You are in for a treat! We have a guest post by our friend Cody Lee, PT, DPT. He dug right into the 2026 Physician Fee Schedule Proposed Rule and wrote this brief piece that we know you will enjoy. He’s covering the new Ambulatory Specialty Model (read on!) and his concept of the “Prevention Positioning Framework.”

I’m putting a callout here for all PTs—among a number of opportunities for you to comment on the PFS, consider formally commenting to CMS that PTs should be allowed to enter into the new “Collaborative Care Arrangements” with specialists. The proposals includes just PCPs—which speaks to my soapbox about PTs and primary care, but I digress…

Regarding the 2026 Physician Fee Schedule Proposed Rule writ large as it relates to PT and OT—

I’ve only just started to dig into the Proposed Rule in detail, but flagging for this audience that in includes proposals on changes to RVUs for RTM codes, seeks comment on potentially misvalued codes (pay attention if you believe PT and OT codes are undervalued!), proposes to skip “provisional” telehealth status and base Medicare Telehealth list decisions on whether or not a service CAN be provided via audio-visual telehealth, changes to valuations of services and moving away from historical use of AMA’s methodologies like surveys (don’t miss this—CMS wants to use empirical data to support potential higher values to time-based codes to address efficiencies that haven’t been recognized in the non-time-based codes), some (essentially) site neutral policy where CMS has authority, a proposal to allow all direct supervision to be done remotely…and so much more.

The Window is Open: Why Physical Therapists Must Act Now on CMS's Strategic Shift

By Cody Lee, PT, DPT

The Story: CMS Just Acknowledged What PTs Have Known All Along

In the CMS Innovation Center's proposed Ambulatory Specialty Model, a mandatory, CMMI fee-for-service payment model launching January 1, 2027 and announced yesterday in the 2026 Physician Fee Schedule Proposed Rule, there's a telling admission buried in the technical language. When describing treatment for low back pain, the document states: "chiropractors and physical therapists work closely with both primary care and specialists to treat low back pain, often providing first-line therapy."

First-line therapy.

Yet in the same document, CMS reveals that low back pain accounts for 2.7% of total Medicare Part A and B spending while heart failure accounts for 3.5%. These are among the highest-cost conditions in Medicare, significantly higher than other chronic conditions with established cost measures (most account for less than 1% of spending).

The disconnect is revealing. CMS acknowledges that PTs provide first-line therapy for one of Medicare's most expensive conditions, but the current system still routes patients through expensive specialists first.

Now CMS is proposing to fix this, and most physical therapists haven't even noticed.

The Lesson: CMS Just Rewrote the Healthcare Playbook

The CMS Innovation Center's 2025 strategy isn't just policy. It's a complete reimagining of how healthcare gets delivered and paid for. Three phrases buried in their documents reveal everything you need to know:

"Evidence-based prevention" - CMS is shifting from reactive treatment to proactive intervention. This isn't about wellness programs. It's about intercepting conditions before they become expensive crises.

"Upstream chronic condition management" - The most critical phrase for PTs. CMS explicitly wants interventions BEFORE costly hospitalizations and surgeries. For low back pain, this means PT before spine surgery. For heart failure, movement therapy before cardiac events.

"Right provider at the right time" - Translation: CMS wants the most cost-effective provider who can achieve the desired outcome. This doesn't automatically mean PTs become the quarterbacks, but it creates pressure for better care coordination and value demonstration.

Here's what most people are missing: CMS isn't making PTs the "quarterback" of care they're holding the expensive specialists accountable for outcomes while acknowledging PTs provide first-line therapy. The Ambulatory Specialty Model will hold neurosurgeons, pain management docs, orthopedic surgeons, and PM&R physicians financially responsible for low back pain outcomes.

But here's the strategic opportunity: these specialists will need to demonstrate value and coordinate care. Who do you think they'll partner with to achieve better outcomes at lower costs?

The Tool: The Prevention Positioning Framework

To capitalize on this shift, you need to reframe your entire practice around three strategic positions:

Position 1: The Prevention Expert

Instead of waiting for referrals after problems develop, position yourself as the provider who prevents costly complications.

Action Steps:

• Develop screening protocols for high-risk populations (workers with physical jobs, aging adults, chronic disease patients)

• Create prevention programs with measurable outcomes

• Partner with primary care providers for early intervention

• Build evidence dossiers showing your prevention results

Position 2: The Essential Partner

CMS isn't making PTs the primary accountable provider, but they're creating financial pressure on specialists to demonstrate value and coordinate care. These specialists will need cost-effective partners to succeed.

Action Steps:

• Build partnerships with ASM-eligible specialists (neurosurgeons, pain management, orthopedic surgeons, PM&R)

• Develop collaborative care arrangements that help specialists meet their quality and cost targets

• Create referral protocols that position PT as the conservative treatment option

• Establish shared care pathways that keep patients out of expensive interventions

Position 3: The Value Demonstrator

The new payment models require providers to assume financial risk for outcomes. You need to prove you can deliver better results for less money.

Action Steps:

• Track cost-per-episode data compared to traditional care paths

• Measure functional outcomes and quality of life improvements

• Document reduced utilization of expensive services

• Build financial models that show your return on investment

The Reflection: What's Your Next Move?

The CMS strategy creates an unprecedented opportunity for physical therapy to move from the margins to the center of healthcare delivery. But this window won't stay open indefinitely.

Consider these questions:

1. Are you positioning yourself as a treatment provider or a prevention expert? The money is moving toward prevention. Late adopters will be left treating the patients that prevention programs couldn't help.

2. How integrated are you with primary care? CMS's new models reward providers who coordinate care and ensure patients have a "regular source of primary care." Isolated practices will struggle.

3. Can you demonstrate superior value? You need more than anecdotal success stories. You need data showing better outcomes for less money.

4. Are you prepared to assume financial risk? The new payment models require downside risk. Providers who can't prove their value won't survive.

The physical therapy profession has spent decades fighting for recognition and direct access.

CMS just handed us both, if we're smart enough to grab them.

Most of your competitors are still operating like it's 2019. They're waiting for referrals, treating symptoms, and hoping insurance will pay. Meanwhile, the entire healthcare system is shifting toward the very things PT does best: prevention, function, and cost-effective outcomes.

The question isn't whether this shift toward prevention and value-based care is coming. It's already here. The question is whether you'll be positioned as the cost-effective partner these specialists need to succeed.

What's your first move?

P.S. - If you're serious about positioning your practice for this shift, start with one, simple collaborative care arrangement with a primary care provider. Choose someone who shares your values around prevention and patient empowerment. The rest will follow.

Here’s a popular “Short” featuring Cody on our Future Proof PT YouTube channel, which you can check out and subscribe to here! 🙏