Our Pre-Rulemaking Comment Letter to CMS (and Why Every Therapy Professional Should Read It)

Something important is happening in Washington right now. The tides are shifting, and it is opening a door for the therapy professions that has not been this wide in decades.

At the Department of Health and Human Services (HHS)—and within the Centers for Medicare and Medicaid Services (CMS)—leaders are sharpening their focus on healthcare efficiency, cost reduction, and a fundamental rethinking of where federal healthcare dollars should flow. That agenda—prevention over intervention, conservative care over costly procedures, keeping people healthier and out of the hospital longer—is core to what we do as OT, PT, and SLP professionals. But due to a long history of our care being undervalued and underleveraged, we’ve never had the opportunity to prove our cost-effective power at scale.

That’s what this letter is about.

I recently submitted the formal pre-rulemaking comment letter below to CMS Administrator Dr. Mehmet Oz and his leadership team ahead of the CY 2027 Medicare Physician Fee Schedule rulemaking cycle. It is the most substantive, detailed policy argument we have made on behalf of this profession, and I am sharing it here in full because I want our community to be fluent in this argument and its terminology. If we are going to take advantage of the massive opportunity in front of us, we must present ourselves as a united front. We all need to speak up—loudly.

Most years, we wait until the official Final Rule comment period opens before we start having these conversations in the therapy community. But this year, we can’t afford to wait. We can’t afford to not be ready. The opportunity is just too big. When the public comment window opens in July, I want us to flood CMS with letters from OTs, PTs, and SLPs from every corner of the country. Those comments are read and counted, and when hundreds of healthcare professionals send letters that reflect a coherent, evidence-based argument, they carry real weight.

This letter makes the data-backed case that therapists are one of the most powerful deflationary tools available to CMS: uniquely positioned to reduce musculoskeletal surgery rates, hospital readmissions, opioid prescriptions, and costly fall-related hospitalizations. It also argues that our payment structure is unfair and structurally incompatible with the role the U.S. healthcare system needs us to play. And it lays out, in specific regulatory detail, what CMS can do about it right now.

So, please—take the time to read it and understand it. Familiarize yourself with the language so we can all confidently rally around it when the time comes. This could be a historic moment for our professions. Let’s not let it go to waste!

Download a PDF copy of the letter here to save, share, and reference when the comment period opens.

Read the 2026 Therapy Reimbursement Guide and the 2026 Advocacy Playbook for PT and OT Professionals.

Therapy as Deflationary Tool: The OT Potential CMS Pre-Rulemaking Comment Letter

March 29, 2026

Dr. Mehmet Oz, Administrator
Centers for Medicare & Medicaid Services
Department of Health and Human Services
7500 Security Boulevard
Baltimore, MD 21244

Chris Klomp, Director of Medicare and Deputy Administrator
Senior Advisor to HHS Secretary Robert F. Kennedy Jr.
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244

Abe Sutton, Director of CMMI and Deputy Administrator
Centers for Medicare & Medicaid Services 
7500 Security Boulevard
Baltimore, MD 21244

Attention: CY 2027 Medicare Physician Fee Schedule — Pre-Rulemaking Comment Submission

Re: Pre-Rulemaking Comment on the CY 2027 Medicare Physician Fee Schedule — Revaluation of Occupational and Physical Therapy Services; Functional Scope of Practice Expansion; Integration of Rehabilitation Therapy into the Advanced Primary Care Team; and the Role of Therapists as a Deflationary Lever in Medicare Spending

Dear Administrator Oz, Director Klomp, and Director Sutton:

Executive Summary

OT Potential is an education and advocacy platform dedicated to the professional advancement of occupational therapists (OTs) and physical therapists (PTs). We write in advance of the CY 2027 Medicare Physician Fee Schedule (MPFS) rulemaking cycle to open a substantive dialogue with CMS about the structural undervaluation of rehabilitation therapy services and to propose a coordinated strategy that aligns the professions of OT and PT with the Administration’s most important policy priorities.

This letter makes five overarching arguments:

1. Therapists are among the most potent deflationary tools available to CMS—uniquely positioned to reduce MSK surgery rates, hospital readmissions, opioid prescribing, and fall-related hospitalization—but the current payment system offers them no financial path to play that role sustainably.

2. Occupational and physical therapists have the clinical capacity to serve as a frontline prevention and chronic disease workforce—but inadequate reimbursement for billable services eliminates the bandwidth to do so at scale.

3. The current weight of reimbursement for therapists under the MPFS is structurally incapable of capturing what therapists actually do. Therapy’s scope of practice is wide. Much of what OTs and PTs do every day is clinically equivalent to services for which physicians and advanced practice providers have dedicated, well-valued codes. We do not have equivalent codes. That is a solvable regulatory problem.

4. CMS has the existing rulemaking authority to make targeted, high-impact changes that would begin to close these gaps: practice expense RVU modernization that incorporates current costs, tiered evaluation code revaluation, prevention-focused G-codes, MPPR reform, new care coordination and interprofessional consultation codes, and a suspension of the PTA/OTA payment differential pending an access impact study.

5. CMS should treat this letter not as a one-time comment but as an invitation to begin a structured, ongoing dialogue that becomes a sustained engagement.

We applaud CMS’s efficiency adjustments in the CY 2026 final rule and the non-facility PE RVU increases that appropriately recognized the higher overhead costs of office-based practice. We are asking CMS to extend that same logic to therapy practices. They are overwhelmingly office-based, carry substantial modern overhead costs, and whose PE inputs still reflect data from 2008. We ask that you redirect a share of the value freed by efficiency adjustments toward therapy evaluation, prevention, and care coordination services and their codes.

Section I: How We Got Here — The History Behind the Gap

To engage CMS meaningfully about where we need to go, we should start with an honest account of how we arrived where we are. The payment gap facing physical and occupational therapists is not an accident. It is the accumulated result of structural decisions made in a different era, for different problems, under fundamentally different assumptions about what drives healthcare costs.

