2027 Medicare Fee Schedule for Therapists: 4 Easy Facts
The 2027 Medicare fee schedule for therapists is the set of payment rates CMS plans to use for Medicare services starting January 1, 2027. As of October 24, 2026, it is a proposal, not a final rule. This guide explains what CMS proposed, what it does not tell you, and what to do before the final version arrives.
The 2027 Medicare fee schedule for therapists is a proposal
The Centers for Medicare & Medicaid Services (CMS) published its calendar year 2027 Physician Fee Schedule proposal on July 14, 2026. Its fact sheet says the proposed policies would apply to services on or after January 1, 2027. CMS’s physician news page lists September 14 as the comment deadline. Until CMS issues a final rule, treat every number below as a proposal. Do not change your budget or your contracts on a proposal alone.
Fact 1: the conversion factor would fall
The conversion factor is the dollar amount CMS multiplies by a service’s relative value units (RVUs) to set a payment. Under the proposal, the 2027 Medicare fee schedule for therapists would use a lower conversion factor than 2026. An RVU is explained in our billing terms glossary.
| Group | 2026 | Proposed 2027 | Change |
|---|---|---|---|
| Qualifying APM participants | $33.57 | $33.17 | -1.19% |
| Not qualifying | $33.40 | $32.84 | -1.68% |
CMS explains that Public Law 119-21 gave a one-year 2.50% increase for 2026 that ends in 2027, which it says works out to a 2.50% reduction against 2026. The fact sheet also lists statutory updates of +0.75% and +0.25% and an estimated +0.53% adjustment for proposed work RVU changes. Whether you fall in the first row depends on participation in an advanced alternative payment model. If you are unsure which applies to you, ask your accountant or Medicare contractor.
Fact 2: psychotherapy codes finish a four-year phase-in
CMS finalized higher work RVUs for psychotherapy and other timed behavioral health codes in the 2024 rule, phased in over four years. For 2027, the fact sheet says CMS proposes to include smoking and tobacco use cessation services and screening, brief intervention and referral to treatment (SBIRT) services in the last year of that transition. It does not announce a new psychotherapy increase. The 2027 Medicare fee schedule for therapists, as summarized there, gives no code-by-code rates, so look up your own codes before you plan around any figure.
Fact 3: what the proposal does not tell you
The 2027 Medicare fee schedule for therapists is not a commercial price list. Keep the rules separate when you plan.
Private payers
Commercial rates come from each payer’s contract. Some contracts tie rates to a Medicare fee schedule, and many do not, so open yours to see. A contract compliance file shows what to track. If a payer pays less than your contract says, see underpayments.
Medicare and Medicaid
The proposal covers Medicare payment under the Physician Fee Schedule. Medicaid is run by each state and sets its own rates, so a Medicare change does not set a Medicaid rate. For rural health clinics and federally qualified health centers, the fact sheet also proposes that in-person visit requirements for mental health visits not apply through December 31, 2027, under Section 6209(c) of the Consolidated Appropriations Act, 2026.
State rules
State Medicaid fee schedules and state insurance laws vary, so check your state’s Medicaid agency and insurance department for rules in your state. Psychiatrists should know the fact sheet lists no changes to evaluation and management (E/M) visits or the psychotherapy add-on codes. Check the proposed rule’s RVU tables for the codes you bill.
Fact 4: look up your own rates under the 2027 Medicare fee schedule for therapists
How do you find what Medicare would pay for your codes? Use the CMS Physician Fee Schedule look-up tool and check the year and your locality. Compare the proposed and current amounts for the handful of codes you bill most, and save the screenshot with the date. CMS’s Physician Fee Schedule page links to the files behind the tool. A smaller conversion factor may not move every code the same amount, so do not use one percentage for all of them.
What to do Monday morning
- List your ten most-billed Medicare codes, including any psychotherapy and E/M add-on codes.
- Look each one up in the CMS tool and note the current amount and date.
- Open your commercial contracts and mark any that reference a Medicare fee schedule.
- Compare the amounts against your recent remittance advice, then set a reminder to check CMS for the final 2027 Medicare fee schedule for therapists and re-run the look-up the week it appears.
- Review your cash flow buffer before you assume your 2027 revenue.
The short version: 2027 Medicare fee schedule for therapists
The 2027 Medicare fee schedule for therapists is a CMS proposal that would lower the conversion factor and finish the psychotherapy phase-in. It is not final. Look up your own codes now and re-check when CMS issues the final rule.
How MCM South helps
MCM South Medical Billing Service, LLC bills exclusively for mental and behavioral health, for psychotherapists and psychiatrists in solo and medium-size practices. We bill out-of-network claims for clients, and you can read more about who we serve. When payment rules change, a billing team that reads the payer’s remittance every month spots the effect early; ask us how that works for your practice.
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Related reading
Want help planning around payer changes? We can talk through your practice.
FAQ
Is the 2027 Medicare fee schedule final?
Not as of October 24, 2026. CMS proposed it on July 14, 2026, and comments were due September 14. Check CMS for the final rule before you change anything.
Will Medicare pay therapists less in 2027?
The proposed conversion factor is lower than in 2026, but what you are paid depends on your codes, your locality and the final rule. Look up your codes in the CMS tool to see your own numbers.
Does the Medicare fee schedule set commercial insurance rates?
No. Commercial rates come from your contract with each payer. Some contracts reference a Medicare schedule, so read yours to find out.
Does this change what Medicaid pays?
No. Each state sets its own Medicaid rates. A Medicare proposal does not change them directly.
Where MCM South works
MCM South Medical Billing Service, LLC works with psychotherapists and psychiatrists in our ten currently served states: Georgia, Massachusetts, Connecticut, Texas, Florida, New York, Colorado, Tennessee, North Carolina and Illinois. We serve solo and medium-size practices that bill mental and behavioral health. Founder Michael Williams has worked with insurance payers in all 50 states. Browse the state and regional billing guides for rules that vary by state, or see our billing services.
This post is operational guidance for billing, not legal advice. Rules change, so confirm with the payer or your counsel.
