By Susan Lofton, VP of outcomes & clinical transformation, WebPT.
The recent layoffs at the Department of Health and Human Services (HHS) have far-reaching implications, not just for policymakers and providers, but for patients who rely on rehabilitation therapy services.
With HHS reducing its workforce by 25%, critical functions that support patient access, program funding, and policy guidance are under pressure.
With 300 positions eliminated at the Centers for Medicare & Medicaid Services (CMS), the agency faces a reduced capacity to provide operational support. This affects implementation guidance, billing and coverage clarification, and problem resolution. When new rules take effect, fewer staff are available to respond to therapists’ questions, creating delays that directly impact patient access and timely care delivery.
Impact on Patient Access and Services
The workforce changes have several potential implications for patients who receive rehabilitation services:
Telehealth Access Beyond September 2025
Medicare telehealth waivers that allow rehabilitation therapists to provide services remotely expired on September 30, 2025. Without further legislative action, PTs, OTs, and SLPs are not able to receive Medicare reimbursement for telehealth services billed after that date.
This matters particularly for homebound patients and those in rural areas who rely on remote therapy services. The uncertainty about telehealth creates significant planning challenges for practices that have incorporated telehealth into their service models and for patients who depend on remote access to care.
Service Delivery and Patient Access
When policy guidance is delayed or unclear, and when administrative processes take longer due to reduced staffing, healthcare facilities face challenges in service delivery. This can translate into longer wait times for appointments, delays in starting treatment, and uncertainty for practices trying to navigate new policies with less federal support available to answer questions.
Research and Future Innovation
Changes to National Institutes of Health (NIH) research funding and oversight may affect the timeline for translating new research findings into clinical practice. While research will continue, the reduced capacity for managing research programs could slow the development and dissemination of new rehabilitation techniques and evidence-based practices that ultimately benefit patients.
Impact on Specific Populations
Jill Jacobs, executive director of the National Association of Councils on Developmental Disabilities, commented on the changes to the Administration for Community Living: “People with disabilities are at risk. This isn’t just about shifting funding. They are taking away a federal agency that is for and about people with disabilities and those who are aging.”
Patients from lower-income backgrounds, those with rare conditions, or individuals in rural areas often rely more heavily on federally supported programs. The Administration for Community Living specifically served older adults and people with disabilities – populations that frequently require PT, OT, and SLP services.
Quality Oversight
A smaller HHS workforce means reduced capacity for oversight activities. This includes monitoring of Medicare Advantage plans, which have become the primary Medicare option for many beneficiaries. According to a senior CMS official quoted in Government Executive: “Service standards for Medicare Advantage beneficiaries and Affordable Care Act consumers will suffer with a reduction in the people that handle their cases and with diminished oversight of the Medicare Advantage plans.”
What Rehabilitation Therapists Should Do
Given these changes, there are several practical steps therapists can take:
Stay Informed: Monitor updates through professional organizations – the American Physical Therapy Association (APTA), American Occupational Therapy Association (AOTA), and American Speech-Language-Hearing Association (ASHA). These organizations track policy developments and provide guidance to their members.
Plan Financially: With the 2026 final rule expected in November, practices should prepare for potential scenarios. Reduced CMS staffing may affect both the timing of the final rule and the availability of implementation guidance. Plan conservatively until the final rule provides clarity on actual reimbursement rates. Consider payer mix strategies that reduce dependence on any single payment source.
Document Thoroughly: Maintain thorough documentation. With reduced federal staffing and potential delays in policy clarification, clear records become increasingly important for managing audits and payment disputes.
Advocate: Contact congressional representatives to share how policy changes or delays affect your practice and patients. With the September 30 telehealth deadline lapsing, this is particularly urgent. Specific examples and concrete data are most effective. Participating in future public comment periods on proposed rules provides an opportunity to share your clinical perspective and concerns about policy changes.
Continue Professional Development: Stay current with continuing education and evidence-based practices, even as research funding patterns may shift.
