Key changes for OT in the 2026 Medicare Part B proposed rule

The conversion factor (CF) is the multiplier that Medicare assigns to determine the Medicare-allowed dollar amount for each service reimbursed under the Physician Fee Schedule. The CF is adjusted annually to maintain budget neutrality within the Fee-for-Service system.

• CMS is proposing a CF of $33.4209

This represents a significant increase compared to this year, in part due to a small statutory increase and Congressional action which added a 2.5% temporary, one-year increase to the fee schedule. The increase in CF will likely result in an overall average increase in reimbursement for OT services of 1.5% over 2025.

AOTA supported this Congressional one-year fix, but also acknowledges that lack of inflationary updates, budget neutrality adjustments which increase payment to other services at the cost of therapy services, and the yo-yo effect of temporary Congressional fixes followed by mandatory CMS reductions in the CF to adjust for those fixes in the following years has had a significant, long-term impact to the sustainability of OT services under Medicare Part B. AOTA is working collaboratively with the American Physical Therapy Association (APTA), the American Speech-Language-Hearing Association (ASHA), and several key stakeholder groups to effect more lasting change.

Each year, CMS reviews and updates the list of CPT codes eligible for telehealth delivery, categorizing them as either permanent or provisional. Provisional codes are only temporarily approved and may expire or be removed after a set date. Currently, most OT-related CPT codes used for telehealth fall under this provisional category.

Requests to add new codes or change the status of existing ones must be submitted by February each year. In this cycle, AOTA requested that several OT codes already on the provisional list be moved to the permanent list. AOTA also advocated for CMS to consider the challenges of providing peer-reviewed evidence for each individual code across broad Medicare populations, one of the current requirements for permanent status.

In its latest proposed rule, CMS suggests revising this process by eliminating some of the burdensome requirements for adding or transitioning codes. Notably, CMS proposes removing the distinction between temporary and permanent designations altogether. If finalized, this proposal would make all services currently on the Medicare Telehealth Services List—including those used by OTPs—permanently available via telehealth. This is a significant first step for securing permanent access to telehealth service delivery, as it ensures consistent Medicare reimbursement, long-term patient access, and greater financial stability for providers. It also encourages investment in telehealth infrastructure and signals to other payers that CMS recognizes the value of OT services delivered remotely.

Inclusion on the Medicare telehealth list is just one part of securing permanent access. The current flexibility that allows OTPs and other therapy providers to deliver telehealth services is set to expire this fall. Congressional action is required to extend or make this flexibility permanent. AOTA continues to advocate for legislation that would ensure telehealth remains a lasting part of OT practice under Medicare.

While many occupational therapy practitioners (OTPs) are independent Medicare providers, some work in clinics where they provide services “incident-to” a physician, meaning they must operate under the physician’s direct supervision. Traditionally, this requires the supervising physician to be physically present onsite during care.

During the COVID-19 pandemic, CMS introduced temporary flexibility allowing direct supervision to be met through real-time audio/visual (A/V) communication, rather than in-person presence. For some provider types, this virtual supervision option became permanent. Earlier this year, AOTA, APTA, and ASHA met with CMS to request that therapy providers be included among those permanently allowed to meet direct supervision requirements virtually.

In its proposed rule, CMS recommends a permanent change to the definition of direct supervision, allowing supervising practitioners to be “immediately available” via real-time audiovisual (A/V) technology (excluding audio-only) for all services, except those tied to global surgical procedures. This change would allow more flexible scheduling and service delivery, expand access for OT services in rural and underserved areas where having a physician onsite may not be feasible, and allow OTPs in incident-to arrangements to focus on delivering high-quality, client-centered care rather than navigating administrative hurdles.

Remote Therapeutic Monitoring (RTM) is a relatively new technology that allows OTPs to track a patient’s response to treatment and make timely adjustments to the therapy plan between sessions. Current RTM codes cover both the use of monitoring devices and the clinician’s time spent setting up, reviewing, and acting on the data. However, these codes require at least 16 days of data collection within a 30-day period and a minimum of 20 minutes of clinician time per month to be eligible for reimbursement. This rigid monthly billing structure has limited the adoption of these codes. OTPs often don’t know until the end of the month whether their services will meet the billing threshold, and many practical use cases don’t require a full 30-day monitoring period.

To address these issues, new RTM codes were developed and valued through the American Medical Association (AMA) coding process, which would reimburse for shorter monitoring periods and less clinician time.

Relevant new codes for OT include:

• 98XX5 – RTM for musculoskeletal monitoring, 2–15 days
• 98XX6 – RTM for cognitive behavioral therapy, 2–15 days
• 98XX7 – RTM treatment management, first 10 minutes with at least one real-time

During the AMA process, existing RTM codes were also reviewed and revalued based on practitioner feedback, which supported increased reimbursement. However, in this rule, CMS proposes to maintain the current reimbursement rates for existing RTMs.

AOTA is preparing comments in support of adopting the new RTM codes, but is urging CMS to reconsider its valuation decisions. AOTA argues that lowering reimbursement—despite data showing higher costs and value—undermines CMS’s own goals of expanding access to digital health tools for Medicare beneficiaries.

CMS is seeking public input on how to better support the prevention and management of chronic diseases in the Medicare program. Specifically, they are asking for feedback on gaps in current payment codes for services that address root causes of chronic disease and social isolation, how wearables and remote monitoring could support chronic care management, and potential opportunities to explore coding and payment for intensive lifestyle interventions, medically tailored meals, and services that address social needs and physical activity.

