2026 Physical Therapy Reimbursement Rates

The 2026 Medicare Physician Fee Schedule brings meaningful changes to the 2026 Physical Therapy reimbursement Rates. Whether you're planning annual revenue projections, renegotiating payer contracts, or training your billing team, understanding the 2026 physical therapy fee schedule is not optional. It's operational.

Here's what changed, what it means for your clinic, and where your revenue exposure sits.

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The 2026 Conversion Factor: A Real Increase, With Caveats

For the first time in Medicare history, CMS established two separate conversion factors for calendar year 2026:

• $33.40 for non-qualifying APM participants (the rate that applies to most outpatient PT clinics)

• $33.57 for qualifying APM participants

These represent increases of 3.26% and 3.77%, respectively, from the 2025 conversion factor of $32.35. That increase was driven largely by a one-time 2.5% statutory update included in Congress's reconciliation package—a number that will not automatically carry into 2027.

The practical takeaway: Despite the headline conversion factor increase, APTA's analysis found that the net reimbursement impact for most physical therapy practices works out to approximately +1.75% once RVU adjustments are factored in. That is a real increase, but a modest one.

View Reimbursement Rates by State

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2026 Physical Therapy Reimbursement Rates: Key CPT Code Rates

The table below reflects national average non-facility rates under the 2026 Medicare fee schedule National MAC Locality . Actual payments vary by geographic locality using CMS's Geographic Practice Cost Indices (GPCIs). Use this database lookup tool for specific states/regions.

CPT Code	Description	2025	2026	$ Change
97110	Therapeutic exercise	$28.70	$29.06	$0.27
97112	Neuromuscular reeducation	$32.03	$32.73	$0.71
97116	Gait training	$28.79	$29.06	$0.27
97140	Manual therapy	$27.17	$27.72	$0.57
97530	Therapeutic activities	$34.61	$35.07	$0.46
97161-97163	PT evaluation	$98.01	$98.20	$0.19

Reimbursement calculation source: CMS Medicare Physician Fee Schedule lookup tool.

View Reimbursement Rates by State

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The Efficiency Adjustment: What It Does and Doesn't Hit

CMS applied a -2.5% efficiency adjustment to the intraservice portion of work RVUs for non-time-based services in 2026. The rationale: CMS argued that efficiencies gained over time in performing these services weren't being reflected in current valuations.

For physical therapy, the critical win here came from APTA advocacy during the final rule comment period. CMS had initially applied the efficiency adjustment incorrectly to a number of timed PT codes. Following APTA's pushback, timed codes—including CPT 97110, 97140, 97530, and 97112—were exempted from the adjustment.

That exemption preserved reimbursement on the procedures that make up the majority of a typical PT clinic's daily billing volume.

Non-timed codes such as evaluations (97161–97163) were subject to the adjustment in the original proposal. Confirm your specific code mix against the CMS efficiency adjustment list before finalizing 2026 projections.

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2026 KX Modifier Threshold: $2,480

When a Medicare patient's cumulative allowed charges for PT and speech-language pathology services combined reach $2,480 in the calendar year, every subsequent claim must carry the KX modifier—or it will be automatically denied. Occupational therapy has a separate $2,480 threshold.

The 2026 threshold increased by $70 from the 2025 level of $2,410. The targeted medical review threshold remains at $3,000 for combined PT and SLP services and is frozen at that level through 2028.

What this means operationally:

• Track each Medicare patient's year-to-date allowed charges in real time—not at month-end

• The moment cumulative PT + SLP charges hit $2,480, append KX to every subsequent claim line

• Appending KX is a clinical attestation that services remain medically necessary—documentation must back it up

• Above $3,000, treat every claim as audit-ready with objective functional measures and a current plan of care

The most common KX failure is a process failure, not a clinical one. Clinics that track this manually in spreadsheets or rely on therapists to flag it are the ones seeing automatic denials pile up in their A/R.

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New Remote Therapeutic Monitoring Codes for 2026

CMS added three new RTM codes effective January 1, 2026, directly addressing a gap that made RTM financially unworkable for shorter treatment episodes:

• CPT 98985 – Device supply for musculoskeletal monitoring, 2–15 days in a 30-day period

• CPT 98984 – Device supply for respiratory monitoring, 2–15 days in a 30-day period

• CPT 98979 – RTM treatment management, first 10 minutes per calendar month (requires at least one real-time interactive communication with the patient or caregiver)

Previously, the only billable RTM device supply codes required 16 or more days of engagement in a 30-day period. A patient who used their device for 12 days generated no billable RTM unit. Under the 2026 physical therapy fee schedule, that partial-month engagement now supports a claim.

CMS also updated descriptors for existing codes 98976 and 98977, which now explicitly cover 16–30 days, eliminating previous ambiguity.

Documentation requirement to flag: CPT 98979 requires that the real-time interactive communication be documented at the time it occurs. Post-dated RTM notes are a consistent audit trigger.

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What the 2026 Changes Mean for Your Practice

The 2026 physical therapy reimbursement landscape is not a crisis, but it does require action in several specific areas:

Update your revenue projections. The +1.75% net increase is real but modest. Model it against your actual code mix before assuming it covers your overhead growth.

Audit your KX threshold tracking process. Manual tracking fails at scale. If your EMR isn't flagging patients approaching $2,480 in real time, build that into your workflow now.

Evaluate RTM program eligibility. The new 2–15 day supply codes open RTM billing to patient populations you couldn't capture before. If your clinic is not yet offering RTM, the 2026 fee schedule makes the economics more favorable.

Check your locality adjustment. National average rates from this post are benchmarks. High-cost metropolitan markets can push payments 20–30% above the national average, while rural rates may run lower. Pull your specific GPCI-adjusted rates from the CMS lookup tool.

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View Reimbursement Rates by State

The 2026 physical therapy reimbursement environment is the most favorable in several years for outpatient PT clinics — but only for practices whose billing operations are efficient enough to capture it. Rate increases don't help if KX modifiers are missed or if timed units are miscalculated. Not sure if your collecting every dollar earned from your billing? See how PatientStudio can help maximize your billing and reimbursement potential.

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