On Oct 31, 2025,CMS released the Calendar Year 2026 Physician Fee Schedule Final Rule.

This rule dictates the CPT rates and policies for Medicare B Therapy Services that are set to go into effect on Jan 1, 2026.

Below are some highlights:

1. CPT Rates:

• Beginning with Jan 1, 2026 rates, CMS implemented several methodology changes in calculating CPT rates.
• These changes include the establishment of an efficiency adjustment; an updated method to calculate the PE component; and the establishment of a separate higher conversion factor for providers participating in an Alternative Payment Model (unfortunately, SNFs are excluded from this).
• These changes will affect each SNF and each setting differently.

Check out our PART B CALCULATOR on the ENHANCE THERAPIES website to see how your 2026 CPT rates compare to 2025!

     B. KX Modifier Thresholds:

• The KX Modifier Threshold for CY 2026 is $2,480 for OT, and $2480 for PT/ST combined. 
• As a reminder, there is no longer a therapy cap, however, CMS still mandates that the KX modifier be applied at the above thresholds to attest that therapy services are still reasonable and necessary.
• Targeted Medical Review will also continue for OT services above $3,000, and for PT/ST services above $3,000.  
• Targeted Medical Review means that only “select facilities” who exceed these thresholds will be placed on review.
• “Select Facilities” include facilities who had a high denial percentage, facilities who have an aberrant billing pattern, new providers, and facilities who are part of a chain with one of the previously mentioned factors. 

   C. Telehealth:

• CMS streamlined the process to add additional services to Medicare telehealth.
• CMS, however, only has the authority to approve CPT codes; only Congress can approve which practitioners may utilize telehealth.
• Due to the government shutdown, the continuation of PT, OT and ST as approved telehealth providers has not been extended.
• CMS has instructed MACs to HOLD any PT,OT, ST Medicare telehealth claims that were provided after Sep 30, 2025, and retroactive payment is not guaranteed.
• According to CMS memo QSO-26-01, CMS strongly recommends that therapists who choose to provide telehealth after Oct 1, 2025, give their beneficiaries an ABN: Advance Beneficiary Notice (CMS R-131 form for Med B) prior to the provision of therapy services, and maintain a copy on file. 

Due to recent activity on Capitol Hill, there is a possibility that the government shutdown can end by the end of this week.

We will continue to keep you updated.

To read the full CY 2026 Final Rule, click here.

To view 2026 Part B Therapy rates, FY2026 PPS rates, and the latest MDS, Five Star, QM, QRP, and PBJ manuals, don’t forget to visit our Enhance Therapies website!

 If you have questions, or need additional information, please email us at: Medicarequestions@enhancetherapies.com