The 2026 Medicare Physician Fee Schedule (MPFS) final rule has introduced some of the most significant changes to physical therapy and occupational therapy billing in years. At the center of these changes is the expansion of Remote Therapeutic Monitoring (RTM), with two brand-new CPT codes that dramatically lower the billing thresholds for therapy practices. Combined with a long-overdue conversion factor increase and new reimbursement rate adjustments, these updates create both opportunities and compliance risks that every PT and OT practice owner needs to understand.

Whether you run a single-location physical therapy clinic or a multi-site occupational therapy practice, the decisions you make about RTM implementation and billing workflows in the next few months will directly impact your revenue for the rest of 2026 and beyond. This guide breaks down every change that matters, including the new CPT codes, updated reimbursement rates, modifier requirements, verified ICD-10 diagnosis codes for RTM claims, CMS coverage policy references, and practical steps to capture revenue you may currently be leaving on the table.

What Changed in the CY 2026 Medicare Physician Fee Schedule for Therapy Services

CMS finalized the Calendar Year 2026 MPFS in November 2025, and the changes took effect on January 1, 2026. For physical therapists, occupational therapists, and speech-language pathologists, three headline changes stand out.

Conversion Factor Increase

For the first time in five years, CMS increased the MPFS conversion factor. The non-qualifying APM conversion factor rose from $32.3465 to $33.4009, a 3.26% increase. For qualifying APM participants, the conversion factor is $33.5675, representing a 3.77% increase. While this is welcome news, the effective impact on most therapy practices is closer to a 1.75% net increase after factoring in other payment adjustments, including the permanent -2.5% work RVU efficiency adjustment that CMS applied to all non-time-based services.

Work RVU Efficiency Adjustment

CMS finalized a permanent -2.5% efficiency adjustment to the work Relative Value Units (wRVUs) for all non-time-based services. This directly reduces payment for foundational therapy services like initial evaluations (CPT 97161-97163) and re-evaluations (CPT 97164). For a physical therapy practice that bills heavily on evaluation codes, this adjustment can offset much of the conversion factor gains, resulting in a net revenue decline on those specific services.

Therapy Threshold (KX Modifier) Update

The 2026 therapy cap threshold has been adjusted slightly upward to $2,480 for combined physical therapy and speech-language pathology services, and $2,480 for occupational therapy services. Once a patient exceeds this amount, the KX modifier must be appended to indicate medical necessity. The targeted medical review threshold remains at $3,000 for both categories. Practices must ensure documentation supports medical necessity for every visit beyond these thresholds, as audit frequency is projected to increase from 8% to 12-15% annually in 2026.

The New RTM Codes for 2026: CPT 98985 and CPT 98979

 

The most significant revenue opportunity for therapy practices in 2026 comes from two new Remote Therapeutic Monitoring CPT codes. These codes address a longstanding barrier: previously, RTM billing required a minimum of 16 days of device data transmission and at least 20 minutes of provider management time within a 30-day period. Many short-term therapy patients or those with lower-intensity monitoring needs fell outside these requirements, leaving billable revenue uncaptured.

 

CPT 98985: Device Supply for 2-15 Days

CPT 98985 covers the supply of a remote therapeutic monitoring device for musculoskeletal system data access or data transmission, for patients who transmit data for 2 to 15 days within a 30-day period. The national average reimbursement rate is approximately $51.00. This code is mutually exclusive with CPT 98977 (which covers 16-30 days of musculoskeletal monitoring at approximately $40.00). In practical terms, a patient who uses an RTM device for only 10 days of a month can now be billed under 98985, whereas previously there was no billing option for that scenario.

CPT 98979: Treatment Management for 10-19 Minutes

CPT 98979 covers the first 10 to 19 minutes of RTM treatment management services in a calendar month. The national average reimbursement is approximately $26.00. This code is mutually exclusive with CPT 98980 (which covers the initial 20 or more minutes at approximately $54.00). Importantly, CPT 98979 requires at least one real-time interactive communication with the patient or caregiver during the month. This means a quick phone call or video check-in, combined with data review, can now generate reimbursement that previously would have been missed entirely.

