supervision, the update gives private practice therapy clinics some breathing room.

If you’ve been wondering “Will therapy reimbursement increase in 2026?” or searching for updates on physical therapy reimbursement changes 2026, this is one of the more encouraging policy moves in recent memory.

Looking for specific reimbursement rates in your state. Download and View Reimbursement Rates by State HERE.