2027 Medicare Fee Proposal for Therapists

Last updated: August 3, 2026.

Short answer: CMS’s proposed 2027 Physician Fee Schedule would update what Original Medicare pays for outpatient mental-health services starting January 1, 2027, if finalized. It is not one blanket raise or cut: each service can move differently, and actual payment still depends on the clinician, setting, and location.

Proposal only: nothing changes on today’s claims. Keep using current Medicare rules until CMS publishes the final rule and final fee files.

What Does This Mean for Mental Health Professionals?

For therapists and group practices, some common psychotherapy services could be paid more, some could stay close to current levels, and others could move by a different amount. The impact will depend on the codes a practice bills, whether the clinician is a psychologist, clinical social worker, MFT, or MHC, and where and how the service is provided.

What this could mean for 90837: in a simplified national nonfacility example, the calculated amount for a 90837 session rises from about $167 in 2026 to about $185 under the proposed 2027 values—roughly 11%. Clinical social workers, MFTs, and MHCs are generally paid 75% of the clinical psychologist amount, or about $139 in the same proposed example. Your actual allowed amount can differ by location and setting.

CMS uses 90837 for individual psychotherapy lasting 53 minutes or longer. The numbers above are a teaching example built from CMS’s national files, not a final rate or a promise of what any claim will pay.

Practices should wait for the final rule, then compare the final amounts for their own codes, clinician roster, setting, and Medicare locality.

The Proposal in Plain English

CMS released the CY 2027 Physician Fee Schedule proposed rule in July 2026. The Physician Fee Schedule, usually shortened to PFS, is the system Original Medicare uses to price many professional services, including outpatient psychotherapy.

In plain terms, Medicare assigns a value to each service and then converts that value into dollars. It also adjusts the result for where the service was provided, the setting, and the kind of clinician billing. The technical values assigned to each code are called relative value units, or RVUs. CMS describes those inputs in its PFS lookup guide.

Why different services can move differently: CMS proposes a lower national conversion factor but higher values for several psychotherapy codes. A higher code value can offset the lower conversion factor, which is why therapists should not apply one headline percentage to every service.

Who This Affects

This proposal matters to clinicians and group practices billing Original Medicare under the PFS, including clinical psychologists, clinical social workers, marriage and family therapists, and mental health counselors.

Original Medicare and Medicare Advantage are not interchangeable. Medicare Advantage plans can have their own contracted rates, authorization rules, documentation policies, and payment methods. A proposed Original Medicare amount does not automatically become your Medicare Advantage rate. Review each Medicare Advantage contract and remit separately.

The Two Proposed 2027 Conversion Factors

The CMS fact sheet proposes two conversion factors for 2027:

• Qualifying Alternative Payment Model participant: about $33.17, down $0.40 or 1.19% from the 2026 qualifying-participant factor of about $33.57.

• Not a qualifying participant: about $32.84, down $0.56 or 1.68% from the 2026 factor of about $33.40.

The difference reflects separate statutory updates for qualifying and non-qualifying participants. CMS also proposes a positive work-RVU adjustment, but those items do not fully replace the one-year 2.5% increase that applied in 2026 and expires before 2027.

Your practice should confirm which factor applies rather than guessing from its size, specialty, or participation in Medicare. Qualifying status is a defined Medicare Quality Payment Program status, not a choice made separately for each psychotherapy claim.

Does This Mean Medicare Is Cutting Therapist Rates in 2027?

No, not across the board.

If RVUs stayed unchanged, the lower conversion factor would generally pull payment down. But the proposed Addendum B on the CMS-1848-P rule page also changes code-level RVUs. Several psychotherapy codes rise enough in the proposal to more than offset the lower non-qualifying conversion factor in a neutral national illustration.

Proposed nonfacility RVUs for common therapy codes

• 90791, psychiatric diagnostic evaluation: 5.19 in the current 2026 file to 5.26 proposed for 2027.

