What the 2026 Final Rule Means for Rehab Therapists

Usually, the surprises doled out on October 31 come from costumed monsters popping out of the dark, so it was certainly a jolt to see CMS release the 2026 final rule, more or less on time, in the midst of the government shutdown. Fortunately for rehab therapists, the contents of the rule weren’t as much of a surprise given what we’d seen in the proposed rule. If you’re itching to sit down with 2,375 pages of text, you can find the document in the Federal Register. Or, if you’d like to save a few hours and your sanity, we’ve got the most important points for rehab therapists covered. 

The conversion factors(s) go up.

The highlight of any rule from CMS, be it proposed or final, is the conversion factor; providers and owners are rightly making a beeline for the text that tells them how much they’re going to make this coming year from Medicare patients. For 2026, they’ve certainly made that answer more confusing than it needed to be.

Let’s start with the conversion factor—or for 2026, factors. As you may recall from the proposed rule, CMS introduced two separate conversion factors: a qualifying alternative payment model (APM) conversion factor and a non-qualifying APM conversion factor, which was a lower amount. What was even more surprising was that both were being increased; as CMS lays out in their final rule factsheet:

“The final CY 2026 qualifying APM conversion factor of $33.57 represents a projected increase of $1.22 (+3.77%) from the current conversion factor of $32.35. Similarly, the final CY 2026 nonqualifying APM conversion factor of $33.40 represents a projected increase of $1.05 (+3.26%) from the current conversion factor of $32.35.”  

Efficiency adjustments bring payments back down.

Remember the previous section of this article, when providers scored a big win on payment increases? We’ll always remember those fleeting moments of unencumbered happiness, because CMS is also introducing “efficiency adjustments” that, in short, adjust downward the work RVUs for nearly all non-time-based services. The rationale CMS cites is that for those non-timed services, efficiencies gained over time in performing those services aren’t being adequately accounted for, and as such, the time required for those services is actually overinflated in the RVU valuations. For 2026, the efficiency adjustment will be -2.5 percent. 

One bit of good news, or at least a silver lining to this development, is that CMS has removed a number of timed codes frequently used by rehab therapists that had been incorrectly included in the efficiency adjustments list. You can download the full list of codes subject to the efficiency adjustment with this link.  

However, we should also note that, along with telehealth privileges, the temporary floor increase for GCPIs has also expired as of September 30, so depending on your locale, a decrease to your GCPI could bring your payments down as well.

The therapy threshold increases by 1.7 percent.

As happens every year, the therapy threshold (also referred to as the KX modifier threshold) is nudged slightly upward to $2,480 for physical therapy and speech-language pathology services combined, and $2,480 for occupational therapy services. The threshold for targeted medical review remains $3,000 for combined physical therapy and speech-language pathology services, and $3,000 for occupational therapy services.

Adding telehealth services is simplified—but still unavailable to rehab therapists. 

CMS has followed through with its plan to simplify the process for reviewing requests to add services to the Medicare Telehealth Services List, reducing the number of steps from five to three. Those steps are: 

• Determine whether the service is separately payable under the PFS.
• Determine whether the service is subject to the provisions of section 1834(m) of the Act
• Review the elements of the service as described by the HCPCS code and determine whether each of them is capable of being furnished using an interactive telecommunications system as defined in § 410.78(a)(3).

As part of this update, CMS is doing away with the “provisional” designation for services added to the telehealth services list; any service added will be considered permanent moving forward. And because the services currently on the provisional list meet the newly streamlined requirements for inclusion, they are now part of the permanent list.  

CMS is also finalizing its proposal to change its definition of direct supervision for telehealth services to permit physicians or supervising practitioners to provide supervision through real-time audio and visual interactive telecommunications, with the exception of audio-only.

Unfortunately, all of this is academic for rehab therapists at the moment. As of this writing, rehab therapists’ temporary telehealth privileges have expired, and no legislation has been passed to either add them to the list of eligible telehealth providers or to extend temporary privileges.

Remote therapeutic monitoring receives new coding additions. 

Four new remote therapeutic monitoring (RTM) codes have been added for 2026, although one code, 98986, is specifically designated for cognitive behavioral therapy.

• 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
• 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

Also finalized were the updated descriptors for three additional RTM codes: 

• 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 30-day 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

Unfortunately, CMS did not see fit to adjust the RVUs for two other RTM codes, maintaining the current work RVU of 0.62 for 98980 and the current work RVU of 0.61 and the current direct PE inputs for 98981.

MIPS makes its annual changes.

We should aim for the consistency of the MIPS performance threshold in our own lives, which is once again set at 75 points for the 2026, 2027, and 2028 performance years (corresponding to the 2028, 2029, and 2030 payment years).

As for the rest, every year sees its share of additions, subtractions, and alterations, and 2026 is no different. Here’s how those changes shake out. 

