CMS Releases Medicare Physician Fee Schedule Final Rule for CY 2026

On October 31, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule (MPFS) Final Rule for Calendar Year 2026. The rule included several provisions that impact the physical and occupational therapy communities.

In line with the increase included in H.R.1, the final rule updated the MPFS conversion factor from $32.3465 to $33.5675 for qualifying alternative payment model (APM) participants and $33.4009 for non-qualifying APM participants, increases of 3.77% and 3.26%, respectively.

The final rule also updated the equipment price for certain therapy codes that physical therapy providers frequently use to help patients. Specifically, CMS acknowledged the physical therapy community’s suggested pricing updates for exercise equipment, manual tools and parallel bars, and added these items to Medicare’s equipment list. CMS did not, however, add this equipment to physical therapy CPT codes.

The final rule outlined what CPT codes will remain on Medicare’s Efficiency Adjustment List in 2026. Specifically, CMS removed 97032 (manual application of electrical stimulation), 97033 (iontophoresis), 97034 (contrast bath for treating muscle soreness, swelling, and inflammation), 97035 (therapeutic ultrasound treatments), 97036 (Hubbard tank to deliver hydrotherapy), 97113 (aquatic therapy with therapeutic exercises), 97124 (effleurage, petrissage, or tapotement), 97140 (mobilization/manipulation, manual lymphatic drainage, or manual traction), and 97533 (sensory integration). Moreover, 97140 and 97113 went from a negative year-over-year change to a positive one in 2026. The rule reflects many of the CPT codes APTQI requested CMS remove from the Efficiency Adjustment List in a September 2025 comment letter.

Another provision closely watched by stakeholders in the final rule is the Utilization Assumption for G2211, an add-on code for office and outpatient Evaluation and Management (E/M) to be reported when there is a longitudinal relationship between the physician and patient. While the physical therapy community specifically requested CMS correct utilization estimates to reflect actual claims data from 2024, CMS finalized this provision as originally proposed in July.

Lastly, the final rule decreased the Indirect Practice Cost Index (IPCI) Policy by 12.7%, even more than the 12.5% that was included in the proposed rule.

To read the MPFS final rule, CLICK HERE.

To read APTQI’s comment letter to CMS about the proposed rule, CLICK HERE.