CMS Modified NCD 17 for Postural Drainage and Pulmonary Exercises, Effective January 9, 2026 — Here's What Billing Teams Need to Know

The Centers for Medicare & Medicaid Services modified NCD 17, the National Coverage Determination governing postural drainage procedures and pulmonary exercises, with an effective date of January 9, 2026. This coverage policy draws a clear line between services billed under physical therapy versus respiratory therapy — and the billing rules for each are not the same. No specific CPT or HCPCS codes are listed in the policy document itself, but the coverage distinctions have direct consequences for charge capture, claim routing, and reimbursement.

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Quick-Reference Table

Field	Detail Copy
Payer	CMS (Centers for Medicare & Medicaid Services)
Policy	Postural Drainage Procedures and Pulmonary Exercises
Policy Code	NCD 17
Change Type	Modified
Effective Date	January 9, 2026
Impact Level	Medium
Specialties Affected	Physical Therapy, Respiratory Therapy, Home Health, Skilled Nursing Facilities, Inpatient Hospital, Outpatient Physical Therapy
Key Action	Audit claim routing by provider type and care setting before submitting postural drainage or pulmonary exercise claims after January 9, 2026

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CMS Postural Drainage and Pulmonary Exercises Coverage Criteria and Medical Necessity Requirements 2026

The core of this CMS postural drainage coverage policy comes down to two questions: Who is performing the service, and where is it being delivered?

By default, CMS treats postural drainage procedures and pulmonary exercises as services nursing personnel can handle. That means the baseline expectation does not trigger physical therapy or respiratory therapy billing at all. Reimbursement under a therapist benefit category only applies when the attending physician's plan of treatment specifically determines that a therapist is required.

Medical Necessity Drives the Entire Coverage Decision

Medical necessity here is not a checkbox — it's the attending physician's documented clinical judgment. The policy says coverage applies when "acute or severe pulmonary conditions involving complex situations" make the knowledge and skills of a physical therapist or respiratory therapist necessary for safe and effective administration.

That determination must live in the plan of treatment. Without it, you have a claim exposure problem. If your billing team submits under a therapy benefit and the chart doesn't show the physician's documented rationale for requiring a therapist, you are looking at a claim denial.

Physical Therapist Coverage — Where It Applies

When the attending physician determines a physical therapist is required, that service is covered as physical therapy across four settings:

Physical therapy furnished in a hospital's outpatient department covers under the outpatient physical therapy benefit specifically — not the outpatient hospital benefit. Make sure your charge capture reflects that distinction.

Respiratory Therapist Coverage — Where It Applies (and Where It Doesn't)

This is where postural drainage billing gets complicated, and where claim denials happen most often.

When the attending physician determines a respiratory therapist is required, that service is covered as respiratory therapy in three settings:

#	Covered Indication Copy
1	Inpatient hospital services
2	Outpatient hospital services
3	Extended care services (skilled nursing facility) — but only when the SNF has a transfer agreement with a hospital that furnishes the service

Respiratory therapist services are not covered under the home health benefit. Full stop. If a respiratory therapist visits a patient at home to provide postural drainage or pulmonary exercises, Medicare does not pay for it. Routing that claim under home health will produce a denial.

Incident-To Coverage

Both physical therapists and respiratory therapists can provide postural drainage procedures and pulmonary exercises as incident to a physician's professional service. When billed incident-to, the service must meet all standard Medicare incident-to requirements — the physician must be present in the office suite, and the service must be an integral part of the physician's personal professional service.

This is a separate billing pathway that some practices overlook. If your physicians are supervising these services in the office setting, confirm your documentation and billing guidelines for incident-to services are current.

Prior Authorization

NCD 17 does not specify prior authorization requirements for postural drainage procedures or pulmonary exercises. However, prior auth requirements can exist at the Medicare Administrative Contractor level or through Medicare Advantage plans. Check with your MAC and any applicable Medicare Advantage payer before assuming prior authorization is not needed.

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Coverage Indications at a Glance

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CMS Postural Drainage Billing Guidelines and Action Items 2026

Here are the specific steps your billing team should take before submitting claims under this modified coverage policy.

Copy Action Items

If your organization has a complex mix of settings — inpatient, home health, SNF, and outpatient — loop in your compliance officer before the effective date of January 9, 2026 to review how this policy applies across each service line.

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CPT, HCPCS, and ICD-10 Codes for Postural Drainage and Pulmonary Exercises Under NCD 17

NCD 17 does not list specific CPT, HCPCS, or ICD-10 codes in the policy document. This is not unusual for older National Coverage Determinations — the NCD governs coverage conditions rather than specific code-level reimbursement rules.

That means your billing team needs to identify the correct codes through other sources. Check the relevant chapters of the Medicare Benefit Policy Manual (Chapter 6 §20, Chapter 7 §20, Chapter 8 §50, and Chapter 15 §60.2) for additional guidance. Your MAC's local coverage determinations may also provide code-level specifics for postural drainage and pulmonary exercise services in your region.

Work with your coding team or a billing consultant to confirm the right CPT codes for physical therapy and respiratory therapy services in each applicable setting. Then map those codes to the coverage conditions in NCD 17.

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