Updated physical therapy reimbursement rates by state affect revenue. Compare rates and optimize billing.
You know Medicare pays different amounts based on clinic location. But the actual dollar figures can be hard to find. Physical therapy reimbursement rates by state just aren't published in an accessible format.
This guide pulls together the 2026 baseline: locality-adjusted rate comparisons for top PT codes, a per-visit calculation with the therapy payment reduction, and step-by-step instructions for pulling your exact allowed amount.
The 2026 Physician Fee Schedule sets the non-facility allowed amounts that anchor physical therapy reimbursement rates by state. But the payment your clinic receives depends on your locality's GPCI, not your state line. Across the country, CMS maintains 109 distinct payment localities.
A Medicare reimbursement rate is the allowed amount CMS pays for a specific CPT code at a specific location. Medicare applies three locality-specific GPCI adjustments (for work, practice expense, and malpractice) to the code's relative value units.
Two clinics in the same state can see very different allowed amounts for the same code. Even small reimbursement differences can add up across a high patient volume, directly affecting revenue, staffing decisions, and investment in patient care.
Medicare Part B’s Physician Fee Schedule is the only public, geography-adjusted payment dataset, so it serves as the common benchmark for commercial payers and practices. Tracking your locality-adjusted rates and comparing them across payers helps you identify underperforming contracts and forecast revenue more accurately.
For 2026, CMS set the non-qualifying Alternative Payment Model (APM) conversion factor at $33.40, a 3.26% bump from the 2025 rate. That increase doesn't translate into a uniform raise across every code, though.
RVU updates, GPCI recalculations, and the therapy Multiple Procedure Payment Reduction (MPPR) shift what individual codes actually pay. For instance, MPPR cuts the practice expense component by 50% for same-day therapy services after the initial one.
CMS also finalized a −2.5% efficiency adjustment to work RVUs for non-time-based services. Timed therapy codes like 97110, 97140, and 97530 are exempt from that cut.
The 2026 KX modifier therapy threshold stands at $2,480 for PT and SLP combined, with a separate $2,480 cap for OT. Any claim that pushes a patient past that line without the KX modifier will be denied outright. The targeted medical review threshold holds at $3,000 through 2028.
Because locality-adjusted rates vary, patients in higher-GPCI areas reach the threshold faster. Tracking cumulative allowed amounts per patient is essential to avoiding preventable denials.
Let’s compare the 2026 Medicare non-facility allowed amounts for the most commonly billed outpatient PT codes.
The table below lists national non-facility allowed amounts from CMS's National Payment Amount File. These are unadjusted figures before GPCI is applied, for outpatient private practices.
For context, code 97110 paid about $32.35 nationally in 2025. The 2026 figure reflects the conversion factor increase, plus RVU adjustments.
Two common visit scenarios show what Medicare pays at the national baseline level.
Locality-specific GPCIs reshape those same codes across the country. Each rate below was verified through the CMS PFS search tool, then grouped into high-, mid-, and low-GPCI tiers.
For 97110 alone, the spread from rural Mississippi to Alaska is roughly $10 per unit. On a typical three-unit visit, that gap becomes $25–$30. Multiply across 20 patients a day, and the weekly revenue difference between a high-GPCI and low-GPCI clinic runs into hundreds of dollars.
When a physical therapist assistant (PTA) provides more than 10% of a service, the claim must include the CQ modifier. Medicare then pays only 85% of the normal amount. That 15% reduction looks modest on a single unit but compounds fast across a full caseload.
If roughly 40% of your visits are PTA-delivered, that 15% cut spreads across a large share of weekly volume. Your billing workflow needs to track this so revenue shortfalls don't surface as surprises at month-end.
Confirm the precise Medicare allowed amount for any PT code in your locality using CMS's free Physician Fee Schedule search tool. You'll need your MAC locality. If you're not sure, search by state and county on CMS's locality configuration page.
With your locality rate confirmed, you have a verified baseline to check every Medicare payment that posts to your account. That baseline is also the starting point for measuring every other payer in your mix.
Once you know what you should be getting paid, the next challenge is confirming you actually received it. Empower EMR connects documentation, billing, and reporting in one platform so your team can easily compare expected versus actual allowed amounts without toggling between systems.
Your Medicare locality rate is a confirmed number, not an estimate. Use it as the measuring stick for every other payer contract.
Nationally, commercial "professional" reimbursement for physical therapy averaged roughly 148% of Medicare in 2025, according to Milliman. State-level variation runs about 123%–255% of Medicare, depending on the payer, market, and code.
Benchmark your own contracts by dividing the commercial allowed amount by your Medicare locality allowed amount for each high-volume code. That gives you a percentage of Medicare. Track that ratio per payer, per code, every quarter.
When reviewing or renegotiating a commercial contract, request these items upfront:
Medicaid sits on the opposite end of the spectrum. A 2024 study in Health Affairs found that Medicaid physician fees averaged about 71% of Medicare nationally. Individual states set their own therapy fee schedules. For approximate differences between states, refer to the table below.
The complete revenue workflow ties together Medicare baselines, commercial percentages, and Medicaid rates.
That last step matters more than most practices realize. CMS reported $28.83 billion in Medicare Fee-for-Service (FFS) improper payments in 2025.
Empower EMR's integrated billing and reporting tools let practices run this entire workflow in one place. Track expected versus actual allowed amounts, flag underpayments, and monitor KX thresholds without switching systems.
Once you know your Medicare baseline and payer comparisons, focus on improving what you collect.
You now have the tools to pull your exact, locality-adjusted Medicare rate for any PT code. Measure every commercial and Medicaid contract against that number. Catch underpayments before they quietly erode your bottom line across weeks of patient volume.
Empower EMR turns that knowledge into a daily workflow. Documentation feeds directly into claims, so codes and modifiers are attached before anyone has to think about them. Expected allowed amounts are compared against actual payments as remittances are posted. Compliance alerts surface KX threshold crossings and modifier needs before claims ever leave your system.
If you want your billing workflow to keep pace with what you now know about your rates, schedule a personalized demo.
Estimate your average units per visit and apply the 50% practice expense reduction to subsequent therapy services. Then multiply by visit volume to project the monthly MPPR impact.
For example, if your typical visit is three timed units, MPPR reduces PE on units two and three. Calculate the dollar difference per visit and scale by monthly visit count.
Yes, commercial payers typically pay 110%–150% of Medicare. A rate below Medicare suggests either an outdated contract or an unfavorable negotiation. Pull your locality-adjusted Medicare allowed amount for the code in question and compute the commercial rate as a percentage. Use that data point to request a contract review or renegotiation.
