CMS Proposes Major Medicare Payment and Policy Updates for 2027
Published: July 2026
The Centers for Medicare & Medicaid Services (CMS) has released its proposed Medicare Physician Fee Schedule (MPFS) for Calendar Year 2027. If finalized, these updates will affect reimbursement, compliance requirements, documentation, and quality reporting for providers delivering outpatient physical therapy, occupational therapy, and speech-language pathology services.
Below is an overview of the most important proposed changes and what they could mean for therapy practices.
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Proposed Medicare Conversion Factor for 2027
CMS is proposing separate conversion factors based on participation in Alternative Payment Models (APMs).
Qualified APM Participants (QPs) • 2027 Proposed Conversion Factor: $33.1693 • 2026 Conversion Factor: $33.59
Non-Qualified APM Providers
Most outpatient therapy practices fall into this category. • 2027 Proposed Conversion Factor: $32.8408 • 2026 Conversion Factor: $33.40
If approved, this represents an approximate 1.7% reduction in reimbursement.
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Therapy Thresholds for 2027
CMS proposes increasing the annual therapy thresholds to: • Physical Therapy + Speech Therapy (combined): $2,540 • Occupational Therapy: $2,540
These thresholds determine when additional documentation requirements apply under Medicare.
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Targeted Medical Review Threshold
The proposed threshold for targeted medical review would increase to: • PT and SLP Combined: $3,000 • OT: $3,000
Providers exceeding these amounts should continue maintaining thorough documentation supporting medical necessity.
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Relative Value Unit (RVU) Updates
CMS has published proposed Relative Value Units (RVUs) for therapy-related CPT codes used by physical therapists, occupational therapists, and speech-language pathologists.
Practices should review these proposed values carefully since they directly influence reimbursement.
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Biofeedback Coding Changes
CMS is proposing revisions to biofeedback billing beginning in 2027.
CPT 90901
This code would now represent: • Initial 15 minutes of direct patient contact using biofeedback (EMG, EEG, ECG, or similar modalities).
New Add-On Code
A new CPT code will be introduced for: • Each additional 15 minutes of biofeedback performed on the same day.
The final CPT number will be assigned after the American Medical Association publishes the 2027 CPT code set.
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New Speech Therapy CPT Codes
Ten new speech-language pathology CPT codes are proposed for 2027.
CMS intends to adopt the Relative Value Update Committee (RUC) recommendations for work RVUs associated with these codes.
However, CMS inadvertently omitted practice expense values for eight of these codes in the proposed rule and is expected to correct this before publication of the final rule.
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New Pediatric Speech Therapy HCPCS Code
CMS is proposing a new HCPCS code specifically designed for pediatric speech-language services.
The proposed code would apply to: • Treatment of speech, language, communication, voice, and auditory processing disorders • Patients up to age 21
The goal is to better recognize the additional clinical resources often required when treating pediatric patients.
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Proposed Payment for Pediatric Speech Services
CMS proposes the following RVUs: • Work RVU: 1.30 • Practice Expense RVU: 0.71 • Malpractice RVU: 0.01 • Total RVU: 2.02
Using the proposed 2027 conversion factor, estimated Medicare reimbursement would be approximately $66.34.
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Remote Therapeutic Monitoring (RTM) Changes
Several significant RTM policy changes are being considered.
Established Patients Only
CMS proposes that RTM services only be billed for established patients.
For therapy providers, this generally aligns with current practice since RTM requires an active therapy plan of care.
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Clinical Staff Employment Requirement
CMS is also proposing that RTM services only qualify for payment when performed by clinical staff directly employed by the billing practice.
If finalized, practices would no longer be able to outsource RTM monitoring to third-party companies while billing Medicare.
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Possible RTM Code Consolidation
CMS is requesting public feedback regarding replacing several existing RTM CPT codes with simplified HCPCS G-codes covering: • Initial patient setup and education • Monthly monitoring • Device management • Interactive patient communication • Treatment management
This could significantly simplify RTM billing in future years.
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Proposed National RTM Payments
Estimated Medicare reimbursement under the proposed rule includes: CPT Code Proposed Payment 98975 $20.03 98976 $41.38 98977 $41.05 98978 $12.15 98979 $25.29 98980 $51.56 98981 $40.06 98984 $41.38 98985 $41.05 98986 $12.15
MIPS Performance Threshold
CMS proposes maintaining the Merit-based Incentive Payment System (MIPS) performance threshold at:
75 points
This would remain in place for the 2027 and 2028 reporting years.
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Additional MIPS Proposals
CMS is also proposing several broader MIPS changes, including: • Phasing out traditional MIPS reporting after the 2028 performance year • Allowing virtual groups to report through MVPs beginning in 2029 • Introducing three new MVPs • Updating all existing MVP pathways • Establishing new core quality measure reporting requirements
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New Quality Measures for Physical and Occupational Therapy
CMS proposes adding new Functional Improvement quality measures for patients with: • Neck impairments • Upper extremity impairments • Back impairments • Lower extremity impairments • Knee impairments
These measures would replace several existing Functional Status Change measures currently reported under MIPS.
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Changes to the Musculoskeletal Care MVP
CMS also proposes updating the Rehabilitative Support for Musculoskeletal Care MVP by: • Adding the new Functional Improvement measures • Removing seven older Functional Status Change measures • Adding a new Improvement Activity focused on individualized care planning • Eliminating two existing care coordination activities
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Parkinson’s Disease Quality Measure Update
CMS proposes modifying Quality Measure 291, which evaluates cognitive assessment for patients with Parkinson’s disease.
One important proposed change is the inclusion of physical therapy providers within the reporting denominator.
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Public Comment Period
CMS is accepting public comments on the proposed rule through:
September 14, 2026, at 5:00 PM EDT
Following the comment period, CMS will review stakeholder feedback before publishing the final Medicare Physician Fee Schedule later this year.
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What This Means for Therapy Practices
Although these proposals are not yet final, therapy providers should begin evaluating how the changes could affect operations, reimbursement, compliance, Remote Therapeutic Monitoring programs, and quality reporting.
Key areas to monitor include: • Reduced Medicare reimbursement through the lower conversion factor • Updated therapy and medical review thresholds • New pediatric speech therapy payment opportunities • Significant RTM operational changes • MIPS quality measure revisions • New CPT and HCPCS codes becoming effective in 2027
Practices that prepare early will be in a stronger position to adapt once CMS releases the final rule.
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Disclaimer: This article summarizes the proposed 2027 Medicare Physician Fee Schedule released by CMS. Because these policies are currently proposed, final reimbursement rates and regulatory requirements may change before implementation. Providers should review the final CMS rule once published and consult qualified reimbursement or compliance professionals regarding its application to their practice.
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