Looking Ahead to 2026 and Beyond
There is debate about whether these workforce reductions will achieve the HSS stated efficiency goals or whether they will compromise service delivery. Public health experts have noted that maintaining current service levels with a significantly reduced workforce will be challenging; however, some proponents suggest the changes could lead to greater emphasis on chronic disease prevention, an area where rehabilitation therapists play an important role through mobility training, functional rehabilitation, and prevention of secondary complications. Whether reduced federal staffing will support or hinder initiatives in this area remains to be determined.
The Bottom Line
The HHS workforce reductions represent a significant change in federal healthcare administration. For rehabilitation therapists, this means navigating uncertainty around payment policies, adapting to potential delays in policy implementation and guidance, and managing possible changes in program funding. For patients, particularly those who depend on federally funded programs or Medicare services, there may be impacts on access timing and service availability.
By John Wallace, PT, MS, FAPTA, chief compliance officer, WebPT.
Being efficient doesn’t mean cutting every cost. In rehab therapy, it means knowing where lean systems are enough and where targeted investments pay off. Many practice owners take pride in their resourcefulness, but avoiding necessary spend can be just as damaging as overspending. True efficiency requires discernment, not deprivation.
Invest in Prevention, Not Just Cleanup
Many compliance challenges are preventable and often come down to education. Annual CPT coding refreshers, documentation training, and payer-specific updates help teams avoid the most common reasons for denials. Fortunately, these resources are widely available and affordable.
Associations like APTA, AOTA, and ASHA offer low- or no-cost defensible documentation checklists. Some EMRs also include built-in CPT code training modules that therapists can complete on demand. Even one annual training session can prevent dozens of costly mistakes and appeals.
A practice that spends wisely on education avoids far more costly cleanups later.
Know the Limits of Internal Fixes
Internal reviews, peer audits, and checklists can resolve most routine issues. But when audit denial rates spike, especially over the 50% mark, it’s time to rethink the DIY approach.
If you’ve already submitted records and received a wave of denials, don’t rush into appeals without backup. Bring in someone who can review your submissions, flag weak points, and ensure the full documentation story is being told. Even one overlooked missing element can tank an otherwise appropriate episode of care.
Waiting too long to get help can turn a manageable problem into a financial crisis.
Reevaluate Your Payer Strategy
Some of the most expensive mistakes rehab practices make don’t come from what’s in the documentation but from who they sign contracts with. It’s common for new owners to accept every payer agreement offered, thinking more plans means more patients. But each payer adds administrative overhead. If the reimbursement doesn’t offset the documentation burden, denials, and audit risks, that contract might be a liability, not an asset.
There are large commercial payers known for aggressive takeback audits. Talk to peers, evaluate patterns, and think critically about which payers are worth the work.
Out-of-network models, while not for everyone, offer more control and less regulatory friction. They require more patient communication and claim support but can protect clinical autonomy and reimbursement consistency in the long term.
When You Do Need Help, Get the Right Kind
Not every challenge requires outside support, but some absolutely do. If a payer is demanding a multi-year takeback or you’re staring down potential legal action, you need a healthcare attorney, not the business lawyer who helped set up your LLC. These legal experts specialize in payer appeals and regulatory defense, often working alongside compliance consultants to prepare defensible documentation reviews.
Start your search through professional associations, peer groups, or online rehab therapy communities. Platforms like Facebook and LinkedIn host active forums where practice owners regularly recommend experienced consultants and attorneys.
It’s not about bringing in an expensive expert for every small hiccup. It’s about knowing who to call when the stakes get high and acting early enough to protect your practice.
Efficiency with Intention
Running a low-cost practice doesn’t mean cutting corners or taking on every responsibility yourself. The most resilient clinics are the strategic ones, whose leaders are intentional with their budgets, prioritize staff training, protect themselves from risk, and avoid contracts that aren’t in their best interests.
Lean doesn’t mean minimal. It means strategic. Knowing when to pull in help or walk away from risk is one of the smartest moves a practice owner can make.
