2026 Medicare therapy fee schedule: rates, reductions and worked examples

How a rate is built

Every code on the Medicare physician fee schedule has three relative value units (RVUs): work (the clinician’s time and skill), practice expense (staff, space, equipment) and malpractice. CMS multiplies each by your locality’s geographic practice cost index (GPCI), adds them, and multiplies by the conversion factor.

Example: one unit of 97110, national.

2026 national rates, every code

One unit, no geographic adjustment, before the multiple procedure reduction. Built from CMS’s October 2026 relative value file (RVU26D); descriptions are ours, in plain English.

How much your area changes it

Medicare has 109 payment localities. The same four-unit visit (example B below) is paid very differently depending on where it happens. The chart shows the six highest- and six lowest-paid localities for 2026.

The gap between the top and bottom locality is $37.90 per visit. Over 3,000 visits a year that is about $113,700, for the same care. Most of the difference comes from the practice-expense index, which reflects local rent and staff costs.

Every state at a glance

Some states are one Medicare locality; others, like California, Texas and New York, have several. This table shows the range for each state, for one unit of 97110 and for the typical four-unit visit, after the multiple procedure reduction.

Computed from CMS RVU26D and the 2026 GPCIs, private practice rate. Pick your exact locality in the rate calculator.

The 50% multiple procedure reduction

Since April 1, 2013, when a patient gets more than one unit of “always therapy” services on the same day, Medicare pays the unit with the highest practice-expense value in full and pays 50% of the practice-expense part of every other unit (CMS). Work and malpractice are never reduced. If two units tie on practice expense, the one with the higher total is paid in full (First Coast).

• It applies per patient per day, across PT, OT and speech, and to multiple units of the same code.
• It applies whoever furnishes the service: private practice or institutional provider.
• The reduced amount is what counts toward the KX threshold, and what the patient’s 20% is based on.

Six worked visits

All at national rates, private practice. Change any of them in the rate calculator to see your locality.

A. One unit only. A single unit has nothing to reduce: it is paid in full. Allowed: $29.06, of which Medicare pays $23.25 and the patient $5.81.

B. A typical 4-unit treatment visit. 97530 has the highest practice-expense value, so it is paid in full; the other three units lose half their practice-expense part. Allowed: $100.70, of which Medicare pays $80.56 and the patient $20.14.

C. Evaluation plus treatment on day one. The evaluation has the highest practice-expense value of the day, so it is paid in full and both exercise units are reduced. Allowed: $142.29, of which Medicare pays $113.83 and the patient $28.46.

D. Same visit, two units by a PTA. The two 97110 units furnished by the assistant carry CQ and are paid at 85% of their already-reduced amount. Allowed: $94.04, of which Medicare pays $75.23 and the patient $18.81.

E. PT and OT for the same patient, same day. The reduction applies across disciplines: only one unit of the whole day, the one with the highest practice-expense value, is paid in full. Allowed: $104.54, of which Medicare pays $83.64 and the patient $20.91.

F. Speech therapy session with an evaluation. Speech codes subject to the reduction work the same way: the evaluation is paid in full and the treatment’s practice-expense part is halved. Allowed: $286.41, of which Medicare pays $229.13 and the patient $57.28.

Evaluations: complexity and pay

A detail many clinics miss: in the 2026 file, the three PT evaluation levels (97161 low, 97162 moderate, 97163 high complexity) carry identical relative values, so each pays $97.86 nationally. The same is true of the three OT evaluation levels (97165–97167, $100.54). Re-evaluations (97164, 97168) pay less.

• Pick the level the documentation supports, not the one you think pays more: they pay the same. Complexity is set by history, examination, clinical presentation and decision-making.
• The evaluation is usually the unit paid in full on the first visit, because its practice-expense value is the highest of the day (see example C).
• Re-evaluations need a reason, such as a significant change in condition; routine progress reports are not re-evaluations.

Group therapy (97150)

97150 is billed per patient when a therapist treats two or more patients at the same time, whatever they are doing. It pays $18.04 per patient nationally, far less than one-on-one codes, and Medicare’s rules don’t allow one-on-one timed codes for time when the therapist was dividing attention between patients.

Modalities: small amounts

Supervised modalities pay little on their own: mechanical traction (97012) is $14.36, unattended electrical stimulation (G0283) $12.69 and paraffin (97018) $6.01 nationally, before the reduction. Attended modalities such as ultrasound (97035, $14.36) and iontophoresis (97033, $19.04) are timed codes and count toward the visit’s total timed minutes.