A. The 1929 Origins of Procedural Bias

When Blue Cross created the first third-party reimbursement model in 1929, the design logic was actuarial: cover discrete, predictable, procedure-based medical events because costs could be controlled and overutilization could be limited. Preventive care, patient education, care coordination, and the kind of longitudinal relationship-building that therapy requires were deliberately deprioritized. They were considered harder to quantify and easier to overutilize.

The designers of that system made a decision that made actuarial sense in 1929: the average life expectancy of an American male was about 65 years old, chronic disease was not yet the dominant driver of healthcare costs, and the population they were insuring looked nothing like the aging, multi-morbid Medicare population we serve today. The insurance architecture they built was never designed for what we now know the healthcare system must do. But it calcified, and we have been operating inside its assumptions ever since.

B. 1965: When Private Bias Became Federal Policy

The private insurance logic of the Blue Cross era did not remain confined to commercial markets. When Congress passed the Social Security Amendments of 1965 and created Medicare, it needed a payment infrastructure it could implement quickly. It borrowed the one that existed. The procedural, actuarial architecture Blue Cross had built over the preceding four decades became the foundation of the federal program that would define how an entire generation of providers were categorized, coded, and compensated. Physical and occupational therapy entered Medicare not as primary clinical services, but as ancillary benefits that were supplemental to physician care, dependent on physician referral, and valued accordingly. That categorization was never reconsidered. It was simply inherited by every payment reform that followed.

B. The RVU Framework Codified the Gap

In the 1980s, the procedural bias of the Blue Cross era was institutionalized through the Relative Value Unit framework adopted by CMS. As you know, the RVU system assigned value to medical services based on physician work, practice expense, and malpractice risk. The process for setting those values was driven by the AMA’s Relative Value Update Committee, a physician-dominated body that naturally valued physician services most highly.

Therapy entered that framework not as a cognitive, longitudinal, behavior-change-focused clinical service, but as a set of procedure codes.

Most therapy codes are time-based, valued well below other time-based providers, and fail to capture the complex clinical reasoning, judgment, care coordination, and patient education that occur during every therapy session. The gap between what a 15-minute therapy unit reimburses (approximately $30) and what a primary care physician bills for a similar time investment under a single E/M code (approximately $90 or more) is not a reflection of the clinical value delivered. It is a reflection of who controlled the valuation process.

C. Budget Neutrality Made Undervaluation Permanent

Of course, the Medicare Physician Fee Schedule operates under statutory budget neutrality, so any change that increases spending for one group of providers must be offset by decreases elsewhere. This creates a zero-sum environment in which every dollar redirected toward primary care, behavioral health, or new service categories comes partly at the expense of everyone else.

Therapy has been on the losing side of this equation systematically. The most recent significant example: when CMS implemented G2211 in 2024—a new add-on code recognizing the longitudinal complexity of primary care E/M visits—the estimated $3.3 billion annual cost triggered a 2.17% budget neutrality adjustment that cut reimbursement across the fee schedule. Approximately 90% of that adjustment was attributable to G2211.

Specialties that don’t bill office E/M visits, including rehab therapists, were cut to fund the increase for primary care. CMS rightly protected behavioral health providers from that cut. Therapists were not protected, but we argue should have been. We argue primary care physicians, behavioral health providers, and physical and occupational therapists are the “primary care triad” and the future of advanced primary care practices.

Then for January 1, 2025, behavioral health providers gained access to new interprofessional consultation G-codes (G0546–G0551) that recognized the cognitive and coordinating work they do alongside other providers. PTs and OTs do equivalent work and have equivalent scope. However, they do not have equivalent codes. That asymmetry represents both the problem and the opportunity this letter is designed to address.

D. The Vicious Cycle the Current Structure Creates

Because the MPFS compensates only timed, procedure-level therapy codes, it has created powerful incentives for high-volume, visit-intensive care delivery. Overhead consumes more than 50 percent of clinic revenue in many outpatient settings. The budget-neutral PFS has no Medical Economic Index update for therapy. RVU misweights compress revenue. The practice expense inputs embedded in current therapy codes still reflect 2008 data, while the actual costs of running an outpatient therapy practice—electronic documentation systems, infection control supplies, telehealth infrastructure, and the wages of therapy assistants—have grown substantially.

The result is a profession trapped on a fee-for-service treadmill: exchanging time for money at rates that cannot sustain the clinical infrastructure, the evaluative depth, or the care coordination capabilities that would make therapists indispensable members of the advanced primary care team. The system pays only for the intervention and nothing for the judgment, the prevention, or the coordination that surrounds it.

E. The Cost of Underinvestment

The financial consequences of systematically undervaluing therapy are not abstract. Falls among Medicare beneficiaries cost the program an estimated $50 billion annually. That’s a figure that does not account for the downstream costs of hospitalization, skilled nursing placement, and functional decline that follow. Musculoskeletal conditions are the leading driver of opioid prescribing in the United States, yet physical therapy (the intervention with the strongest evidence base for non-pharmacologic pain management) remains financially inaccessible to millions of patients because low reimbursement rates have forced high-volume, visit-intensive practice models that prioritize throughput over early intervention.

Preventable hospitalizations attributable to functional decline, deconditioning, and unmanaged chronic disease burden Medicare by hundreds of billions of dollars each year. Physical and occupational therapists are clinically positioned to intercept each of these cost drivers at the front end. The payment system has made that interception structurally impossible. What CMS has saved on the reimbursement side, it has spent many times over on the acute care side.

Six-Year Reimbursement Divergence Between Primary Care and Behavioral Health and Therapy Professionals

🟢 Payment Gain / Expansion
🔵 Major Structural Win
🔴 Cut or New Burden
⚪ Neutral / Mixed

🟢 Payment Gain / Expansion 🔵 Major Structural Win 🔴 Cut or New Burden ⚪ Neutral / Mixed

Section II: Therapists as a Deflationary Lever

A. The Economic Evidence

The APTA’s 2023 Economic Value of Physical Therapy in the United States report, commissioned from Nous, an international management consultancy, provides rigorous economic modeling across eight high-prevalence conditions using conservative Quality Adjusted Life Year (QALY) methodology. The average net economic benefits per episode of physical therapist care, relative to standard alternative treatments, include:

• Osteoarthritis of the knee vs. glucocorticoid injection: $13,981 net benefit per episode; cost per QALY of $51,906, compared to a value of statistical life year (VSLY) benchmark of $251,634.

