Patients and providers are frustrated and angry. A broken Medicare system has failed to deliver high-quality care and provide needed payment levels so providers and practices can keep their doors open.
Medicare payment reform is a strategic priority for APTA, including reforms to the Medicare Physician Fee Schedule to increase payment, reduce administrative burden, and provide more flexibility to both patients and providers.
The fee schedule has faced payment cuts over the past several years, affecting numerous providers, including physical therapists. While advocacy by APTA and other provider groups has resulted in securing billions of additional dollars in funding to the fee schedule to mitigate these cuts, it highlights the need for major structural reforms to Medicare.
Congress must take action to reform the current unsustainable system to ensure that Medicare payments to providers accurately reflect the cost of practice and ensure timely access to care for Medicare beneficiaries. The current crisis with the Medicare fee schedule is not limited to just the physical therapy profession, but to all providers paid under the fee schedule who have seen decreasing payments and increasing administrative burden.
As part of ongoing advocacy efforts aimed at the fee schedule, APTA successfully enacted two major Medicare reforms in 2024 to provide more flexibility and reduce administrative burden for physical therapist practices. Specifically, there was the elimination of the outdated direct supervision requirement of PTAs in private practice under Medicare Part B, as well as the elimination of the need to obtain a signed plan of care from a physician for referred patients.
However, other major fundamental reforms are needed to continue advancing the profession. APTA, in collaboration with other major provider groups, is pushing for several reforms to Medicare to increase payment and reduce burden to help provide stability to therapy providers and the patients they serve.
This article is the first in a series highlighting the multiple initiatives APTA is pursuing to increase payment and decrease administrative burden for physical therapists.
Enact a Permanent Annual Payment Update Based on Inflation
The first step is for Congress to ensure that Medicare fee schedule payments are increased annually with an inflationary update. The Medicare Physician Fee Schedule is the only Medicare payment system lacking an annual inflationary update. APTA strongly supports the enactment of an annual payment update under the fee schedule tied to the Medicare Economic Index. This reform would provide an annual payment update, helping to stabilize practices and enable long-term planning, investment in practices, and the delivery of high-quality, patient-centered care.
Read APTA’s position paper on H.R. 879.
Repeal the Multiple Procedure Payment Reduction Policy
In 2013, Congress implemented the Multiple Procedure Payment Reduction, or MPPR, for physical, occupational, and speech-language therapy services under Medicare Part B. This action by Congress was made solely for federal budgetary purposes. The MPPR applies excessive and unnecessary payment reductions to specific “always therapy” codes, significantly impacting the financial viability of therapy practices and limiting access to vital therapy services. As this policy is in federal statute and not regulation, APTA is seeking to repeal the MPPR via legislation as part of the broader effort to reform the fee schedule. APTA is also working with Congressional champions to pressure CMS to use its discretion to make regulatory changes to the policy until Congress acts.
Read APTA’s position paper on MPPR.
Allow Physical Therapists to Privately Contract or “Opt Out” Under Medicare Part B
Currently, physical therapists seeking payment for services provided to Medicare Part B beneficiaries must enroll as Medicare providers. Therapists may choose to be either a participating provider or a nonparticipating provider under Medicare. However, physical therapists — whether they participate in Medicare or not — are currently prohibited from privately contracting with Medicare beneficiaries.
Bipartisan legislation supported by APTA and APTA Private Practice was introduced in Congress in July to allow physical therapists and other therapy providers to “opt out” of the Medicare program. The Medicare Patient Choice Act (H.R. 4204), sponsored by Reps. Lloyd Smucker, R-Pa., and Don Davis, D-N.C., would add PTs to the list of authorized health care providers who may opt out of Medicare. This change would give patients the flexibility to privately contract with their preferred PT.
Read APTA’s position paper on H.R. 4204.
Read the APTA Private Practice FAQ on Medicare Opt Out.
Address the Budget Neutrality Trigger
Recent cuts to the Medicare Physician Fee Schedule have affected all providers due to a policy known as budget neutrality. This policy mandates that any estimated annual increases of $20 million or more to the fee schedule — resulting from upward payment adjustments or the addition of new procedures or services — must be offset by cuts elsewhere. This rigid $20 million threshold has not been updated since 1992, despite the growing number of beneficiaries and the shift of more medical procedures from inpatient to outpatient settings, which are now billed to the fee schedule. Increasing this threshold could reduce the triggering of automatic, mandatory across-the-board fee schedule cuts.
During the last session of Congress, APTA supported the introduction of the Provider Reimbursement Stability Act, H.R. 6371, which aims to reform the budget-neutrality policies of the fee schedule. This act proposes raising the threshold that triggers a budget neutrality adjustment from $20 million to $53 million, with future increases every five years based on the cumulative rise in the Medicare Economic Index. APTA is advocating for the inclusion of this provision in any future Medicare fee schedule reform package.
Reform the Quality Payment Program
The Quality Payment Program, or QPP, comprises two payment tracks: the Merit-based Incentive Payment System, or MIPS, and Advanced Alternative Payment Models, or APMs. In its current form, the QPP poses significant challenges to non-physician providers, including physical therapists. The cost of participating in these programs often outweighs any potential payment increases. APTA is pushing Congress to enact meaningful reforms to the QPP program that recognize the value of physical therapist services, expand opportunities for PTs to participate in value-driven payment models, and decrease the challenges and costs to do so.
Turn Frustration Into Advocacy
The frustration surrounding Medicare payment issues affects physical therapists, physicians, and various health care providers, highlighting the urgent need for Medicare payment reform. APTA is actively collaborating with other national provider groups, including the American Medical Association, to champion reforms that align payment with the true value of care, streamline administrative processes, and empower providers to deliver high-quality services.
Moving forward requires a united front among all providers to drive meaningful change — a priority that APTA is committed to pursuing.
Stay tuned as we share ongoing efforts and ways you can help advance these essential reforms. Be sure to sign up for the APTA Advocacy Network, a free, members-only service that sends you special legislative updates and action alerts, so you’re up-to-speed and ready to act.
Join APTA staff on Aug. 7 at 2:30 p.m. ET for APTA’s Regulatory, Legislative, and Payment Updates webinar. The event will include a full breakdown of the proposed changes in the 2026 fee schedule, other recent payment updates, and a forward-looking discussion on a path for fundamental payment reform.