Example. Adding 97012 to a four-unit visit adds only about $11.36 once the reduction applies. Modalities are worth billing when they are medically necessary and documented, but they don’t change a visit’s economics much.

Speech-language pathology

Speech treatment (92507) pays $76.15 per session nationally and swallowing treatment (92526) $84.17. Unlike most PT and OT treatment codes, these are untimed: one unit per session, whatever its length. Speech and PT share one KX threshold, so a patient seeing both reaches $2,480 sooner. Evaluations such as 92523 ($226.46) are the high-value unit of the day and are usually paid in full under the reduction (example F).

PTAs and OTAs: the 85% rate

Since January 1, 2022, services furnished in whole or in part by a physical therapist assistant (CQ modifier) or occupational therapy assistant (CO modifier) are paid at 85% of the otherwise applicable amount. Under CMS’s de minimis standard, the modifier applies only when the assistant furnishes more than 10% of the service (CMS).

Example. In visit D above, the PTA furnished both units of 97110. Those units are first reduced by the multiple procedure rule and then paid at 85%, a further $6.66. Across 2,000 such visits a year, that is about $13,320: worth knowing when you plan staffing, and a reason to code CQ only when the 10% standard is actually met.

Planning a year’s revenue

Example practice. A two-therapist clinic (invented) sees 120 traditional Medicare visits a week for 50 weeks: 6,000 visits. Its mix:

That is about $584,964 a year in Medicare allowed amounts at national rates. Three things move it most:

• Locality. In the highest-paid locality above, the same year is worth about $768,411; in the lowest, about $548,251.
• Assistant mix. If a PTA furnished two units in every treatment visit, the 85% rate would cost about $35,964 a year, offset by the lower cost of the assistant.
• Missed units. One unit of 97110 missed on one visit in four costs about $33,317 a year.

Rates and the KX threshold

The KX threshold is $2,480 for PT and speech combined and $2,480 for OT in 2026, counted in allowed amounts after reductions (CMS). At the national typical-visit amount of $100.70, a patient reaches it after about 24 visits; in a high-cost locality, sooner. Above the threshold, claims need the KX modifier and records that support medical necessity. Track each patient with the KX threshold check.

What the number leaves out

• Deductible and coinsurance. The patient pays the Part B deductible first, then 20% of the allowed amount; Medicare pays 80%.
• Sequestration. Medicare’s share is reduced slightly by budget sequestration, so remittances run a little under 80%.
• Denials and edits. NCCI edits, missing modifiers and documentation problems reduce or deny payment.
• Other payers. Medicare Advantage, Medicaid and commercial plans use their own rates.

Explaining the cost to patients

Patients with traditional Medicare and no supplemental plan pay 20% of the allowed amount after the Part B deductible. For the typical four-unit visit at national rates that is about $20.14 a visit, or about $242 for a course of 12 visits. Quoting a range by locality (see the state table) avoids surprises, and many patients have a Medigap or Medicaid plan that covers the 20%.

Checking your remittance

Mistakes that cost money

1. Under-counting units. Miscounting total timed minutes under the 8-minute rule leaves a unit on the table. Use the 8-minute rule calculator.
2. Billing 97014 to Medicare instead of G0283.
3. Budgeting at the unreduced rate and wondering why revenue falls short.
4. Using last year’s rates for this year’s budget.
5. Assuming every area pays the national rate.
6. Coding evaluation complexity higher than documented, when all three levels pay the same.
7. Billing one-on-one codes for group time.

Questions

Sources

1. CMS, PFS Relative Value Files: RVU26D (released August 26, 2026) — relative values, status and multiple procedure indicators for every code
2. CMS, CY 2026 Therapy Services Updates (MPPR, CQ/CO, KX threshold) — the 50% MPPR, the 85% CQ/CO rate, the de minimis standard and the 2026 KX threshold
3. First Coast Service Options (Medicare contractor), Multiple procedure payment reduction — how the highest practice-expense unit is chosen and that the reduction spans disciplines
4. Hall Render, Key highlights from the 2026 Medicare Physician Fee Schedule final rule (conversion factors) — the 2026 conversion factors and the efficiency adjustment
5. CMS, Physician Fee Schedule look-up tool — checking any code and locality on CMS’s own tool
6. CMS Medicare Claims Processing Manual, chapter 5, section 20.2 — therapy billing rules for timed codes
7. US Attorney’s Office, Eastern District of Michigan (March 2026) — the March 2026 group therapy settlement

This guide is general information about the 2026 Medicare physician fee schedule as of October 26, 2026. It is not billing or legal advice. Amounts are calculated from CMS’s published files and can differ slightly from your remittance; coverage and documentation rules decide whether a service is paid.