• Carpal tunnel syndrome vs. surgery: $39,533 net benefit per episode; cost per QALY of $41,206.

• Acute low back pain vs. usual primary care: $4,160 net benefit per episode; cost per QALY of $43,624.

• Falls prevention vs. no intervention: $2,144 net benefit; cost per QALY of $13,425—the lowest cost-per-QALY of any condition analyzed, and directly relevant to Medicare’s largest high-cost population.

• Vascular claudication monitored exercise vs. optimal medical care alone: $24,125 net benefit per episode.

These estimates are deliberately conservative: they exclude indirect benefits such as productivity improvements and use the lowest defensible VSLY values. The true economic contribution of physical therapist and occupational therapist services to the Medicare program is almost certainly larger.

B. Musculoskeletal Spend: The $420 Billion Opportunity

Musculoskeletal conditions represent approximately one-sixth of all U.S. healthcare spending—roughly $420 billion annually. Among the highest-cost Medicare beneficiaries (top 5% of spend), MSK and back pain are the third most commonly treated conditions, affecting more than 30% of that cohort. Low back and neck pain generated the highest condition-specific healthcare expenditure in the United States in 2016 at $134.5 billion.

Early access to physical therapy for acute low back pain produces mean episode charges of approximately $1,467 compared to $6,193 for patients receiving advanced imaging first—a cost difference of more than $4,700 per episode. Early PT patients also exhibit significantly lower rates of surgery, injections, and emergency department visits.

The math is straightforward: routing a meaningful share of the millions of annual Medicare low back pain episodes through early physical therapy rather than the imaging-to-specialist-to-procedure pathway would generate system-level savings that dwarf the nominal cost of the policy change required to make it happen.

C. Falls: The Most Predictable High-Cost Crisis in Medicare

Falls represent one of the most predictable, most costly, and most preventable drivers of acute care spending in Medicare. In 2015, medical costs associated with falls-related injuries exceeded $50 billion annually, with Medicare bearing approximately $28.9 billion of that burden. Physical and occupational therapists are the clinicians most skilled at fall risk identification and prevention. The Otago Exercise Program, a home-based physical therapist-delivered intervention, has demonstrated a 40% reduction in falls over a one-year period.

Yet the current MPFS provides no mechanism for paying therapists to conduct proactive, prevention-oriented fall risk assessments for high-risk Medicare beneficiaries in the community setting. Payment to “treat” falls is available only after a patient presents for treatment of a problem, not for identifying and mitigating the risk before the fall, the fracture, and the hospitalization occurs.

D. Opioid Stewardship

Early PT access has been shown to reduce the odds of long-term opioid use by 7 to 16% across musculoskeletal conditions and by approximately 66% for chronic knee pain. A 2022 study found that symptomatic knee osteoarthritis opioid prescribing generated $14 billion in total costs over a population’s lifetime in 2021, with indirect costs including criminal justice and diversion. For low back pain, carpal tunnel syndrome, lateral epicondylitis, and osteoarthritis, physical therapy represents a first-line intervention with superior long-term outcomes and substantially lower downstream cost than the opioid pathway.

E. Post-Surgical Rehabilitation and Hospital Readmissions

The Transforming Episode Accountability Model (TEAM), effective January 1, 2026, creates mandatory financial accountability for participating acute care hospitals for total Medicare spend during hospitalization and for 30 days post-discharge for five high-volume surgical procedures. Research demonstrates that initiating physical therapy within one week of discharge after joint arthroplasty keeps readmission probability below 6%. Beginning therapy in the second week increases readmission odds 2.39-fold; commencing therapy after 14 days triples readmission odds. Early, high-quality outpatient rehabilitation therapy is the most powerful post-acute lever hospitals have for managing TEAM episode costs.

Section III: The Missing Leg of the Primary Care Triad

CMS Administrator Dr. Mehmet Oz has explicitly named a shift from sick care to prevention and wellness as a central priority for this Administration. The CMMI’s 2025 strategic direction articulates three pillars: promote evidence-based prevention, empower people to achieve their health goals, and drive choice and competition. These priorities map almost perfectly onto what OTs and PTs are trained to do.

There is, however, a structural gap between this vision and its implementation: the advanced primary care “three-legged stool” is missing its third leg. The first is the physician and/or advanced practice provider managing medical diagnosis, chronic disease, and complex medical decision-making. The second (now well-established through years of policy and payment innovation) is the behavioral health provider managing mental health, substance use, and the psychosocial dimensions of chronic disease.

The third leg? The rehabilitation therapist(s) managing functional health, musculoskeletal risk, fall prevention, activity limitation, ADL performance, pain, and the practical work of staying independent as we age. Maybe primary care remains so wobbly because it’s missing a leg.

So behavioral health integration is now common in sophisticated primary care models. Pharmacist integration is growing. But rehab therapy is the notable, systematic absence, and that absence has a cost the system is bearing without clearly seeing it.The behavioral health precedent is instructive. Over a sustained period of engagement, behavioral health providers made a clinically grounded, economically supported, strategically organized case for their services and professions to be elevated and worthy of investment by CMS. CMS rightfully responded with new G-codes, higher work RVU weights, access to interprofessional consultation billing, and integration into CMMI models. No single legislative win was required. The changes came through rulemaking. That is our model.

Section IV: The Functional Scope Problem: We Cannot Do What We Are Capable Of and our Licenses Permit

CMS’s focus on access and affordability is often framed as a workforce question: how do we get enough providers to meet the demand? The standard answer has been expanded scope of practice that includes allowing nurse practitioners to practice independently, expanding pharmacist prescribing authority, and so on. These are legitimate workforce solutions.