Denials are on the rise across the healthcare industry, hitting outpatient rehabilitation clinics especially hard. Margins are tight, staffing is limited, and many clinics don’t have the resources or infrastructure that larger organizations do. This puts them at a real disadvantage when it comes to managing their revenue cycle.
Many clinics are simply trying to stay afloat. They’re scrambling to get bills out the door, then waiting to see what feedback comes from the payers. As a result, they end up with high rejection rates, high denial rates, and a significant amount of unpaid accounts receivable. It’s a reactive approach to turning visits into revenue, and it’s not working.
The Root Problem: Front-End Errors
At WebPT, we’ve analyzed our revenue cycle management data (RCM) across our base and found that 67% of all exceptions (rejections, denials, and unpaid accounts receivable) originate from errors made at the front end of the revenue cycle. This includes improper registration, patient eligibility issues, and a lack of prior authorizations.
These are preventable problems. And yet they show up repeatedly, as many clinics don’t have the tools or training to catch them early. The truth is, physical therapists went to school for physical therapy, not business. Many rehab therapy practices are built around that clinical mindset. In turn, the business side ends up being reactive and manual.
Solution: Shift Left to Move Upstream and Solve It
The best way to tackle denials is to “shift left.” That means identifying root causes and solving them earlier in the process, before the claim is submitted. Use data to do this. If you can access the right data, you can analyze it to understand the patterns. Then you can address the issues that are causing denials, rather than just reacting to them.
For example, train your front desk staff to verify patient eligibility before they are seen. Perhaps you need to ensure the patient is registered correctly, so that when the bill is sent, the payer recognizes them. Alternatively, you may need to check that prior authorizations are in place. Some of this is training. Some of it is process. Some of it is using technology. However, all examples require a shift from a reactive to a proactive approach.
Start With the Data
Everything starts with the data. Rejections and denials usually come from the clearinghouse. That’s structured data that you can organize in a meaningful way. Unpaid accounts receivable is a little more subjective, as it comes from the practice management system and the team’s follow-up work.
In many clinics, people are working on these claims one at a time. They’re so deep in the day-to-day that they can’t see the patterns. It requires a system that allows staff to flag the reasons for nonpayment, giving you data you can analyze.
From there, you can examine whether your patterns are associated with a person, a process, a provider, or a payer. The numbers tell the story. The data shows you what to fix, and in what order.
Avoid the One-Size-Fits-All Trap
One mistake clinics can make is over-indexing. Take prior authorization, for example. Every payer has different requirements. If you say, “I’m just going to get prior authorization for every patient,” that creates a new set of problems.
You need a flexible solution. One that looks at the payer and follows the right path for that patient. Otherwise, you’re creating unnecessary work and frustration.
Make It an Ongoing Practice
Remember, this is not a one-and-done effort. You don’t fix it once and walk away. Payer policies change. Staff turnover happens. Patients change insurance. You need to maintain this effort over time. This means regularly revisiting the data, retraining staff, and adjusting processes when necessary to account for changes. It’s not optional. It’s part of how you run a successful business in healthcare today.
The Bottom Line
Rehab therapy clinics can’t afford to be reactive. Denials are too costly, and the system is too complex. But by starting with the data, identifying root causes, and shifting left, clinics can stabilize their revenue cycle and focus more energy on delivering care.
The process isn’t easy. But it’s worth it. Because every time you prevent a denial, you’re one step closer to running a healthier, more resilient practice.
By John Wallace, PT, MS, FAPTA, chief compliance officer, WebPT.
Running an effective outpatient rehab practice doesn’t require a big compliance budget or outside consultants. In fact, some of the most reliable ways to strengthen documentation, reduce audit risk, and improve clinical quality are low-cost and immediately actionable.
The key is building a system that doesn’t rely solely on technology and instead promotes internal accountability, peer feedback, and payer-specific awareness.
Stop Over-Relying on EMRs
Many providers assume that electronic medical records (EMRs) automatically produce compliant documentation. While EMRs offer structure through templates, prompts, and required fields, they cannot ensure that clinical reasoning is present or that notes meet payer-specific requirements. Providers must still enter the correct information, explain why care is being provided, and update plans based on progress. This is where many practices fall short.
