On July 14th of 2025, the Centers for Medicare & Medicaid Services released the CY 2026 Medicare Physician Fee Schedule proposed rule (CMS‑1832‑P), opening a 60 day public comment period through September 12th of 2025. This proposed rule outlines significant updates affecting physician payments, telehealth policies, quality reporting, and how care models are rewarded under Medicare Part B.
Centers for Medicare and Medicaid Services proposes a –2.5% efficiency cut to work RVUs for non time based codes, reflecting improved practice efficiencies. E/M visits, care management, behavioral health, maternity, and telehealth codes are excluded. Centers for Medicare & Medicaid Services aims to standardize payments regardless of care setting, using facility data to align RVUs between private practices and hospital outpatient settings.
Telehealth & Virtual Supervision Advances
Permanently permit direct supervision via real time audio and video for selected services. Propose permanent telehealth waivers for rural health clinics and federally qualified health centers and remove provisional telehealth distinctions, making most services permanently eligible.
Innovation in Care Models & Quality Programs
Launching the Ambulatory Specialty Model (ASM): a mandatory 5 year pilot starting on January 2027 for heart failure and low back pain care. Introducing add on codes for Advanced Primary Care Management, including behavioral health integration.
Quality Payment Program (QPP) updates:
-New MIPS Value Pathways
-Stable performance thresholds through 2028
-Digital and nutrition measures under consideration
All these matters for Physical Therapy providers cause the boost to PFS conversion factor positively affects timed codes central to Physical Therapy billing, also expanded site neutral policies could shift therapy from hospital outpatient settings to private clinics, it will have telehealth permanence and a lot of value based opportunities.
The CY 2026 PFS proposed rule marks a significant step in enhancing physician and therapy reimbursement, promoting telehealth permanence, and incentivizing value based, site neutral care. For physical therapy providers, it’s an opportunity to adapt, advocate, and align with evolving Medicare reform.