But there is a different dimension of access that this Administration’s priorities demand and that the current MPFS actively prevents: functional scope of practice expansion. Physical and occupational therapists have relatively broad statutory scopes of practice, even while statute still categorizes them as “suppliers.” What we lack is the infrastructure that would allow us to bill for the full range of clinically appropriate services we are trained and licensed to deliver. The result is both that therapists are underpaid and that therapists cannot function in the ways the system most needs them to function. This is a missed opportunity for addressing the upstream care needs of the population.

Here is the core issue: therapists do not bill E/M codes. This matters more than it first appears. The E/M code family (99202–99215) and the broader family of physician and advanced practice provider codes that attach to it like preventive medicine visits, chronic care management, transitional care management, care complexity add-ons, and interprofessional consultations, collectively represent the payment architecture for cognitive, longitudinal, preventive, and coordinating care in American medicine.

Therapists are excluded from all of it, not because the clinical work we do is different, but because the definitions of covered services and the coding conventions that flow from them have never been updated to reflect what therapists actually do.

This is the distinction between scope-of-practice expansion (which requires Congressional action on statutory definitions) and functional scope improvement (which CMS can pursue through HCPCS coding authority, G-code creation, and the annual rulemaking process). We are asking CMS to use every available regulatory tool to close the gap between what therapists are clinically capable of and licensed to do and what the payment system currently permits them to bill for.

Concrete Examples: Physician and APP Code Equivalents for PT and OT

Below are specific examples of codes that physicians and advanced practice providers use today to bill for work that physical and occupational therapists are equally or better qualified to perform—and for which CMS has the authority to create parallel G-codes or expand provider eligibility through rulemaking:

1. Annual Wellness Visit — Functional Assessment Component (G0438/G0439)

Medicare’s Annual Wellness Visit explicitly requires a “functional ability and level of safety” assessment, including fall risk screening, activities of daily living, and home safety evaluation. These are precisely the domains in which PTs and OTs are the most qualified clinicians in the healthcare system. Yet AWV delivery and billing is currently restricted to physicians and qualified non-physician practitioners. CMS could, through rulemaking, create a G-code that allows a physical or occupational therapist to provide and bill for the functional assessment component of an AWV—either as a co-provider or as a stand-alone service. This would not require a new Medicare benefit category; it would require a new G-code and a coverage determination. CMS could require its use only for physical and occupational therapy practices that achieve certain interoperability requirements, for example, aligned with CMS’s data interoperability goals.

2. Chronic Care Management (99490, 99491, 99487, 99489)

Chronic care management codes pay for 20 or more minutes per month of non-face-to-face care coordination and management for patients with two or more chronic conditions. Functional limitations like chronic low back pain, osteoarthritis, peripheral neuropathy, and stroke sequelae are chronic conditions. Therapists managing these patients already perform care plan review, patient outreach, coordination with primary care, and goal monitoring between visits. But they cannot bill for any of it. A G-code parallel to the CCM family, attached to a therapy plan of care rather than a physician’s E/M visit, would be within CMS’s existing rulemaking authority and would follow the exact template CMS used when it created behavioral health-specific care management G-codes.

3. Transitional Care Management (99495, 99496)

Transitional care management codes pay for care coordination in the 30 days following a discharge from a hospital, skilled nursing facility, or other inpatient setting. Outpatient physical and occupational therapists routinely see post-discharge patients during exactly this window and perform exactly this coordination: communicating with discharging facilities, reviewing medications and equipment needs, assessing functional recovery, and alerting primary care providers to complications or changes. They cannot bill for any of it. A parallel G-code for therapy transitional care management would align with the TEAM model’s goals and could be piloted in TEAM-participating markets.

4. Cognitive Assessment (G0505 and Related)

Occupational therapists are specifically trained in standardized cognitive assessment, including assessment of executive function, memory, attention, and the impact of cognitive limitations on ADL performance and safety. The Medicare cognitive assessment code G0505, which pays for structured cognitive evaluation associated with care planning for beneficiaries with cognitive impairment, is currently limited to physicians and other qualified healthcare professionals who do not include OTs under current billing policy. CMS has the authority to expand provider eligibility for G0505 to include occupational therapists, for whom this work is core professional training rather than an adjunct service.

5. Health Behavior Assessment and Intervention Codes (96150–96161)

These codes cover health behavior change services for patients with primary physical diagnoses, which is exactly the kind of motivational interviewing, activity pacing counseling, pain catastrophizing management, and behavioral change coaching that OTs and PTs deliver routinely.

These codes are currently limited to licensed psychologists and other behavioral health providers. The clinical work, however, is not unique to behavioral health. A significant portion of every rehab therapy session involves behavior change support like:

• helping a patient with chronic pain reduce fear-avoidance behaviors

• coaching a post-stroke patient on activity modification

• supporting an individual at risk of falls in developing safe movement habits and improved balance

Expanding access to the health behavior assessment and intervention code family to qualified OTs and PTs, or creating parallel G-codes for this work, is within CMS’s authority and would recognize what is already happening in every outpatient therapy clinic in the country.

6. Longitudinal Care Complexity Add-On (G2211)

G2211, the longitudinal care complexity add-on created in 2024, recognizes the additional resources required when a provider serves as the continuing focal point for a patient’s care over time. Therapists who manage patients with chronic MSK conditions, post-stroke deficits, or complex functional presentations do exactly this kind of longitudinal work. They cannot attach G2211 to a claim because G2211 requires a base E/M code, and therapists cannot bill E/M codes.

The solution is not to give therapists E/M billing rights, of course. That would require Congressional action. We see the solution as a parallel G-code for therapists that accomplishes the same policy purpose and attaches to therapy evaluation or treatment codes instead. These are services that represent services therapists are already providing, for which they are already spending clinical time, and for which the payment system currently provides nothing in return for their cognitive work. The downstream impact on access, workforce sustainability, and Medicare costs would be substantial. If therapists can be recognized and compensated for this work, it becomes economically rational to invest in it.