 

 

Complete 2026 RTM Code Reference Table

 

CPT Code	Description	2026 Rate (Approx.)	Key Requirement
98975	RTM initial setup and patient education	$22.00	One-time per episode
98977	MSK device supply, 16-30 days/month	$40.00	Mutually exclusive with 98985
98985 (NEW)	MSK device supply, 2-15 days/month	$51.00	Mutually exclusive with 98977
98976	Respiratory device supply, 16-30 days	$52.00	For respiratory conditions only
98980	Treatment management, 20+ min/month	$54.00	Mutually exclusive with 98979
98981	Treatment management, each addl 20 min	$41.00	Add-on to 98980 only
98979 (NEW)	Treatment management, 10-19 min/month	$26.00	Mutually exclusive with 98980

 

Verified ICD-10 Codes for Physical Therapy RTM Claims

 

Every RTM claim must be linked to a documented therapy plan of care that includes specific ICD-10-CM diagnosis codes justifying the need for remote monitoring. Using the correct diagnosis codes is critical for claim acceptance and audit defense. Below are the most commonly applicable ICD-10-CM codes for musculoskeletal conditions monitored via RTM in physical and occupational therapy settings, verified against the current CMS ICD-10-CM code database.

 

Low Back Pain (M54 Category)

Low back pain is one of the most common conditions managed in PT clinics and is highly suitable for RTM monitoring of exercise adherence and pain levels. Important coding note: M54.5 (Low back pain, unspecified) is NOT valid for HIPAA transactions and will result in claim denial. Always code to the highest specificity available.

 

ICD-10 Code	Description	HIPAA Valid
M54.50	Low back pain, unspecified	Yes
M54.51	Vertebrogenic low back pain	Yes
M54.59	Other low back pain	Yes
M51.360	Intervertebral disc degen, lumbar region with discogenic back pain only	Yes
M51.362	Intervertebral disc degen, lumbar region with discogenic back & lower extremity pain	Yes

 

 

Knee Osteoarthritis (M17 Category)

Post-surgical and conservative management of knee osteoarthritis is a prime RTM use case, particularly for monitoring range of motion recovery and exercise compliance after total knee arthroplasty.

 

ICD-10 Code	Description	HIPAA Valid
M17.0	Bilateral primary osteoarthritis of knee	Yes
M17.11	Unilateral primary osteoarthritis, right knee	Yes
M17.12	Unilateral primary osteoarthritis, left knee	Yes
M17.31	Unilateral post-traumatic osteoarthritis, right knee	Yes
M17.32	Unilateral post-traumatic osteoarthritis, left knee	Yes

 

 

Shoulder Pain, Gait Abnormalities & Post-Surgical Rehab

Additional high-volume ICD-10 codes commonly paired with RTM services in therapy settings include:

 

ICD-10 Code	Description	RTM Use Case
M25.511	Pain in right shoulder	ROM & exercise monitoring
M25.512	Pain in left shoulder	ROM & exercise monitoring
R26.89	Other abnormalities of gait and mobility	Gait retraining progress
R26.0	Ataxic gait	Balance & fall risk monitoring
Z47.1	Aftercare following joint replacement surgery	Post-TKA/THA recovery tracking
M62.81	Muscle weakness (generalized)	Strengthening program adherence

 

 

Pro Tip: Always code to the highest level of specificity. Using unspecified codes like M54.5 (not HIPAA-valid) or M17.9 (Osteoarthritis of knee, unspecified) increases denial risk and weakens audit defense. Laterality and site-specific codes demonstrate medical necessity more effectively.

