How Rehab Therapy Revenue Cycles Are Evolving in 2026

In 2026, rehab therapy clinic leaders are asked to do the impossible: protect their practice’s margins at a time when payers are adding more layers of admin and greater requirements, patients  (fairly) want an easier billing and payment process, and staffing challenges make it harder to keep things running smoothly all the time. In this environment, revenue cycle management (RCM) can’t be an afterthought, and having an efficient, effective back-office operation is no longer a luxury but a necessity.   

To that end, we’re seeing a shift in how RCM operates as practices try to work within the existing administrative structure that exists (even as the powers that be look to simplify it, hopefully.) Here’s how RCM will continue to change into this year. 

New CMS regulations could simplify commercial payer prior authorizations—and bring them to Medicare.  

Sadly, we can’t report that prior authorizations are being jettisoned to the dustbin of history, but there’s some hope that they could at least get a little easier to manage. In early 2024, the Center for Medicare and Medicaid Services (CMS) announced an initiative to streamline the prior authorization process, mandating faster decisions and greater efficiency, with the timeline for implementing those changes falling in 2026.  

Since that announcement, we’ve also seen CMS roll out the Wasteful and Inappropriate Service Reduction (WISeR) Model, which essentially introduces prior authorizations to the Medicare program—albeit for a limited number of services and only a few pilot states so far (New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington). 

AI and automation are simplifying RCM for providers—and adding hurdles for payers.

As AI continues to grow, we’re seeing it introduced into more administrative and technical functions within healthcare, including the RCM process for both providers and payers.  For practices, AI is proving incredibly useful in every step in the cycle, from checking documentation and coding for potential errors through to payment posting, automating tasks to free up your billing team to tackle the things that require their critical thinking.  

On the payer side, AI is being leveraged for prior authorizations and utilization management, which is concerning without more transparency or a better understanding of how the AI is operating in those functions and what safeguards exist to correct errors. The broader worry for patients and providers alike is that the system is designed to say no—not unlike the current setup, some might argue—but in the immediate term,  using both AI and your own clinical insights to maximize documentation quality and submission completeness are more important than ever. 

Denial prevention is replacing denial management.

“An ounce of prevention is worth a pound of cure,” as the saying goes, and that’s probably never more true than when it comes to avoiding claim denials. Unfortunately, too many practices have made it a habit to be reactive rather than proactive; their billing and RCM operations are configured around solving problems and working denials rather than preventing them in the first place. 

In the current economic climate for rehab therapists, clinics simply can’t afford to be reactive anymore. The time your team spends working denials could be better spent on submitting new claims or working on existing A/R and collections. 

This is where AI is proving useful for clinics that have integrated it into their workflows. It’s faster and better at catching issues earlier in the process, like missing or inconsistent documentation elements that payers use to determine medical necessity so claims can get fixed before they’re submitted.    

Payment posting and correspondence are becoming automation-first.

The promise of automation is that it will free us from the repetitive tasks that are usually not the best use of our valuable time, especially at a rehab therapy clinic, where schedules are tight. Your team is probably spending too many hours trying to match EOBs or manually posting payments, when automation is better suited for the task. As AI continues to improve, we’ll see greater use in processing documents to extract key data, as well as sorting and categorization, and kicking off workflows to prompt your staff for the required tasks.  

Patient billing is becoming part of the patient experience.

We can’t forget patients as part of the revenue cycle process; while billing payers is the main focus of billers’ time and effort, collecting on patient responsibility is a big part of creating a financially strong practice. And if there’s one thing that patients want and value, it’s clarity and ease when it comes to paying their share. From an RCM perspective, that means improving eligibility and benefits verifications workflows for faster answers, reducing denials to offer more predictability into patient responsibility, and cutting the time between treatment, claim submission, and resolution so statements aren’t arriving months later.  Patients may love the care they receive from you, but if they’re having to constantly fret over out-of-pocket costs, they may look for a practice that offers greater cost certainty.  

Here’s where practices need to focus in 2026.

So what can you do to brace your clinic against the shifting tides of RCM in this year and beyond? Efficiency is key, yes, but it has to be paired with getting things right. You want to be able to submit cleaner claims faster, and you want documentation and coding that’s airtight against whatever tools and trends emerge. And you need greater visibility into your claims and collections at every point in the process to see where revenue is being lost, or at least held up. That means you need to employ the right technology—or the right team—to maximize your billing operation’s efforts and to collect on every dollar you’re owed.