Prepare your rehab therapy practice for changes in 2026

The end of the year often brings a flurry of activity, from closing out client files to planning for the holidays. It’s also the perfect time to look ahead and prepare your practice for the coming year. The healthcare landscape is constantly shifting, and 2026 is poised to introduce some important updates for rehab therapists. 

Getting ahead of these changes can feel like a lot, especially on top of your daily responsibilities. But you don’t have to figure it all out alone. We’ll walk you through the key industry and policy shifts on the horizon, breaking them down into simple and clear steps. Think of this as your roadmap to navigating the end of 2025 and starting the new year with confidence. 

Understanding the 2026 Medicare fee schedule 

Each year, the Centers for Medicare & Medicaid Services (CMS) updates its Physician Fee Schedule, which determines how much you get paid for your services. These numbers directly affect your practice’s revenue, so let’s explore what’s on the table for 2026. 

What is the conversion factor? 

At the heart of Medicare reimbursement is the conversion factor. You can think of it as a multiplier – it’s the base dollar amount that Medicare uses to calculate the payment for every CPT code. For 2026, CMS has proposed a 3.83% increase to this factor. While any increase is welcome, it’s important to see the full picture. 

On paper, it sounds hopeful – and it’s certainly better than another cut. But, if you dig a little deeper, you’ll see some new efficiency adjustments targeting untimed codes, like hot/cold packs and evaluations. 

For a busy therapy team, this means your bread-and-butter services could see changes in how they’re reimbursed. Tweaks in policy like this can feel small, but with over dozens or hundreds of sessions a month, it can add up. This means it’s crucial to review your most frequently used codes to understand (and plan for) the real impact on your practice’s finances. 

A bigger push toward value-based care 

A significant change to watch for is the introduction of dual conversion factors. In this system, providers participating in an Alternative Payment Model (APM) will have a different, potentially higher, payment multiplier than those who are not. An APM is a payment model that moves away from the traditional fee-for-service system. Instead, it offers financial incentives for providing high-quality, cost-effective care. 

This is a clear signal that CMS is serious about accelerating the shift to value-based care. If your practice hasn’t yet explored APMs, now is a great time to learn more. Making this transition can position you for greater financial stability in the years to come. 

More on the shift to value-based care 

The term “value-based care” (VBC) has been around for a while, but what does it mean for your day-to-day work? Simply put, it’s a move toward being rewarded for the quality of care you provide and the positive outcomes your clients achieve, rather than just the volume of services you deliver. Let’s look at some  growing VBC requirements.  

New quality measures for SNFs 

For therapists working in skilled nursing facilities (SNFs), the SNF Value-Based Purchasing (VBP) Program is expanding. This program ties a portion of Medicare payments directly to performance on specific quality metrics. For 2026, new measures are being added, including staff turnover rates and client hospital readmissions. Your role is vital in helping clients stay healthy and avoid returning to the hospital, making your contribution to these facility-wide metrics more important than ever. 

Making client outcomes more measurable 

One of the most impactful changes in the move to value-based care is the growing requirement for Patient-Reported Outcome Measures (PROMs). What are PROMs? They’re standardized surveys that clients fill out to report on their own health, including their pain levels, functional abilities, and overall quality of life. They provide concrete evidence of the progress your clients are making. 

While PROMs are not yet required across all rehab therapy settings or by most payers, the CMS has begun enforcing their use for specific procedures. For example, hospitals must now report PROMs for Medicare Fee-for-Service patients undergoing elective inpatient total hip and knee arthroplasty (THA/TKA). Failure to report for at least 50% of eligible patients can result in financial penalties. 

If you don’t have a system in place for collecting and analyzing PROMs, now is the time to explore your options. These tools not only ensure compliance but also provide powerful insights that can help you create more effective, client-centered treatment plans. 

Fighting workforce challenges  

Staffing remains a huge concern in rehab therapy. There are more people needing therapy than there are therapists to help them, and that gap is getting larger. According to the APTA’s 2025 workforce forecast, demand is expected to keep rising into 2026 and beyond, making recruitment and retention even tougher. High levels of burnout only make this more difficult. 

What keeps good staff on your team? It’s not just higher pay. Industry experts say building a workplace where people feel like they matter is key. In addition to mentorship programs and continued education opportunities, consider these strategies: 

• Offer flexible work: Where possible, explore options like flexible hours or hybrid schedules. This can improve work-life balance and make your practice a more attractive place to work. 

• Conduct “stay” interviews: Instead of waiting for exit interviews, talk to your current staff about what they enjoy about their job and what could be improved. Use this feedback to make meaningful changes for 2026. 

Bonus: Your year-end compliance checklist 

With regulations constantly evolving, it’s smart to conduct a thorough review at the end of each year to ensure your practice is protected for the year to come. Taking these steps now can prevent major headaches later. 

• Conduct a HIPAA risk assessment: Protecting client data is a legal and ethical requirement. In fact, HIPAA mandates it! Under HIPAA § 164.308(a)(1)(ii)(A), your organization must conduct an accurate and thorough assessment of potential risks and vulnerabilities to all electronic protected health information (ePHI) you hold. 
  A HIPAA Security Risk Assessment is a formal process to identify where ePHI might be vulnerable. Are your laptops encrypted? Do you have secure email? This assessment helps you find and fix potential security gaps before they become a problem. 
• Strengthen your documentation: Vague notes won’t cut it anymore. CMS is emphasizing the need for documentation that clearly shows objective functional deficits and links them to measurable, time-bound goals. For example, a note should move from “client is walking better” to “client’s 6-minute walk test distance increased from 200 to 300 meters, achieving their goal of walking independently around the grocery store.” 

• Review and update your forms: With telehealth flexibilities extended through 2026, it’s a good time to make sure your paperwork is current. Review your telehealth consent forms, HIPAA Notice of Privacy Practices, and informed consent documents to ensure they align with the latest regulations. 

Looking ahead 

If this all feels like a lot, you’re not wrong. The rules keep evolving, and it’s easy to feel like you’re always one policy update behind. Still, every step you take to prepare and tune your practice counts. The goal isn’t perfection or keeping pace with every trend – it’s building a compliant system that lets you focus on what drew you to this work: helping clients heal. 

You don’t have to do it all alone. Whether through online networks, peer mentorship, or reading up on Ensora Health’s latest insights, community and collaboration can help make a big difference.