Section V: What CMS Can Do — Specific Regulatory Requests

Strategic Context: Exercising Regulatory Discretion in a Budget-Neutral Framework

OT Potential recognizes that the Conversion Factor (CF) is largely governed by statutory formulas outside of CMS’s direct control. You can’t increase the conversion factor if utilization and RVU weights don’t leave any room for that.

However, the Relative Value Unit (RVU) weights are the primary mechanism through which CMS exercises its clinical and economic judgment. In a budget-neutral environment, CMS has the authority to ensure that RVU weights accurately reflect the modern clinical value and downstream cost-savings potential of each service. Even when the CF is constrained by the available budget, CMS can and should protect the sustainability of high-value, deflationary services like therapy by rebalancing RVU weights to reflect contemporary practice costs and evidence-based outcomes.

CMS has substantial authority within existing statutory frameworks. To that end, the following requests are organized by what CMS can accomplish through the MPFS rulemaking process. We strongly urge CMS to exercise the full extent of this authority in the CY 2027 cycle and to signal clearly to Congress where additional statutory tools are needed.

A. Efficiency Adjustment Re-allocation: From Overvalued Procedures to High-Value Care

We applaud the CY 2026 MPFS final rule’s efficiency adjustment framework, specifically the application of a −2.5% work RVU adjustment to certain non-time-based procedural codes that have accrued efficiency gains over time. We urge CMS to view the value freed by these adjustments not merely as a budget-cutting tool, but as a critical pool of resources for strategic re-allocation.

Request: We ask CMS to designate therapy as a primary recipient of this re-allocation. As a uniquely deflationary workforce, therapy provides the exact preventive and cognitive services that reduce the need for the very procedures CMS is now adjusting for efficiency. Redirecting a meaningful share of these savings toward therapy evaluation codes (97161–97167) and new care coordination G-codes is a fiscally responsible investment that protects Medicare solvency while supporting the shift toward advanced primary care.

B. Lever 1: Practice Expense RVU Modernization

The practice expense (PE) RVU components for outpatient physical and occupational therapy codes have not been comprehensively updated to reflect contemporary practice costs. The current PE methodology relies on survey data from 2008. In the 17 years since that data was collected, the cost structure of outpatient therapy has changed materially:

• Electronic health record systems and the associated staff time, licensing fees, and compliance infrastructure represent significant and recurring overhead that was not part of outpatient therapy practice in 2008.

• Infection control supplies—personal protective equipment, sanitization protocols, and equipment turnover procedures—have become a standard and substantial practice expense, particularly following the COVID-19 pandemic.

• Telehealth equipment, patient-facing technology platforms, and the clinical staff time required to support remote monitoring and virtual care delivery represent a new category of practice expense that did not exist in the 2008 baseline.

• Therapy assistant wages have grown. Bureau of Labor Statistics data report median annual wages for physical therapist assistants of $65,510 (approximately $31.50/hour) and for occupational therapist assistants at comparable levels. PE inputs that underestimate assistant wages understate the true cost of delivering therapy services.

Request: We ask CMS to undertake updated specialty-specific practice expense surveys for outpatient rehabilitation therapy in the CY 2027 rulemaking cycle, and to adjust the PE RVU components of core therapy codes—including 97110, 97112, 97116, 97140, and 97530—to reflect current resource inputs.

C. Lever 2: Tiered Work RVUs for Evaluation Complexity (97161–97167)

In 2017, CMS adopted CPT codes 97161 (low complexity), 97162 (moderate complexity), and 97163 (high complexity) to differentiate physical therapy evaluation visits by clinical complexity. Despite meaningful differences in history-taking breadth, examination components, comorbidity management, and clinical decision-making time, all three codes currently carry the same work RVU of 1.54. The same flat-rating applies to occupational therapy evaluation codes 97165–97167.

CMS has already established the principle that evaluation complexity warrants differentiated RVU weighting in the E/M code set for physicians. The same clinical logic applies here. High-complexity therapy evaluations involving patients with multiple comorbidities, complex functional presentations, fall risk, post-surgical complications, or oncologic diagnoses require substantially more time and clinical judgment than low-complexity evaluations of straightforward acute musculoskeletal conditions. Flat-rating these evaluations discourages therapists from accepting complex patients and fails to reflect the resource inputs the system is actually consuming.

Request: We ask CMS to conduct a formal review and differentiated valuation of CPT codes 97161, 97162, 97163, and re-evaluation code 97164 for the CY 2027 MPFS, assigning work RVUs that reflect the differential time, skill, and clinical complexity of each code level. We further request the same review be applied to occupational therapy evaluation codes 97165–97167 and re-evaluation code 97168.

D. Lever 3: Prevention-Focused Functional Assessment G-Codes

CMS currently has no mechanism for paying occupational and physical therapists to conduct proactive, prevention-oriented functional or fall risk assessments for high-risk Medicare beneficiaries who have not yet presented with an acute problem. This is a critical gap given the established evidence base for fall prevention and the cost profile of fall-related hospitalization.

CMS has authority through its HCPCS coding process to create new billing codes for services that do not yet have a payment pathway. CMS has used this authority for behavioral health preventive services, for Annual Wellness Visit components, and for caregiver training.

Because physical and occupational therapists cannot bill E/M codes, the correct template is not to extend existing physician codes but to create parallel G-codes that attach to therapy service codes. This is exactly the model CMS used when it created G0546–G0551 for clinical psychologists and social workers.

Request: We ask CMS to work with OT and PT stakeholders to develop and implement G-codes for: (1) Therapist-led functional fall risk assessment for community-dwelling Medicare beneficiaries age 65 and older with identified risk factors; (2) Therapist-led home safety and activity limitation assessment for beneficiaries at risk of functional decline or institutionalization; and (3) Therapist-delivered preventive intervention programs, including falls prevention exercise programs with demonstrated evidence bases such as the Otago Exercise Program. These codes should carry non-facility PE values reflecting actual resource inputs and should be payable for beneficiaries who meet clinically defined risk criteria.