 

CMS Coverage Policies Affecting PT/OT RTM Services

Understanding Medicare coverage policies is essential for RTM billing compliance. While there is currently no National Coverage Determination (NCD) specifically addressing Remote Therapeutic Monitoring, RTM services are covered under the Medicare Physician Fee Schedule as separately billable services when medical necessity criteria are met.

 

Local Coverage Determinations (LCDs) to Monitor

 

Several active Local Coverage Determinations directly impact physical therapy billing and should be reviewed for RTM compliance alignment:

 

LCD ID	Title	MAC Contractor	Effective Date
L34428	Outpatient Physical Therapy	Palmetto GBA (MAC - Part A)	05/18/2023
L33942	Physical Therapy - Home Health	CGS Administrators (HHH MAC)	08/07/2025
L34564	Home Health Physical Therapy	Palmetto GBA (HHH MAC)	05/23/2024

 

 

These LCDs define the medical necessity criteria, documentation requirements, and covered diagnoses for physical therapy services within their respective MAC jurisdictions. While they do not specifically address RTM codes, the medical necessity standards and documentation requirements they establish apply to the underlying therapy plan of care that must support RTM billing. Practices should verify their specific MAC jurisdiction requirements, as coverage criteria can vary by contractor.

Coverage Compliance Checklist for RTM

To ensure RTM claims meet Medicare coverage requirements, therapy practices should verify the following before submitting claims: the patient has an active, documented therapy plan of care signed by a qualified practitioner; the ICD-10 diagnosis code on the RTM claim matches the documented condition in the plan of care; the RTM service is medically reasonable and necessary for the specific patient; time and transmission day thresholds are met and documented; and the appropriate therapy modifier (GP, GO, or GN) is appended to every RTM claim line.

Modifier and Supervision Requirements for RTM in 2026

Starting January 1, 2026, all RTM codes, including the new 98985 and 98979, are designated as "sometimes therapy" services. This designation carries specific billing requirements that every therapy practice must follow.

GP Modifier: When RTM services are furnished by a physical therapist, the GP modifier must be appended to the claim.

GO Modifier: When furnished by an occupational therapist, the GO modifier must be appended.

GN Modifier: When furnished by a speech-language pathologist, the GN modifier is required.

RTM services must be provided under a therapy plan of care when billed by therapists. Additionally, the de minimis standard applies to CPT codes 98975, 98979, 98980, and 98981 when provided in whole or in part by a Physical Therapist Assistant (PTA) or Occupational Therapy Assistant (OTA). However, the de minimis standard does not apply to the device supply codes 98985 and 98977.

Codes Removed from the Efficiency Adjustment List

In a positive development for therapy practices, CMS removed several commonly billed physical therapy CPT codes from the efficiency adjustment list for 2026. This means these services will not be subject to the -2.5% work RVU reduction. The removed codes include: 97032 (manual electrical stimulation), 97033 (iontophoresis), 97034 (contrast bath therapy), 97035 (therapeutic ultrasound), 97036 (Hubbard tank hydrotherapy), 97113 (aquatic therapy), 97124 (massage therapy), 97140 (manual therapy), and 97533 (sensory integration).

The removal of 97140 from the efficiency adjustment list is particularly significant, as manual therapy is one of the most frequently billed PT codes. Practices that rely heavily on manual therapy and modality-based treatments will see relatively better reimbursement preservation compared to those that bill primarily on evaluation codes.

Revenue Impact: How RTM Can Add $160+ Per Patient Per Month

The expanded RTM framework creates a meaningful revenue opportunity. For a qualifying patient who uses an RTM device for the full month and receives adequate management time, a therapy practice can potentially bill the following combination in a single 30-day period:

 

Code	Service	Rate
98975	Initial setup (first month only)	$22.00
98977	Device supply, 16-30 days	$40.00
98980	Treatment management, 20+ min	$54.00
98981	Additional 20 min management	$41.00
	Total per patient/month (ongoing)	$135.00
	Total first month (with setup)	$157.00

 

For practices with 50 patients on RTM at any given time, this translates to approximately $6,750 in additional monthly revenue, or over $80,000 annually, without adding a single in-clinic visit. The new lower-threshold codes (98985 and 98979) further expand this by capturing patients who only need partial-month monitoring, potentially increasing the number of billable RTM patients by 20-40%.

