CMS released the Physician Fee Schedule (PFS) Proposed Rule last month, a.k.a. the “Medicare Part B Rule,” outlining changes for 1/1/26 that will go into effect unless modifications are made based on comments and feedback from providers due next week.
This 900+ page document includes information on payment rate changes, codes changes, supervision of assistants, telehealth and more! We highlighted the Medicare Part B rules that impact therapy in the SNF setting.
Of note, CMS released a “Proposed Rule Correction” document after the original Proposed Rule was released. The information that follows is based off of the Corrected Rule.
Proposed Changes For January 1st, 2026
1. Rate Information
Rate cuts for Part B have been the norm in recent years. Last year, the decrease in average payment rate under the Physician Fee Schedule (PFS) was 2.9%. This year, we have “good news and bad news”…..
- Good News: CMS proposed a 3.3% increase
- Bad News: SNF Therapy providers may not see it all
Each year, determining the rate for individual Current Procedural Terminology (CPT) Codes is a balance of variables, including the Conversion Factor (CF), which typically changes annually, and Relative Value Units (RVU) for each CPT Code, which are less likely to change. While each CPT Code has its own RVU, the CF is applied equally across all Codes, meaning, if the CF is the only variable changing, then the outcome for each CPT Code will be determined by an increase or decrease in the CF. If the CF stays constant, the outcome will be determined by any change in the RVUs. You get the idea…
The CF has been trending down for almost a decade, dragging the value of many CPT Codes with it. For the 1st time is a long time, CMS is proposing a 3.3% increase in the CF for CY2026. This is great news for the CF, from $32.36 last year, to $33.42 this year.
- 3.3% = [0.25% Fee Schedule Increase + 2.5% from the Big Beautiful Bill, and a 0.55% neutrality adjustment]
However, SNF therapy providers may not see that full increase due to reductions in the “other variable,” Relative Value Units (RVU) explained below.
When the CF increases, the overall payment rate for the CPT codes increases, unless the RVU for a specific CPT code is decreased enough to offset the CF increase. This may be what we are seeing for 2026.
CMS is proposing a decrease in RVUs for many of the CPT Codes for CY2026, counteracting the increases gained from a higher CF for all CPT codes. The result… CPT Codes with no change their RVU will see that 3.3% increase. CPT codes with a reduction in the RVU will see less than 3.3% increase, all depending on the RVU of each Code.
The Proposed Rule is targeting non-time-based codes for the RVU reduction. CMS states the reduction is due to clinicians being “more efficient” in providing these services and is equating this to requiring less reimbursement. So much for being good at your job!
“We are proposing to apply this efficiency adjustment to non-time-based services that we expect to accrue efficiencies over time. We are proposing to apply the adjustment to all codes
except time-based codes, including but not limited to, E/M visits, care management services, behavioral health services, services on the CMS telehealth list….”
This is a snapshot of the non-time-based CPT Codes provided by CMS in the Rule (Link below) that will see “efficiency adjustments.” It appears that some time-base codes (highlighted yellow) used by therapy were dragged in, hopefully in error. Our Professional Associations have reached out to CMS.
Because each CPT Code has its own RVU, each provider will be impacted differently. Providers that frequently bill the impacted codes will see a bigger hit than those that don’t.
The silver lining here for SNF therapy is that the true non-time-based codes listed here are not frequently used in most SNF Part B settings.
Here is the link to the CMS file of impacted CPT codes:
CY 2026 PFS Proposed Rule Codes Subject to Efficiency Adjustment
Did you know you can look up any CPT code and check the reimbursement rate HERE ?
If you haven’t done so yet, download our custom CPT Code tool with all PT, OT and SLP codes, code definitions and code category (time-based/pays by unit vs non-time-based/pays flat rate) to help keep track of the information.