E. Lever 4: Care Coordination and Interprofessional Consultation

Physical and occupational therapists routinely perform or should perform essential care coordination activities such communicating with physicians and other clinicians providing care to their patients, sharing clinical findings relevant to a patient’s annual health risk assessment, and coordinating with care managers in ACO arrangements. These activities are precisely what the advanced primary care team model requires to reduce avoidable utilization and improve population health outcomes. However, the current MPFS provides no direct mechanism for therapists to be compensated for this cognitive, non-face-to-face work.

The Behavioral Health Precedent: In the CY 2025 rulemaking, CMS established a vital precedent by creating interprofessional consultation G-codes (G0546–G0551) specifically for clinical psychologists and clinical social workers. These codes recognize that managing complex patients requires significant communication between the treating behavioral health provider and the primary care team. Rehabilitation therapists perform clinically equivalent work—sharing expertise on fall risk, musculoskeletal complexity, and functional limitations—yet they remain excluded from this specific payment architecture.

Request: We ask CMS to create therapy-specific interprofessional consultation G-codes parallel to those created for behavioral health providers (G0546–G0551). These codes should:

• Mirror the Behavioral Health Model: Attach to therapy evaluation codes (97161–97163; 97165–97167) or treatment codes rather than physician E/M codes.

• Support Integrated Care: Compensate therapists for the time spent consulting with the primary care team to coordinate MSK and movement impairment management, home safety, and functional recovery strategies.

• Modernize Care Coordination Reimbursement: Expand the Communication Technology-Based Services (CTBS) framework to include therapy-specific consultation, ensuring the MPFS reflects the cognitive work required to manage patient safety and functional outcomes in a team-based setting.

F. Lever 5: MPPR Reform Through Rulemaking

The Multiple Procedure Payment Reduction (MPPR) applies a 50% reduction to the practice expense component of payment for the second and subsequent “always therapy” procedures in a single session, while leaving work and malpractice RVUs paid at 100%. The MPPR was originally applied to imaging procedures on the theory that when multiple services are furnished together, certain practice expense activities like patient preparation and equipment setup occur only once. That theory holds for imaging. It does not hold for therapy.

There is no meaningful shared setup between a unit of therapeutic exercise and a unit of manual therapy. There is no efficiency gain when a therapist provides neuromuscular reeducation after therapeutic exercise. The therapist is the setup, and that clinical engagement does not diminish with a second distinct modality. The result is a policy that penalizes comprehensive care, incentivizes fragmented visits, and creates perverse incentives that run directly counter to the coordinated, patient-centered care model CMS is trying to build. When two distinct therapeutic modalities are furnished in the same session to address related but separate functional deficits, the resources required are additive, not shared.

Critically, Congress did not mandate the specific 50% therapy reduction. Section 3134 of the Affordable Care Act directed the Secretary to identify potentially misvalued codes frequently billed together. CMS chose to apply that authority to therapy and set the specific reduction rate through rulemaking.

CMS implemented the therapy MPPR through rulemaking, and CMS has the regulatory authority to reduce or eliminate it through the same process, if presented with compelling evidence that the policy does not reflect actual therapy service economics. Interventional pain specialists won a partial RVU restoration in 2025 using this type of profession-specific justification.

Request: We ask CMS to exercise its existing rulemaking authority to exempt therapy services from the MPPR when distinct therapeutic modalities are provided.

G. Lever 6: Suspend the 15-Percent Therapist Assistant Payment Differential to Preserve Clinical Access

The 15% payment reduction for services furnished by physical therapist assistants (CQ modifier) and occupational therapist assistants (CO modifier) was intended to mirror the reimbursement model for Advanced Practice Providers (APPs) in the physician space. However, applying this model to rehabilitation therapy is a false equivalent that ignores the fundamental economic and clinical realities of our profession. We request that CMS suspend this differential immediately.

The False Equivalence of the Physician Model: In the physician model, a primary care physician typically earns significantly more (often double) than a Nurse Practitioner (NP) or Physician Assistant (PA). When an NP or PA bills at 85% of the Physician Fee Schedule rate, the practice’s margin remains sustainable because the base cost of the clinician is lower.

In contrast, the pay gap between a therapist and an assistant is much narrower (approximately $85 thousand per year for PTs and OTs–significantly lower than advance practice providers named in statute -vs. $60 thousand per year for PTAs and COTAs), yet the 15% reduction applies to the entirety of the service when provided by an assistant. Because therapy reimbursement is already significantly lower than physician E/M rates, this 15% “hit” is not a minor adjustment, but is often a difference between a clinic staying open or closing its doors.

Barriers to Skilled Treatment and Hiring: The differential has created a perverse incentive where clinics are increasingly choosing not to hire PTAs and COTAs. Even though these professionals are specifically trained to be the skilled treatment experts who carry out therapist prescribed and updated plans of care, they now offer less financial flexibility and a smaller reimbursement margin. This trend undermines the intent of the assistant role:

• Reduced Flexibility: Clinics cannot justify the administrative burden of the CQ/CO modifiers alongside a 15% revenue loss.

• Strained Access: When clinics stop hiring assistants, waitlists for patients grow, and the remaining therapists are forced to balance high-level cognitive work with high-volume treatment, leading to burnout and diminished care quality.

Economic Efficiency and the Future Workforce: The cost of OT and PT doctoral education is rising at an unsustainable rate. To keep the profession viable, we must utilize the efficiency of PTA and COTA education, which produces highly skilled treating professionals in a shorter timeframe.

• Optimizing Professional Roles: The most efficient care model allows OTs and PTs to focus on the high-cognitive work of evaluating, providing therapy diagnoses and prognoses, and establishing care plans.

• Expanding access to PT and OT Evaluations: The current structure hinders availability of PTs and OTs to offer available time slots for evaluations of new patients, which limits access to care. This limited access leads to waiting lists and patients seeking avoidable and unnecessary care at higher cost providers like orthopedic surgeons or seeking advanced imaging, also often unnecessary and avoidable.