 

Implementation Best Practices for Therapy Practices

Successfully capturing RTM revenue requires more than just knowing the codes. Practices need workflows, technology, and documentation protocols in place.

Select a Compliant RTM Platform

The RTM device must be FDA-cleared or meet CMS standards for remote monitoring. Many therapy-specific platforms now offer integrated solutions that track patient exercise adherence, range of motion, and pain levels through smartphone-based apps or wearable sensors. Ensure your chosen platform automatically logs transmission days, as this is critical for determining whether to bill 98985 (2-15 days) or 98977 (16-30 days).

Document the Plan of Care with Specific ICD-10 Codes

Since all RTM codes are now "sometimes therapy" services, they must be delivered under a documented therapy plan of care. The plan should specify the condition being monitored using specific, HIPAA-valid ICD-10-CM codes (such as M54.51 for vertebrogenic low back pain, M17.11 for right knee osteoarthritis, or Z47.1 for post-joint replacement aftercare), the anticipated duration of monitoring, the type of RTM device used, and the expected frequency of provider-patient communication. Avoid unspecified codes wherever possible to reduce denial risk.

Track Time Accurately

The distinction between 98979 (10-19 minutes) and 98980 (20+ minutes) makes time tracking essential. Use a time-logging system that captures data review, care plan adjustments, and patient communications separately. This documentation will be critical in the event of an audit, which CMS has indicated will increase in frequency for therapy services in 2026.

Train Staff on Modifier Usage

Every RTM claim from a therapist must include the appropriate therapy modifier (GP, GO, or GN). Additionally, if a PTA or OTA is involved in delivering the service, the CQ or CO modifier and de minimis rules must be applied correctly. Incorrect modifier usage is one of the most common reasons for RTM claim denials.

Common RTM Billing Mistakes to Avoid

The most frequent RTM billing errors include: billing 98985 and 98977 in the same 30-day period for the same patient (they are mutually exclusive); billing 98979 and 98980 in the same month (also mutually exclusive); failing to append GP, GO, or GN when a therapist provides the service; billing RTM without a documented, active therapy plan of care on file; insufficient patient contact (CPT 98979 requires at least one real-time interaction during the billing month); using unspecified ICD-10 codes like M54.5 instead of specific codes like M54.50 or M54.51; billing the initial setup code 98975 beyond the first monitoring episode; and failing to verify MAC-specific LCD requirements for the underlying therapy diagnosis.

How RTM Improves Patient Outcomes Beyond Revenue

While the financial case for RTM is compelling, the clinical benefits are equally significant. Studies have shown that patients using remote therapeutic monitoring platforms demonstrate over 30% improvement in pain and function outcomes compared to patients receiving standard care alone. Specific benefits include improved adherence to home exercise programs, faster recovery timelines, reduced re-injury rates, and higher patient satisfaction scores.

For practice owners, these improved outcomes translate into better patient retention, stronger referral relationships with physicians, and improved performance on quality reporting measures like MIPS. RTM is not just a billing play; it represents a genuine evolution in how therapy practices deliver and monitor care.

 

Frequently Asked Questions (FAQ) — RTM Codes & Physical Therapy Billing 2026

Q1: What are the new RTM CPT codes for physical therapy in 2026?

CMS introduced two new RTM codes effective January 1, 2026: CPT 98985 (device supply for 2-15 days of musculoskeletal monitoring at ~$51.00) and CPT 98979 (treatment management for 10-19 minutes at ~$26.00). These codes lower the billing thresholds that previously required 16+ days of data transmission and 20+ minutes of management time, making RTM accessible to more short-term therapy patients.