CMS is also seeking feedback on how to better support evidence-based programs, such as those funded by the Administration for Community Living (ACL), that help manage or prevent chronic diseases, reduce hospital use, and improve health behaviors among older adults and people with disabilities. Specifically, they are looking to explore how new codes related to health coaching and motivational interviewing could support ACL-funded programs that address chronic disease, mental health, falls prevention, and physical activity.

This request for information (RFI) is an opportunity to highlight OT’s role in holistic, preventative care and encourage policies that address gaps in OT coverage and reimbursement for these services.

CMS is proposing a new mandatory alternative payment model, called the Ambulatory Specialty Model (ASM), which is set to run from January 1, 2027, to December 31, 2031. This model aims to improve care quality and reduce costs by adjusting specialist payments based on performance in managing heart failure and low back pain. The model is designed to promote upstream chronic condition management, improve patient outcomes, and empower patients through greater accountability and engagement.

Currently, the model appears to be limited to select physician specialties and does not include therapy practitioners. However, AOTA will conduct a thorough review of the model specifications to identify potential opportunities for integrating occupational therapy and to advocate for OT’s role in enhancing care quality and reducing reliance on higher-cost management services through timely referrals and interventions.

The Medicare Diabetes Prevention Program (MDPP) is a lifestyle change program developed by the Centers for Medicare & Medicaid Services (CMS) to help prevent or delay the onset of type 2 diabetes in Medicare beneficiaries who have been diagnosed with prediabetes. The program is structured into up to 22 sessions over 12 months, led by a trained coach, covering topics such as healthy eating, physical activity, and behavior change strategies, with the goal of helping participants achieve and maintain at least a 5% weight loss. Despite its benefits, fewer than 1% of eligible Medicare beneficiaries have participated, prompting CMS to propose changes to improve access and flexibility.

In this proposed rule, CMS proposes several changes to the program to encourage participation and increase access, including:

• Allowing services to be delivered online, including asynchronous sessions, through December 31, 2029
  • Creates a new billing code to reflect online sessions
• Beneficiaries could use weight data from medical records or self-report from reasonable locations (e.g., gyms, clinics, temporary residences), rather than only during in-person or home sessions.

OTPs are well-positioned to support behavior change, habit formation, and lifestyle interventions, which are core components of MDPP. AOTA is actively analyzing opportunities for collaboration with MDPP suppliers or inclusion as trained coaches as this program expands.

As in prior years, CMS is proposing modifications to the Merit-based Incentive Payment System (MIPS) to add, modify, and remove measures within both traditional MIPS and MIPS Value Pathways (MVPs). While many of the changes do not directly affect OT services, several will have a direct impact on reporting for OTPs.

Changes are proposed for the Changes to Rehabilitative Support for Musculoskeletal Care MVP to add quality measures available for reporting around depression and functional outcomes assessments, add new improvement activities supporting patient/caregiver engagement, promoting self-management, and preventative care, and proposing the removal of measures related to screening for social drivers of health and staff uptake of COVID-19 vaccination.

Quality Performance Category

CMS is also proposing changes to the PT/OT specialty set for traditional MIPS, including:

Revisions

• Documentation of medications in the medical record (QM 130)
• Preventative care and screening: Screening for depression and follow-up plan (QM 134)
• Dementia: Cognitive assessment (QM 281
• Gains in Patient Activation Measure (QM 503)

Removals

• Screening for social drivers of health (QM 487)
• Connection to Community Service Provider (QM 498)

Additions

• Preventative Care and Screening: Screening for High blood pressure and follow-up documentation (QM 317)

Improvement Performance Category

CMS is proposing to replace the “Achieving Health Equity” (AHE) subcategory with a new subcategory, “Advancing Health and Wellness” (AHW), beginning with the CY 2026 performance period/2028 MIPS payment year, which will focus on patient-centered care in areas such as mental health and chronic disease management and prevention.

New improvement activities of potential interest to OTPs include Improvement Detection of Cognitive Impairment in Primary Care, Integrating Oral Health Care in Primary Care, and Patient Safety Use of Artificial Intelligence.

Other proposed QPP policy changes may have a downstream impact on OT services. AOTA will continue to review these policies to identify additional areas that require advocacy.

CMS is seeking public input on several aspects of MIPS and QPP future development that could provide opportunities for OTPs participating in MIPS in the future.

RFI on wellness and nutrition

CMS is seeking public input on potential future measures that promote overall well-being as part of a comprehensive, person-centered approach. Specifically, they are seeking comments on tools and measures that assess overall health, happiness, and life satisfaction, which could include aspects such as emotional well-being, social connections, purpose, and fulfillment. Comments should include information on the applicability of tools and constructs that assess the integration of complementary and integrative health, skill-building, and self-care.

RFI on data quality

CMS is seeking public input on challenges and solutions related to data quality in health information exchange for MIPS-eligible clinicians. They define data quality as the accuracy, completeness, timeliness, consistency, and reliability of health data. The request focuses on:

• Current data quality challenges faced by healthcare organizations.
• Efforts and persistent barriers in addressing these challenges.
• Effective solutions used by MIPS clinicians.
• Recommendations for CMS to improve data quality and usability in health information exchange.
• Opportunities for collaboration between CMS, clinicians, industry, and federal agencies