Summary:
Major workforce reductions across HHS agencies—including CMS, NIH, and ACL—are creating uncertainty for rehabilitation therapists by slowing policy development, disrupting research and grant administration, and reducing day-to-day operational support essential for clinical and business continuity.
Key Takeaways:
- Policy delays ahead: Reduced CMS staffing may slow the Medicare rulemaking process, hinder timely release of the 2026 fee schedule, and limit clarification on new reimbursement and supervision rules that practices need for planning.
- Research and funding disruptions: NIH and ACL workforce cuts may slow rehabilitation research, delay grant distribution, and strain community programs that rely on federal funding to provide PT, OT, and SLP services.
- Reduced operational support: With fewer HHS staff available to answer billing questions, resolve disputes, and issue implementation guidance, rehab therapists may face longer wait times and greater uncertainty in routine administrative processes.
By Susan Lofton
The Department of Health and Human Services (HHS) has recently implemented significant workforce reductions through Reduction-in-Force (RIF) notices connected to the ongoing government shutdown. While much of the public discussion has centered on the political and legal aspects of these actions, rehabilitation therapists face a practical question: How might these changes affect their daily work and the operations of their practices?
The Scope of the Reductions
The scope of the changes is substantial. This year, HHS reduced its workforce from 82,000 to 62,000 employees, a 25% reduction, and during the October shutdown, more than 4,200 additional employees received layoff notices, with agencies such as the Health Resources and Services Administration and the Agency for Healthcare Research and Quality among those affected.
How HHS Shapes Rehabilitation Care
HHS influences nearly every aspect of healthcare delivery for rehabilitation therapists through four key functions:
Policy and Reimbursement: The Centers for Medicare & Medicaid Services (CMS), which reduced its workforce by 300 positions, establishes policies and reimbursement rates that affect how rehabilitation services are delivered and paid for nationwide. This includes decisions about supervision requirements, coverage criteria, and billing procedures for physical therapy, occupational therapy, and speech-language pathology services.
Research and Innovation: The National Institutes of Health (NIH) eliminated 1,200 positions. NIH funds research into rehabilitation science, including studies on rehabilitation techniques, modalities, and strategies. This research leads to improved evidence-based practices that therapists use with patients.
Program Funding and Administration: Agencies like the Administration for Community Living (which lost approximately half its workforce) administer billions in grants for community health centers, early intervention programs, and services for older adults and people with disabilities—populations that frequently require PT, OT, and SLP services.
Day-to-Day Operations Support: HHS staff provide implementation guidance, answer billing questions, resolve coverage disputes, and help therapists and patients navigate complex administrative processes. With reduced staffing, this support capacity has diminished significantly.
What HSS Layoffs Mean for Rehabilitation Therapists
1. Policy and Reimbursement
CMS is responsible for developing and updating Medicare and Medicaid policies that affect therapy services. With reduced staffing, there are fewer employees available to meet the statutory timelines for these policy updates, including the Medicare physician fee schedule that determines reimbursement rates.
The 2026 Challenge: The 2026 Medicare Physician Fee Schedule proposed rule was released in July 2025, with the final rule expected in early November following typical CMS timelines. However, this complex rulemaking process now involves a significantly reduced workforce.
The proposed rule includes various changes that professional organizations like the American Physical Therapy Association (APTA) have raised concerns about and requested clarification on. With fewer CMS staff available, the process of reviewing public comments, addressing stakeholder questions, and finalizing the rule becomes more challenging. This creates uncertainty about whether the final rule will be released on schedule, whether stakeholder concerns will be adequately addressed, and whether timely implementation guidance will be available when new policies take effect January 1, 2026.
Beyond 2026, the larger question is whether a reduced CMS workforce can maintain the ongoing cycle of policy development, stakeholder engagement, and regulatory updates that rehabilitation practices depend on for operational planning.
2. Research and Innovation
NIH workforce reductions may affect the agency’s capacity to fund and oversee research initiatives, e.g., studies that focus on rehabilitation techniques, pain management, adaptive equipment, swallowing disorders, and cognitive rehabilitation strategies. Changes to this workforce could affect the timeline, administration, and availability of research funding and processes.
3. Program Funding and Administration
The Administration for Community Living reduced its workforce by almost half, from over 200 employees to roughly 100, including most of its regional offices. This agency administers a $2.6 billion annual budget for programs serving older adults and people with disabilities – populations that frequently use rehabilitation therapy services. This has created uncertainty for community-based programs that depend on federal grants, including community health centers offering therapy for low-income populations, early intervention programs for children with developmental delays, and therapy services for older adults. The timeline for distributing these funds and the capacity to administer the programs effectively remains unclear.
4. Day-to-Day Operations Support
With 300 positions eliminated at CMS and activities paused during shutdowns, there is significantly reduced capacity to provide the day-to-day operational support that rehabilitation therapists depend on. This affects multiple areas:
Implementation Guidance: When new policies take effect, therapists typically need clarification on how to apply the rules in practice. With fewer staff available to respond to questions and provide guidance, getting timely answers becomes more challenging.
Billing and Coverage Questions: Practices regularly need to resolve billing questions, understand coverage decisions, and work through authorization issues. Reduced staffing means longer response times and fewer resources available to help navigate these administrative processes.
Problem Resolution: When issues arise (e.g., coverage disputes, payment problems, or policy interpretation questions), there are fewer federal staff available to help resolve them. This can leave practices and patients waiting longer for answers that directly affect care delivery.
The Bigger Picture for Rehab Practices
For rehabilitation therapists, the effects of the HHS workforce reductions are multifaceted. A slower policy cycle may cause confusion about reimbursement changes. Reduced NIH capacity may stall progress in evidence-based care. And diminished day-to-day support could create uncertainty in navigating payer rules.
As practices prepare for 2026, many will need to adjust expectations around policy timelines and plan proactively for potential delays in federal guidance. Monitoring professional organizations such as APTA, AOTA, and ASHA becomes increasingly essential to stay informed and mitigate disruption.
The coming months will test whether HHS can maintain essential functions with a smaller workforce, or whether these cuts will cascade into challenges for rehabilitation therapists and their patients nationwide.
About the Author:
Susan Lofton is the VP of outcomes & clinical transformation at WebPT, a rehab therapy platform designed to offer innovative, end-to-end solutions that help providers optimize operations, improve patient outcomes, and drive business success.
Featured image: ID 91658665 © Chih Yuan Wu | Dreamstime.com