• Assistant Partners: PTAs and COTAs should be empowered as the primary partners in delivering the treatment portion of care plans established by the PT or OT with the patient. The 15% differential actively punishes this efficient, team-based approach.

Grave Concern for Vulnerable Populations: While the impact on rural providers is well-documented, we hold a grave concern for all medically underserved and low-income populations. These populations disproportionately rely on clinics that utilize assistants to maintain high-volume, low-cost access to care. By devaluing assistant-led treatment, CMS is effectively reducing the availability of skilled therapy for the very patients who face the greatest barriers to achieving their health goals.

Request: We ask CMS to suspend the 15-percent payment differential for PTAs and COTAs. Because assistants are already prohibited from billing evaluation or re-evaluation codes, the high-cognitive work of the episode is already exclusively reimbursed at the therapist rate; imposing a secondary reduction on assistant-led treatment codes is a redundant penalty that discourages the efficient use of skilled labor and threatens care delivery for high-needs populations.

Section VI: CMMI Models and the Pathway to Value-Based Integration

Several current and upcoming CMMI models create urgent and exciting opportunities and obligations for physical and occupational therapy.

A. TEAM Model

The Transforming Episode Accountability Model, effective January 1, 2026, creates mandatory financial accountability for participating acute care hospitals for total Medicare spend for 30 days post-discharge following five high-volume surgical procedures. Reducing SNF utilization and enabling home discharge with outpatient therapy is the primary mechanism through which TEAM hospitals can manage episode costs. Physical and occupational therapists are the essential workforce for that goal. We urge CMS to clarify that TEAM-specific payment arrangements can be constructed that allow therapy practices to enter into formal contractual relationships with TEAM hospitals and to share in the savings they help to generate, and to ensure that outpatient therapy services are adequately valued to support this model.

B. Ambulatory Specialty Model (ASM)

The ASM, proposed for launch in January 2027, targets specialists treating heart failure and low back pain with mandatory two-sided risk accountability. We strongly support the goal of reducing specialty care costs and variability in low back pain. We ask CMS to build into the ASM explicit requirements for collaborative care agreements between participating specialists and physical therapy providers, and to ensure that the ASM’s performance measurement framework includes metrics for early PT referral and reduction in advanced imaging prior to therapy initiation.

C. ACCESS Model and MSK Chronic Condition Management

The ACCESS model, launching in mid-2026, allows digital health companies to become Medicare Part B providers and bill monthly codes for chronic condition management. OT Potential urges CMS to ensure that ACCESS model participants are required to partner and share data with licensed physical and occupational therapists for the musculoskeletal conditions in their scope. Digital care management without qualified therapist oversight for functional and MSK conditions risks substituting lower-quality care pathways for the evidence-based interventions therapists provide.

D. LEAD and MSSP — A Note on Data Infrastructure

Director Klomp’s background in real-time care coordination data networks, value-based care, and interoperability aligns directly with what the therapy professions need to demonstrate our population health impact. The data infrastructure that would allow physical and occupational therapists to share clinical findings with ACO care managers, flag high-risk patients for early intervention, and report downstream utilization outcomes is the same infrastructure CMS is building through interoperability requirements and the CMMI’s data strategy. We are asking to be included in that architecture—not as an afterthought, but as a designed participant.

ACO models including the Medicare Shared Savings Program and the upcoming Long-term Enhanced ACO Design model represent the most promising near-term structural pathway for therapists to participate in value-based care. The simplest example is that musculoskeletal conditions are among the highest-cost domains for ACO participants.

We ask CMS to encourage ACO participants to include physical and occupational therapy practices as formal ACO participants or preferred-providers under contract with the ACO, and to develop data-sharing infrastructure that allows therapy practices to receive beneficiary-level utilization data needed to demonstrate and optimize their impact.

Section VII: What Congress Controls—And Why CMS Should Advocate for Change

We recognize that several structural barriers require Congressional action. These include:

(1) A Medical Economic Index update in the MPFS, which has resulted in the 40% real-dollar decline in therapy reimbursement since 2002 when combined with other changes such as inclusion in MPPR and the PTA/OTA payment differential;

(2) establishment of a statutory pathway for physical and occupational therapists to qualify as Advanced APM participants, unlocking the 0.75% payment incentive currently available only to providers in qualifying models;

(3) legislation to permanently establish physical and occupational therapists as authorized Medicare telehealth providers—eliminating the cycle of short-term Congressional extensions that creates ongoing uncertainty for patients and practices;

(4) statutory changes to the Social Security Act definitions of covered therapy services in Sections 1861(p) and 1861(g) to expand the scope of what therapists can bill for under Part B, creating the statutory foundation for future rulemaking on the functional scope improvements described in Section IV.

(5) OTs and PTs being added in statute to the list of “practitioners” and removal from the list of “suppliers.”

We urge CMS to do everything within its existing authority as described in Section V and to use its significant policy credibility to communicate clearly to Congress where statutory change is needed. A comprehensive total cost of care analysis demonstrating that increased therapy investment reduces downstream Medicare spending is precisely the kind of evidence the Congressional Budget Office needs to score these changes as neutral or positive for the federal budget.

Section VIII: Our Commitment — An Invitation to Dialogue

OT Potential is committed to being a constructive, evidence-based partner in this conversation. We are prepared to:

• Coordinate with OT and PT professional associations, ACOs, primary care physician groups, and payer stakeholders to build the multi-stakeholder buy-in.

• Support the effort for therapy practices nationally to collect and aggregate clinical and utilization data (including downstream imaging, surgery, hospitalization, and opioid utilization rates by therapy vs. non-therapy care pathways) that will support the economic case for RVU rebalancing and new code creation.

• Partner with CMS to support PE modernization and MPPR reform

• Submit detailed and actionable comments in response to the upcoming MPFS 2027 Proposed Rule and make ourselves available as a trusted resource to CMS and the Innovation Center.

