2026 Physical Therapy Billing & Payment Updates

Your Blueprint to Maximizing Reimbursements in 2026

Table of Contents

In Touch Billing has created a summary of all the 2026 billing and payment updates for Physical Therapy (PT) that will impact practices from a revenue, compliance, and operational standpoint.

Overall, 2026 represents a stabilization year for PT after several years of reimbursement pressure. While the increases are modest, there are meaningful opportunities for clinics that prepare proactively for 2026.

1. Medicare Payment Update for 2026

For the first time in five years, Medicare has finalized a net payment increase for PT services.

  • Most PT practices will see an approximate 3.2% - 3.3% increase in Medicare reimbursement.
  • Timed treatment codes (such as therapeutic exercise, neuromuscular re-education, and therapeutic activities) benefit the most.
  • Certain non-timed services, particularly evaluation codes, may see slight downward pressure due to CMS efficiency adjustments.
  • Practices must make sure that the reevaluation services for all the payers are well documented and medical necessity is always justified.
What this means for you:
High-volume clinics with strong treatment utilization should see a modest positive revenue impact in 2026 with an experienced billing and coding team. Relentless follow up with payers will be critical in 2026.

2. Expansion of Remote Therapeutic Monitoring (RTM)

RTM is the most significant growth opportunity for PT practices in 2026.

Key changes include:

  • Introduction of tiered RTM billing, allowing reimbursement for:
    • 2–15 days of data transmission (previously required 16+ days)
    • 10–19 minutes of monthly treatment management (previously required 20+ minutes)
  • New RTM codes designated as “sometimes therapy,” which require the GP modifier when billed under a PT plan of care.
What this means for you:
RTM can now be billed for shorter plans of care and partial patient compliance, enabling clinics to generate additional revenue without increasing visit volume, as long as documentation and modifier usage are correct.

RTM allows clinics to:

  • Generate revenue outside in-clinic visits
  • Extend care beyond discharge
  • Reduce dependency on Medicare telehealth

3. Therapy Thresholds and KX Modifier

For 2026:

  • KX threshold increased from $2,410 to $2,480 (PT and SLP combined)
  • Targeted Medical Review threshold remains $3,000
  • CMS continues to closely monitor claims above these thresholds.
What this means for you:
Claims exceeding the threshold must clearly demonstrate:
  • Medical necessity
  • Skilled intervention
  • Functional improvement
Clinic Owner-Level Risk:
  • Claims above $3,000 are still audit targets
  • KX misuse remains one of the top recoupment triggers

4. Telehealth Status for Physical Therapy

Standard Medicare telehealth privileges for PT expires in early 2026, unless new federal legislation is enacted.

What this means for you:
  • Medicare telehealth billing by PTs is no longer permitted under Part B
  • RTM becomes the primary compliant option for remote patient engagement
  • Clinics relying on telehealth must realign workflows

5. Patient Responsibility and Cash Flow

The Medicare Part B deductible has an increase of $26 from the annual deductible of $257 in 2025 to $283 for 2026

What this means for you:
Higher patient responsibility early in the year may impact collections, particularly in Q1. Strong front-desk financial counseling and point-of-service collections will be increasingly important.

6. Quality Reporting (MIPS)

  • The MIPS performance threshold remains at 75 points
  • New preventive screening measures have been added to the PT/OT specialty set
What this means for you:
Poor MIPS performance can affect future Medicare reimbursement, especially for small and mid-sized practices.

Key Takeaway

While 2026 does not bring sweeping reforms, it rewards clinics that are operationally disciplined. Practices that implement RTM correctly, strengthen documentation, and monitor compliance closely are best positioned to protect margins and reduce audit risk.

At In Touch Billing, our team will continue to monitor regulatory updates and support all clients with:

Please feel free to reach out if you would like a practice-specific impact review or assistance preparing your workflows for 2026.

Action Plan for 2026

Immediate Actions
Mid-Year Focus
Ongoing

In Touch Billing Success Stories and Track Record

We have helped grow thousands of private practices over the years with a combination of software, workshops, and training programs. We recognize that basic elements like an EMR, billing software and a clearing house by themselves do not build a successful practice. They are just components of the bigger picture.

What you need is a billing service and a team that can help you with compliance and clinical documentation requirements. When you put great software in the hands of outstanding, dependable clinicians and billers, you’ll build a successful practice.

In December 2025 alone, our billing software has been used to process over $1 billion in collections and millions of insurance claims from thousands of payers in every state across the country. We are based in Denville, NJ and our billing staff is located in the United States and overseas, to help you lower your costs and maximize your revenue.

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In 10 minutes, we’ll show you how In Touch Billing can slash your billing costs and boost revenue.

Schedule this no-obligations call. Ask for a FREE billing audit to learn new ways to increase revenue and reduce denials.

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