TL;DR: Value-based care in physical therapy is no longer a distant concept — it's showing up in your reimbursement checks, quality scores, and payer contracts right now. Here's what the policy trends, payer shifts, and CMS roadmap actually mean for your practice in 2025 and beyond.

Let's settle something upfront: if you're running a physical therapy practice and waiting for value-based care (VBC) to "arrive," you've missed the first wave. It's already here. What's still unfolding is how deep it goes — and how fast the future of value-based care in physical therapy will reshape everything from how you document a session to how much Medicare pays you next year.

The question isn't whether VBC is coming to PT. The question is: Is your practice ready when it fully arrives?

This blog unpacks the policy trends, payer shifts, market direction, and key CMS programs — MIPS and MVPs — that together paint a clear picture of where the profession is heading.

Spoiler: it's a direction that rewards outcomes, penalizes inaction, and makes your EHR and documentation practices more financially critical than ever.

The Policy Signal Is Clear: Is Value-Based Care Mandatory for PT?

Not yet — not formally. But the architecture is being built, and the direction is unmistakable.

The Centers for Medicare & Medicaid Services (CMS) has set an explicit goal: by 2030, 100% of Traditional Medicare beneficiaries will be in accountable care relationships — meaning every patient's care is tied to quality and cost accountability. For physical therapists, this means the fee-for-service (FFS) safety net is narrowing with each passing rule cycle.

Here's what makes the policy signal hard to ignore: CMS has been systematically building the infrastructure for value-based payment in PT for over a decade — through MACRA (2015), the QPP, MIPS, and most recently, the introduction of MIPS Value Pathways (MVPs). The 2024 launch of the Rehabilitative Support for Musculoskeletal Care MVP was the clearest signal yet that CMS is ready to integrate rehabilitation therapy into its value-based ecosystem, not just as an afterthought, but as a named specialty.

And starting in 2026, the financial stakes are explicitly different for APM participants versus non-participants. APM qualifying providers receive a conversion factor of $33.85 — compared to $33.40 for non-qualifying providers. That gap will persist and widen over time.

Policy Trends Reshaping the Future of Value-Based Care in Physical Therapy

Five converging trends are accelerating VBC adoption in PT:

• Persistent Medicare reimbursement pressure. The 2025 Medicare conversion factor dropped to $32.35 — the fifth consecutive year of cuts or flat rates. The 2026 proposed rule adds a nominal 3.3% increase but CMS estimates a net -1% impact on PT services due to relative value unit (RVU) adjustments. Fee-for-service alone is a shrinking revenue strategy.

• MIPS Value Pathways replacing traditional MIPS. CMS plans to phase out traditional MIPS reporting after the 2027 performance year. MVPs will become the primary reporting pathway. PT practices that haven't started transitioning are running out of runway.

• New mandatory episode-based APMs. The Transforming Episode Accountability Model (TEAM) — a mandatory, episode-based APM — launched January 1, 2026. While currently hospital-focused, it signals CMS's willingness to move from voluntary to mandatory models.

• CMS ACCESS Model targets musculoskeletal conditions. CMS announced the ACCESS (Advancing Chronic Care with Effective, Scalable Solutions) Model, launching July 1, 2026, with "chronic musculoskeletal pain" explicitly listed as a target condition. This creates direct VBC pathways relevant to PT.

• Audit intensity increasing. CMS projects audit frequency rising from 8% to 12–15% annually for most PT practices by 2026. High-volume practices billing over $500K in Medicare face 25% audit probability. VBC-aligned practices, with robust outcomes documentation, are inherently better protected.

The VBC Roadmap for Physical Therapy: Policy Milestones (2015–2030)

Below is the CMS-driven policy timeline and its direct implications for PT practices:

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Are Private Payers Following the Same Direction?

Medicare is leading the march, but commercial payers are marching in step — just at their own pace.

Private insurers are increasingly embedding outcomes-based requirements into PT contracts. This includes visit limits tied to functional outcomes rather than diagnosis codes, prior authorization protocols linked to measurable improvement milestones, and risk-sharing arrangements through ACO partnerships. The AMA noted that to meet the 2030 goal, CMS is actively expanding APM reach into rural and underserved communities — creating pressure on commercial payers to follow suit in those markets.

Meanwhile, private payer strategies are tightening around utilization management — review practices that reduce reimbursement for multiple services in a single session (Multiple Procedure Payment Reduction, or MPPR) — and imposing stricter visit-limit enforcement. Practices that can demonstrate outcomes-driven efficiency are positioned to negotiate stronger commercial contracts, while those relying on volume-based billing face compounding pressure from both Medicare and commercial sides.

What Alternative Payment Models (APMs) Actually Mean for PT Practices

APMs are the structural architecture of value-based care. They define how providers get paid — not per service, but per outcome, episode, or population health metric. For physical therapists, APM participation is still limited but growing.

The most relevant APM pathways for PT practices today include:

•   Medicare Shared Savings Program (MSSP) / ACO participation: Physical therapists affiliated with ACOs can participate in shared savings without directly contracting as an APM entity. MSSP is Medicare's largest APM, currently covering more than 10 million beneficiaries across 480+ ACOs.

•   ACO REACH Model (through 2026): Offers two risk-sharing options for coordinated care. Currently scheduled to conclude at end of 2026, but stakeholders are advocating for continuation or evolution into MSSP.

•   Bundled Payment Models (BPCI-A): Physical therapists participating in bundled arrangements for joint replacement or musculoskeletal episodes can earn shared savings while improving post-acute outcomes.

•   Advanced APM qualifying status: Providers who achieve Qualifying Participant (QP) status through an Advanced APM receive a higher Medicare conversion factor (+0.75% annually starting 2026) and are exempt from MIPS reporting entirely.

The challenge? For the majority of PT practices, direct Advanced APM participation remains out of reach — steep financial risk requirements and limited specialty-specific models are barriers. But this is precisely why MIPS and MVPs matter so much right now.

MIPS 2025: The Primary VBC Gateway for Physical Therapists

For the overwhelming majority of PT practices that cannot yet access Advanced APMs, MIPS (Merit-Based Incentive Payment System) is the primary value-based payment mechanism — and one with real financial consequences.

The numbers are stark: MIPS payment adjustments for the 2024 performance year (impacting 2026 payments) range from -9% to +9% of all Medicare Part B revenues. For a practice billing $300,000 annually in Medicare services, that's a potential swing of $27,000 — in either direction.

MIPS Value Pathways (MVPs): PT's Dedicated Lane to Value-Based Reporting

In 2024, CMS introduced the Rehabilitative Support for Musculoskeletal Care MVP (MVP ID: M1370) — the first MIPS Value Pathway specifically designed for physical therapists, occupational therapists, and chiropractors. Described by APTA's Private Practice Section as a "landmark" development, this MVP allows PTs to be benchmarked against clinical peers for the first time.

Compared to traditional MIPS, the MSK MVP reduces required quality measures from six to four (at least one must be outcomes-based), and simplifies improvement activity requirements to one high-weighted or two medium-weighted activities. As of the 2025 performance year, CMS offers 21 total MVPs — and MVP participation will become mandatory for multi-specialty groups starting in 2026, with subgroup reporting required by specialty.

The critical deadline: CMS plans to phase out traditional MIPS after the 2027 performance year. MVPs — and APMs — will become the only QPP participation options starting in 2028.