• 90832, 30-minute psychotherapy: 2.57 to 2.88.

• 90834, 45-minute psychotherapy: 3.41 to 3.82.

• 90837, 60-minute psychotherapy: 5.00 to 5.63.

• 90846, family psychotherapy without the patient: 3.17 to 3.69.

• 90847, family psychotherapy with the patient: 3.28 to 3.84.

• 90853, group psychotherapy: 0.91 to 1.03.

The 2026 values come from CMS's April 2026 national relative-value file; the 2027 values are proposals in Addendum B, not final payment amounts. They are nonfacility totals before geographic adjustment.

Two examples show why code-level math matters

To isolate the moving pieces, assume a national nonfacility service, geographic indices of 1.000, and the non-qualifying conversion factor. Under those deliberately simplified assumptions:

• 90791 is roughly flat: 5.19 RVUs x $33.4009 is about $173.35 in 2026. The proposal gives 5.26 RVUs x $32.84, or about $172.74 for 2027: approximately 0.4% lower.

• 90837 rises in this illustration: 5.00 RVUs x $33.4009 is about $167.00 in 2026. The proposal gives 5.63 RVUs x $32.84, or about $184.89 for 2027: approximately 10.7% higher.

These are teaching examples, not quoted rates. They are not your locality-specific allowed amounts, not a prediction of the final rule, and not the amount every provider will receive. Medicare applies geography to individual RVU components, and provider type, site of service, beneficiary cost sharing, secondary coverage, sequestration, and claim details can change the final remit.

The examples prove one limited but important point: “conversion factor down” does not mean “every therapy code down by the same percentage.”

Why Psychotherapy RVUs Are Rising

CMS says 2027 would be the fourth and final year of a transition finalized in the CY 2024 PFS to increase work RVUs for timed psychotherapy. So most of the psychotherapy increase is not a surprise policy invented for 2027; it is the scheduled final step of an earlier decision. The 2027 fact sheet explains the transition.

What is newly proposed is applying the final transition-year adjustment to smoking and tobacco-cessation counseling and to screening, brief intervention, and referral to treatment services, commonly called SBIRT. That may matter to practices that furnish and properly bill those services, but it does not create a new psychotherapy coding rule for every session.

Provider Type Still Changes the Payment

CMS has allowed enrolled MFTs and MHCs to bill Medicare independently since January 1, 2024. Its MFT and MHC payment page says Medicare pays those clinicians at 75% of what a clinical psychologist receives under the PFS. The CMS Medicare Mental Health booklet describes the same 75% basis for clinical social workers, while clinical psychologists receive 100% of the applicable PFS amount.

• Clinical psychologist: 100% of the applicable PFS amount.

• Clinical social worker: 75% of the clinical psychologist PFS amount.

• Marriage and family therapist: 75%.

• Mental health counselor: 75%.

Using the simplified proposed 90837 example above, 75% of $184.89 is about $138.67 before the other payment effects. That is still only an illustration. It is not a promise that an MFT, MHC, or clinical social worker will see $138.67 deposited for a 90837 claim.

What About Medicare Mental-Health Telehealth?

The proposal makes conforming changes for the Consolidated Appropriations Act, 2026. CMS says the in-person visit requirement for Medicare mental-health telehealth does not apply through December 31, 2027. That extension comes from statute; it is not a brand-new surprise created by the proposed fee schedule.

For the operational rules, modifiers, place of service, and timing, use our Medicare teletherapy billing guide rather than treating the 2027 proposal as a complete telehealth manual.

What Therapists and Group Practices Should Do

Now: do not change current billing

1. Keep current claim rules and fee tables in place. The proposal does not govern 2026 dates of service.

2. Export a baseline. Save 2026 allowed amounts and actual remits for your highest-volume Original Medicare codes, separated by clinician, locality, and place of service.