Implement Internal Peer Review
Most small to mid-sized practices do not have a formal compliance team or the resources to hire third-party auditors. But peer review, when done systematically, can be just as effective. A simple and powerful approach is to host regular in-services where therapists exchange completed episodes of care for review.
Each provider prints a full case—from evaluation through discharge—and trades it with a colleague. That colleague uses a checklist to assess the documentation for clarity, completeness, and alignment with the original plan of care.
This process improves documentation quality immediately. Therapists rarely revisit old cases from start to finish. Reading an episode in full reveals gaps a reviewer would catch. It also builds a culture of shared responsibility and accountability. If one clinician can’t tell what was done, why it was done, or how the patient responded, chances are an auditor can’t either.
Use Payer Resources
Another no-cost strategy is reviewing documentation guidelines directly from your top payers. Most outpatient rehab practices are concentrated among eight to 12 major insurers. Nearly all of these payers publish documentation policies for physical therapy, occupational therapy, and speech-language pathology. These documents are often brief, easy to find, and outline exactly what each insurer expects to see for each CPT code.
Despite their availability, few clinics take the time to pull and review these resources. Doing so can significantly reduce the risk of denials. It also helps ensure that what gets documented aligns with payer expectations, not just internal habits or EMR prompts.
Audit Long Episodes of Care
While spot-checking records is helpful, clinics should also focus on cases most likely to trigger scrutiny, like long episodes of care. If a patient receives 30 visits for a minor injury (e.g., a sprained ankle), that file should be reviewed internally. There may be a valid reason for that volume of care, but it should be clearly documented. Without a clear narrative justifying the duration or intensity of treatment, even appropriate care can be denied in an audit.
Internal reviews don’t need to be time-consuming. A one-hour monthly or quarterly session, where each therapist reviews a colleague’s case using a standard score sheet, can drastically improve quality. It also encourages therapists to reflect on their own notes before sharing them, improving accuracy and defensibility.
Focus on Coding Accuracy
Another common source of audit failure is misunderstanding CPT codes. Therapists often default to using familiar codes without fully understanding their definitions. This creates gaps between what was billed and what was documented. Practices should require annual coding reviews for all clinicians.
Many payers offer clear expectations for each code, and resources from professional associations provide examples of defensible documentation. Clinics don’t need expensive software or audits to fix coding issues. They need awareness, periodic review, and internal education.
Reinforce Real-Time Documentation
Timely documentation is another low-cost, yet high-impact, compliance area. Most EMRs track notes that are started but not finalized. Clinics should monitor this regularly to make sure that documentation is completed promptly after patient visits.
When therapists wait until the end of the day or week to complete their notes, they’re more likely to reconstruct sessions from memory rather than accurately capture what happened. The longer the delay, the more likely the record becomes a narrative rather than a factual account.
Encouraging therapists to complete notes during or immediately after sessions improves accuracy, reduces risk, and ensures continuity of care. Even if it’s not always possible, setting the expectation and tracking completion timelines can make a meaningful difference.
Build a Sustainable, Low-Cost Compliance System
Effective compliance doesn’t have to mean expensive consultants or complex tools. By establishing a straightforward internal system centered on peer review, payer expectations, timely documentation, and basic coding education, practices can safeguard themselves against audits, enhance patient care, and operate more efficiently.
These systems may be inexpensive, but they are not optional. With increased audit activity from both commercial payers and CMS, the ability to show complete, accurate, and medically necessary documentation is essential to the health of the practice. It doesn’t take a big budget to get it right—just consistent attention to the details that matter most.
By John Wallace, PT, MS, FAPTA, chief compliance officer, WebPT.
Federal audits targeting Centers for Medicare & Medicaid Services (CMS) reimbursements are intensifying, and rehab therapists are already feeling the impact. In the wake of public announcements about increased efforts to eliminate fraud, waste, and abuse in federal healthcare programs, both Medicare and commercial payers have significantly ramped up their auditing activities.