• Make our educational platform available to CMS staff and stakeholders to communicate the clinical and economic value of OT and PT to primary care physicians, ACOs, and policymakers who need to become our champions.

Occupational and physical therapists are not asking to be treated as a special interest group. We are asking to be recognized as what the evidence shows we are: a high-value, chronically underutilized, and financially unsustainable workforce that is critical to the population health and cost-reduction goals this Administration has committed to achieving.

The policy changes required to unlock that value are largely within CMS’s existing authority. The downstream savings they would generate are large. And the window to make them happen, when musculoskeletal and whole-person, patient-centered, patient-activated care is a policy priority, when the primary care integration framework is being actively built, and when the Administration’s prevention and affordability focus aligns exactly with what therapists do, will not stay open indefinitely.

Conclusion: A Vision for Integrated, Coordinated, Deflationary Care for Patients with Chronic Conditions

The Medicare Physician Fee Schedule was not designed for the healthcare system we have today. It was built for a different era, with different assumptions about what drives cost and constitutes value. OT Potential is committed to ensuring that the rehabilitation professions are not merely spectators to the necessary modernization of this system, but active drivers of its success.

We see the upcoming ACCESS Model as the pivotal opportunity for this transition. By focusing on multi-disciplinary teams and longitudinal care for chronic conditions, ACCESS creates the ideal environment for therapists to move beyond traditional silos. We strongly encourage our community of therapists to seek out and formalize partnerships with ACCESS Organizations and Accountable Care Organizations (ACOs) to align clinical incentives and improve the delivery of affordable, patient-centered care.

For patients struggling with chronic pain or complex functional limitations, the ACCESS framework offers a pathway toward patient-activated recovery. By integrating therapists early in the care continuum—supported by the interprofessional consultation and assistant-utilization reforms we have proposed—CMS can provide the self-management strategies that reduce reliance on high-cost, high-risk pharmaceutical and surgical interventions.

We look forward to advancing this message and serving as an active partner to CMS. We believe that the ACCESS Model will create a cascade of deflationary clinical care that improves quality, enhances patient safety, and ensures the long-term sustainability of the Medicare Trust Fund.

We were also excited to review the Long Term Enhanced ACO Design (LEAD) Model Request for Applications and note the potential we see for occupational and physical therapy professionals to participate. OT Potential will do its part to spread the message of the participation opportunities in LEAD to occupational and physical therapy professionals. The barriers to participation will be more easy to overcome when therapists embedded in advanced primary care practices is the norm. We believe that the future must become a reality.

We respectfully request a meeting with you to discuss how we can help bring our vision to fruition to help advance CMS’ goals and its vision for improved access and affordability of care at a lower cost.

Respectfully submitted,

Sarah Lyon, OTR/L
Founder and CEO, OT Potential

[email protected] | www.otpotential.com

Appendix A: Summary of Evidence Citations

American Physical Therapy Association / Nous Group. (2023). The Economic Value of Physical Therapy in the United States. APTA.

Fritz, J.M., et al. (2017). Cost-Effectiveness of Primary Care Management With or Without Early Physical Therapy for Acute Low Back Pain. Spine, 42(5), 285–290.

Rhon, D.I., et al. (2022). Cost-Effectiveness of Physical Therapy vs. Intra-articular Glucocorticoid Injection for Knee Osteoarthritis. JAMA Network Open, 5(1).

Mori, T., et al. (2017). Cost-Effectiveness of Combined Oral Bisphosphonate Therapy and Falls Prevention Exercise for Fracture Prevention in the USA. Osteoporosis International, 28(2), 585–595.

Florence, C.S., et al. (2018). Medical Costs of Fatal and Nonfatal Falls in Older Adults. Journal of the American Geriatrics Society.

Huizinga, J.L., et al. (2022). Societal Cost of Opioid Use in Symptomatic Knee Osteoarthritis. Arthritis Care & Research, 74(8), 1349–1358.

Dobson DaVanzo & Associates / AHCA-NCAL. (2023). Effects of the Payment Reduction for Therapy Assistant Services. Provider Magazine.

CMS Innovation Center. (2025, May 13). CMMI 2025 Strategic Direction White Paper. Centers for Medicare & Medicaid Services.

CMS. (2025, October 31). CY 2026 Medicare Physician Fee Schedule Final Rule (CMS-1832-F). Federal Register.

MedPAC. (2025, June). Report to Congress: Medicare Payment Policy.

Dieleman, J.L., et al. (2020). US Health Care Spending by Payer and Health Condition, 1996–2016. JAMA, 323(9), 863–884.

Strauss, D., PT, DPT. (2026, January/February). The 2026 Therapy Reimbursement Guide; The 2026 Advocacy Playbook for PT and OT Professionals. OT Potential Blog. www.otpotential.com.

Bureau of Labor Statistics, U.S. Department of Labor. (2024). Occupational Outlook Handbook: Physical Therapists; Occupational Therapist Assistants.

Final Word: This is Our Moment. Don’t Sit it Out!

I have been advocating on behalf of the OT profession for a long time, and I don’t say the words “this is the moment” lightly. But I truly believe it is.

The argument in this letter is not new—therapists have been underpaid and underutilized for decades, and the structural reasons for that go all the way back to 1929. What is new is the alignment—the intensified focus on healthcare cost reduction and prevention at the federal level combined with a profession that finally has the economic evidence to prove our value in a way policymakers can appreciate and act on.

We still have a long way to go, and this letter is just a starting point. To get us to our destination, we all need to help amplify this message; we all need to show up during the comment period to demand action. And that is exactly what I am asking you all to do.

You don’t have to be a policy expert, and you don’t have to write a letter as long as the one I shared here. You just have to speak up, in your own words, and share how the structural undervaluation of rehabilitation therapy is affecting your patients, your practice, and your ability to deliver the clinical and financial outcomes the research has proven you are capable of.

And, if you have questions, feedback, or just want to keep the conversation going, please drop a comment below! I am here to support in any way I can.

Download your PDF copy of the letter here, and keep it somewhere easy to find. Or better yet, share it with a friend!