3. Confirm provider type and enrollment. A code-level increase does not erase the 100% versus 75% payment distinction.

4. Separate Original Medicare from Medicare Advantage. Do not mix plan-contract rates into the Original Medicare comparison.

5. Comment if the proposal affects your practice. CMS lists September 14, 2026, as the comment deadline on the proposed-rule page.

After CMS publishes the final rule

1. Replace proposed inputs with final ones. Check both conversion factors and the final RVUs for each code you actually bill.

2. Use your locality. Model the applicable Medicare Administrative Contractor fee file rather than a national illustration.

3. Apply the correct clinician percentage and setting. Then compare the model with the first 2027 remittances.

4. Investigate mismatches. A stale fee table, wrong enrollment record, place-of-service error, or plan-specific contract can hide the policy change.

If enrollment is still the open question, start with our guide to credentialing Medicare as a therapist or therapy LLC. For code definitions and time thresholds, see the mental-health CPT code guide.

Future Implications if the Proposal Is Finalized

The points in this section are operational implications, not CMS forecasts.

• Code mix will matter more than the headline. A practice concentrated in 90837 may see a different 2027 trend from one concentrated in 90791, even in the same locality.

• Provider rosters will matter to forecasting. A group with psychologists and 75%-paid clinician types should not use one projected allowed amount for every therapist.

• The scheduled psychotherapy transition ends. Practices should not automatically project another similar RVU step into 2028 unless CMS takes a separate action.

• Contract comparisons may get more revealing. If a Medicare Advantage or commercial contract references Medicare, the exact contract language and effective date will determine whether and when a federal change flows through.

Where Bomi Fits

Shameless plug: if comparing final CMS code values, locality files, provider enrollment records, and actual remits is not how you want to spend December, Bomi can run the insurance-side workflow. We help therapy practices reconcile who is enrolled how, model final allowed amounts, update billing operations, and trace mismatches after the first remits arrive. We cannot guarantee what CMS will finalize or what a particular claim will pay.

Frequently Asked Questions

Is Medicare cutting therapist reimbursement by 1.68% in 2027?

Not across the board. The proposed non-qualifying conversion factor falls by about 1.68%, but the proposal also increases RVUs for several psychotherapy codes. The final code-level, locality-adjusted calculation controls.

Should I change how I bill Medicare now?

No. This is a proposed rule. Keep billing 2026 services under current rules and wait for the final rule and final fee files before changing operational settings.

Does the proposal affect Medicare Advantage rates?

Not automatically. Medicare Advantage payment depends on the plan and your contract. Review those terms separately from Original Medicare.

Will every therapist receive the same 2027 Medicare payment?

No. The code, locality, site of service, clinician type, beneficiary cost sharing, secondary coverage, and claim-specific adjustments all matter.

Can MFTs and mental health counselors still bill Medicare independently?

Yes. The proposal does not reverse the independent Medicare billing pathway that began in 2024 for enrolled MFTs and MHCs.

When would the proposed 2027 rates take effect?

If finalized, the payment changes would generally apply to services furnished on or after January 1, 2027. The final rule and final fee files, not this proposal, should drive implementation.

Bottom Line

The proposed 2027 Medicare fee schedule does not translate into one percentage change for every therapist. CMS proposes lower conversion factors and higher RVUs for several common psychotherapy codes at the same time.

The practical takeaway: change nothing on current claims. Preserve a clean 2026 baseline, wait for the final rule, and then calculate the impact by code, locality, setting, and provider type before updating a fee table or revenue forecast.

Sources

• CMS — CY 2027 Physician Fee Schedule proposed-rule fact sheet

• CMS — CMS-1848-P proposed-rule page and Addendum B

• CMS — April 2026 national relative-value file

• CMS — Physician Fee Schedule lookup overview

• CMS — Psychotherapy coding and time guidance

• CMS — MFT and MHC Medicare payment page

• CMS — Medicare Mental Health booklet, March 2026