Historically, audits of this kind disproportionately affected large practices. Today, however, even small and mid-sized clinics are receiving record requests from both CMS and commercial insurers. For providers billing Medicare or Medicaid—even those with a long history of compliance—this shift signals the need for heightened awareness, tighter documentation, and proactive internal oversight.
The Changing Landscape of Rehab Audits
The rise in CMS audits is not occurring in isolation. As Medicare strengthens its oversight through contractors like Medicare Administrative Contractors (MACs) and program integrity auditors, commercial payers are quickly following suit.
While CMS is transparent in publishing documentation expectations and typically approaches audits as educational, commercial payers often take a more punitive stance. Some conduct takeback audits based on small samples, then extrapolate error rates across years of claims to justify large recoupment demands.
This dynamic poses an especially difficult challenge for smaller practices. Commercial insurers, despite often paying significantly less than Medicare (e.g., sometimes 10% to 40% lower), are applying similar levels of scrutiny. And they’re not offering education. They’re demanding repayment.
Where Rehab Providers Are Most Vulnerable
The most frequent audit failures do not stem from fraud, but from insufficient or inconsistent documentation. Many rehab therapists rely heavily on electronic medical records (EMRs) to generate compliant records, but EMR systems alone cannot ensure accuracy. While structured fields and templates are helpful, providers must still input the correct clinical details to meet payer requirements.
One of the biggest vulnerabilities is the lack of regular internal compliance review. Large organizations may employ dedicated compliance staff, but small and medium-sized practices often operate without any formal chart review process. Unfortunately, this reactive model leaves providers exposed. Audits arrive without warning, and without a clear understanding of where documentation falls short, even well-meaning clinics may struggle to defend their claims.
By Heidi Jannenga, PT, DPT, ATC, co-founder and chief clinical officer, WebPT.
Before the COVID-19 pandemic began, only 2% of physical therapists were providing telehealth consultations. Since then, telehealth has evolved into an integral part of the rehab therapy industry. This was no easy feat, as physical therapists have long been left out of telehealth.
According to WebPT’s 2021 State of Rehab Therapy report, 44% of therapy professionals reported using videoconferencing or virtual meeting software for the first time in 2020, and 40% reported using telehealth software for the first time. As interest in remote services continues beyond initial pandemic lockdowns, our entire industry needs to flex and embrace new technology. Here’s what to know.
The rise of telehealth
The transition to telehealth has brought countless benefits to physical therapy (PT) providers, along with a few challenges. While it’s true that telehealth will never replace hands-on treatment, it is an extremely promising alternative method of care delivery—and a true game-changer for the industry. In fact, our research has found that 9 in 10 therapy professionals have patients showing interest in telehealth services. This is no surprise, since telehealth offers the convenience that today’s patients want.
Telehealth allows PTs to reach a much wider range of patients than they would otherwise be able to treat. Many patients live in remote areas or do not have the time to travel to a clinic, making telehealth an ideal alternative. It also expands access to care for patients who might otherwise never receive PT treatment. This is extremely important, since 90% of those who could benefit from PT never receive it. At the same time, telehealth supports revenue diversification to safeguard clinics against future crises.
Another advantage of telehealth is how it allows physical therapists a new view into their patients’ lives and to learn how to provide the best help possible. For example, PTs can now see a patient’s home and gather clues regarding their environment, which helps them provide more customized treatment and advice. For example, do they have stairs in their home, are there transitions from hard flooring to carpet, or do they live alone?
Finally, PT and OT have been shown to be beneficial for those who have suffered severe COVID-19 cases, especially those who are struggling with muscle and respiratory weakness. These patients are able to receive the help they need through telehealth without putting others at risk. Also, a 2022 JAMA study shows that “telehealth encounters for chronic conditions had similar rates of follow-up to in-person encounters for these conditions.” Altogether, we can expect telehelath to play a greater role in managing ongoing conditions—including those best addressed with physical therapy.