Physical Therapy/Occupational Therapy Specialty Set Added

• 317: Preventive Care and Screening: Screening for High Blood Pressure and Follow-Up Documented: Percentage of patient visits for patients aged 18 years and older seen during the measurement period who were screened for high blood pressure AND a recommended follow-up plan is documented, as indicated, if blood pressure is elevated or hypertensive.

Physical Therapy/Occupational Therapy Specialty Set Removed

• 487: Screening for Social Drivers of Health: Percent of patients 18 years and older screened for food insecurity, housing instability, transportation needs, utility difficulties, and interpersonal safety
• 498: Connection to Community Service Provider: Percent of patients 18 years or older who screen positive for one or more of the following health related social needs (HRSNs): food insecurity, housing instability, transportation needs, utility help needs, or interpersonal safety; and had contact with a Community Service Provider (CSP) for at least one of their HRSNs within 60 days after screening

Quality Measures Added

• Q134: Preventive Care and Screening: Screening for Depression and Follow-Up Plan
• Q182: Functional Outcome Assessment

Quality Measure Removed

• Q487: Screening for Social Drivers of Health.

Quality Measures Modified

• MSK6: Patients Suffering From a Neck Injury who Improve Pain: This QCDR measure is undergoing modifications to update the denominator exclusions for this QCDR measure to remove “patients that are non-English speaking and translation services are unavailable.”
• MSK7: Patients Suffering From an Upper Extremity Injury who Improve Pain: This QCDR measure is undergoing modifications to update the denominator exclusions for this QCDR measure to remove “patients that are non-English speaking and translation services are unavailable.”
• MSK8: Patients Suffering From a Back Injury who Improve Pain: This QCDR measure is undergoing modifications to update the denominator exclusions for this QCDR measure to remove “patients that are non-English speaking and translation services are unavailable.”
• MSK9: Patients Suffering From a Lower Extremity Injury who Improve Pain: This QCDR measure is undergoing modifications to update the denominator exclusions for this QCDR measure to remove “patients that are non-English speaking and translation services are unavailable.”
• 281: Dementia: Cognitive Assessment: The measure description is revised to read: Percentage of patients, regardless of age, with a diagnosis of dementia for whom an assessment of cognition is performed and the results reviewed at least once within the 12 months preceding a dementia encounter during the measurement period. The measure numerator is revised to read: Patients for whom an assessment of cognition is performed and the results reviewed at least once within the 12 months preceding a dementia encounter during the measurement period.

Improvement Activities Added

• IA_BE_15: Engagement of Patients, Family and Caregivers in Developing a Plan of Care
• IA_BE_16: Evidenced-based techniques to promote self-management into usual care
• IA_AHW_1: Chronic Care and Preventative Care Management for Empaneled Patients

Improvement Activities Removed

• IA_AHE_9: Implement Food Insecurity and Nutrition Risk Identification and Treatment Protocols, IA_AHE_12: Practice Improvements that Engage Community Resources to Address Drivers of Health
• IA_CC_1: Implementation of Use of Specialist Reports Back to Referring Clinician or Group to Close Referral Loop
• IA_PM_26: Vaccine Achievement for Practice Staff: COVID-19, Influenza, and Hepatitis B.

We’re getting more details on the Ambulatory Specialty Model

In our recap of the proposed rule, we highlighted a program that CMS was undertaking called the Ambulatory Specialty Model (ASM), a new payment model that would focus on specialists for heart failure and low back pain.  The final rule goes into a bit more detail on the particulars of the program, which is set to start on January 1, 2027, and run through December 31, 2033. One passage in particular reads as a statement of intent:

“We believe this model will reduce spending that represents low-value services and major cost-drivers for heart failure and low back pain (for example, unnecessary imaging, surgeries, hospital admissions). Ultimately, this model aims to drive competition among similar specialists with a targeted assessment of their performance relative to their peers in the treatment of a specific chronic condition and protect taxpayers by reducing low-value services by holding specialists accountable for the cost of services clinically related to their role in managing care.”

As outlined in the final rule, ASM will borrow the approach of MVP reporting, with some distinctions.  Instead of voluntarily selecting the measures and activities they can report, participants will have a required set related to their specialty and the condition they’re treating. Rather than being measured against the entire pool of MIPS participants, as is the case with MVPs, ASM participants are only measured against those treating the same condition. And the final score calculation will be tweaked to produce a wider range of scores, and thus a greater magnitude of payment adjustments — although CMS does note that a portion of the payments won’t be distributed to providers in order to ensure savings. 

The program definitely bears further observation as we get closer to the launch date. If you’re looking to dive deep, you can start on page 680 of the final rule. 

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As always, the final rule makes for an interesting if not compelling read — so be thankful you don’t have to read it yourself! We’ll be diving into the final rule in even greater detail next month during our final rule webinar, so keep an eye on your inboxes for an invitation in the near future.