Q2: What is the 2026 Medicare conversion factor for physical therapy services?

The CY 2026 MPFS conversion factor is $33.4009 for non-qualifying APM participants (a 3.26% increase from $32.3465) and $33.5675 for qualifying APM participants (a 3.77% increase). However, the effective net increase for most therapy practices is approximately 1.75% after accounting for the permanent -2.5% work RVU efficiency adjustment applied to non-time-based services.

Q3: Which ICD-10 codes should I use for RTM claims in physical therapy?

Common ICD-10-CM codes for PT RTM claims include: M54.50/M54.51/M54.59 for low back pain, M17.11/M17.12 for knee osteoarthritis (with laterality), M25.511/M25.512 for shoulder pain, Z47.1 for post-joint replacement aftercare, R26.89 for gait abnormalities, and M62.81 for muscle weakness. Avoid unspecified codes like M54.5 (not HIPAA-valid) and always code to the highest specificity to reduce denial risk.

Q4: What modifiers are required for RTM billing by therapists?

All RTM codes are classified as "sometimes therapy" services in 2026 and require therapy modifiers: GP (physical therapist), GO (occupational therapist), or GN (speech-language pathologist). Additionally, the de minimis standard applies to CPT 98975, 98979, 98980, and 98981 when a PTA or OTA is involved, requiring the CQ or CO modifier. The device supply codes 98985 and 98977 are exempt from the de minimis standard.

Q5: Can I bill CPT 98985 and 98977 in the same month?

No. CPT 98985 (2-15 days) and CPT 98977 (16-30 days) are mutually exclusive and cannot be billed for the same patient in the same 30-day period. Similarly, CPT 98979 (10-19 minutes) and CPT 98980 (20+ minutes) are mutually exclusive management codes. Billing both in a single period will result in claim denial.

Q6: How much revenue can RTM generate per patient per month?

A fully qualifying RTM patient can generate approximately $135 per month in ongoing revenue (98977 at $40 + 98980 at $54 + 98981 at $41), or $157 in the first month with the initial setup code 98975 ($22). For a practice with 50 active RTM patients, this translates to over $80,000 in additional annual revenue without adding in-clinic visits.

Q7: What is the 2026 therapy cap threshold for physical therapy?

The 2026 therapy cap threshold is $2,480 for combined physical therapy and speech-language pathology services, and $2,480 for occupational therapy services. Once a patient exceeds this amount, the KX modifier must be appended to indicate medical necessity. The targeted medical review threshold remains at $3,000 for both categories.

Q8: Is there a Medicare National Coverage Determination (NCD) for RTM?

No. As of 2026, there is no NCD specifically addressing Remote Therapeutic Monitoring. RTM services are covered under the Medicare Physician Fee Schedule as separately billable services when medical necessity criteria are met. However, practices should review applicable Local Coverage Determinations (LCDs) for physical therapy in their MAC jurisdiction, such as L34428 (Outpatient Physical Therapy, Palmetto GBA) and L33942 (Physical Therapy - Home Health, CGS Administrators).

Q9: Were any physical therapy codes removed from the 2026 efficiency adjustment?

Yes. CMS removed several commonly billed PT codes from the -2.5% efficiency adjustment list, including: 97140 (manual therapy), 97113 (aquatic therapy), 97124 (massage therapy), 97032-97036 (electrical stimulation, iontophoresis, contrast bath, ultrasound, hydrotherapy), and 97533 (sensory integration). The removal of 97140 is especially significant as it is one of the most frequently billed PT codes.

Q10: Does CPT 98979 require patient interaction?

Yes. CPT 98979 (10-19 minutes of RTM treatment management) requires at least one real-time interactive communication with the patient or caregiver during the billing month. This can be a phone call, video check-in, or in-person discussion where you review monitoring data, adjust the care plan, or address patient concerns. Billing 98979 without documented patient interaction will not withstand an audit.