The 2026 Medicare Physician Fee Schedule is out.

At first glance, the changes look modest. And in many regions, they are.

But as with most Medicare updates, the real story isn’t in the average percentage increase or decrease. It’s in the details most clinics don’t slow down to examine. Geography, code mix, and utilization patterns matter more than ever, and small shifts compound quickly at scale.

Here’s what actually changed in 2026 and why it’s worth paying attention.

The Conversion Factor Increased

For the first time since 2020, the Medicare Conversion Factor increased. While the bump is not dramatic, it breaks a multi-year downward trend that many clinics had already assumed would continue indefinitely.

This change alone doesn’t materially alter margins, but it does reset assumptions that have quietly shaped budgeting and forecasting over the last several years.

Geography Is Doing More of the Work

The 2026 updates highlight how uneven Medicare reimbursement has become across regions.

Some areas saw meaningful upside. East St. Louis and much of Illinois experienced reimbursement increases of more than 5 percent in certain scenarios.

Other regions moved in the opposite direction. North Dakota saw the largest decline, with rates down roughly 5 percent.

Same Medicare program. Very different financial outcomes depending on location.

This is one of the reasons national “average” changes are increasingly misleading for individual clinics.

Certain Codes Are No Longer an Option

E-Visits (G2061, G2062, G2063) are no longer reimbursable in 2026.

If these codes are still embedded in your workflows, this is not a “monitor and adjust later” situation. It’s a hard stop. Clinics relying on these codes will need to remove them entirely and reassess how non-face-to-face care is being delivered and documented.

Continued Pressure on Front-End Care

Evaluation reimbursements declined by approximately 3 percent.

This continues a long-running trend: front-end care is being squeezed, while downstream utilization carries more of the financial weight. For clinics that rely heavily on evaluations to set the tone for profitability, this shift reinforces the need to understand true cost per visit and visit distribution across the plan of care.

The KX Threshold Moved More Than Usual

The PT Medicare KX cap increased from $2,410 to $2,480, representing nearly a 3 percent increase.

That’s larger than the typical annual adjustment and is particularly relevant for clinics treating higher-acuity Medicare populations. While it doesn’t change utilization rules, it does slightly extend the runway before additional documentation thresholds apply.

On Average, Reimbursement Is Still Up

Across most regions, total Medicare reimbursement trends up approximately 2 to 3 percent year over year.

However, “on average” hides significant variability. Code mix, geography, and utilization patterns ultimately determine whether a clinic experiences meaningful upside, flat results, or margin pressure.

A Simple Example

Consider a visit billed in Rest of Florida with the following codes:

Manual Therapy x1
Neuromuscular Re-Ed x1
Therapeutic Activities x2

That visit reimbursed $100.47 in 2025.
In 2026, it will reimburse $102.60.

On a single visit, the difference feels incremental. Across thousands of visits, it compounds quickly.

The Real Takeaway

The 2026 Medicare Fee Schedule isn’t categorically good or bad.

What it does reinforce is this: relying on headline percentages instead of your actual code mix, utilization, and geography is risky. Small shifts add up over time, and clinics that model them early tend to have more strategic options later.

We’ve updated the 2026 Medicare Fee Calculator to help clinics run their own numbers and understand what these changes actually mean in practice.

The averages are easy to read.
The details are where decisions get made.

Want to see what this means for your clinic?

The 2026 Medicare Fee Calculator is live.

Use it to model your actual code mix and geography, not national averages. It’s the fastest way to understand how these changes show up in your reimbursement and where small shifts may compound over time.

👉 Check out the 2026 Medicare Fee Calculator