2. Modifiers And Manual Medical Reviews
KX Modifier Threshold
The “old” Therapy Cap is now disguised as the KX Modifier Threshold, and “threshold amounts” change yearly. The 2025 “threshold” of $2,410 for OT, $2,410 for PT and Speech combined, will increase to $2,480 for CY2026. Continued use of the KX modifier is required for all therapy services that “would have exceeded the previous therapy cap amounts,” or claims will be automatically denied.
The KX Modifier is an attestation by the therapist that the resident continues to require medically necessary services beyond the dollar threshold, and the rationale for the extended therapy services are documented in the medical record. All therapists should be aware of the amount of therapy a resident has received in a calendar year, and if over the threshold during a current episode of care, documentation should focus on supporting the extended services.
Manual Medical Review
The manual medical review threshold continues at the same amount of $3,000 until the next revision begins CY2028.
This type of review is not automatic when the $3,000 is reached. CMS uses the Targeted Probe and Educate (TPE) review process with providers identified through data submission as “outliers.” The TPE looks for providers with a high number of claim denials, questionable practice patterns including high number of units per day, and provides training to decrease the error rate. For more information on the TPE process, visit the CMS info page or check out the Q&A Document.
3. Telehealth
As we are all well aware, therapy professionals, by law, could not provide telehealth services prior to the Public Health Emergency (PHE) and are currently only able to provide telehealth now post-PHE, through a temporary continuation of these extended flexibilities outlined in legislation through 9/30/25 for the SNF and other settings.
There are currently no active plans for an extension and on 9/30/25 telehealth under Medicare will end for therapy professionals. The expiration date is not related to the PFS Proposed Rule, rather is tied in with government funding for federal programs. Congress would need to pass new legislation by 9/30/25 to extend telehealth, so we can plan on receiving this information before CMS released the Final Rule.
Telehealth will continue on in CY2026 for the pre-existing approved providers, even if therapy professionals are not added as approved providers.
As such, CMS includes in the Proposed Rule, an updated list of Telehealth CPT Codes for CY2026. Below is the link to the Proposed list of acceptable codes, as well as a snapshot of the CPT Codes used in SNF therapy. Only codes from the list can be provided via telehealth.
CY 2026 PFS Proposed Rule List of Telehealth Services
4. Proposed Changes to Therapy-Used CPT Codes
Pate 84 of 910 in the Proposed Rule introduces 4 new Remote Therapeutic Monitoring (RTM) CPT Codes to be added to the current list of RTM Codes. The current CPT Codes represent monitoring a resident remotely 16-30 days in a 30-day period. The new Codes allow for billing of monitoring 2-15 days in a 30-day period.
The codes and descriptors can be seen below, with the new codes represented with XX. Those XX’s will be replaced with numbers in the Final Rule.
Important Links + Resources
Here are all the resources needed to dig deeper…
Proposed Rule – Federal Register Version | PDF Version (910 pages)
Corrected Proposed Rule – PDF Version (7 pages)
In Summary
CY2026 as Proposed will make for a relatively quiet year in terms of major changes in SNF therapy practice. Though we can expect less than the 3.3% increase due to the efficiency adjustment to non-time-based CPT Codes, we will have to wait for the Final Rule to see if CMS corrects the addition of some therapy time-based codes as well.
The fate of Telehealth for therapy professionals is not dictated by the Final Rule, rather the expiration of temporary legislation, and will end on September 30th without an act of Congress.
Remember, these changes are for Part B therapy only, and specific to the SNF setting. We teased out the parts of the Rule that applied to the SNF….so don’t worry about MIPS or other rules specific to private practice!
If you have comments for CMS regarding any aspects of the Proposed Rule, the submission deadline is coming up quick, 9/12/25. Submit electronic comments to http://www.regulations.gov.
As always, if you have any questions about the information or how it will impact you, send them to us here: Just Ask Q&A
In Your Corner,
Dolores Montero, PT, DPT, RAC-CT, RAC-CTA
SNF Therapy & MDS Resource Team
MonteroTherapyServices.com
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