What it means for therapy
15-minute timed codes
- Most of a visit is time-based, outside the 2026 adjustment
- Nothing in 2027 changes that
Home / ASP Insights / Physical and occupational therapy
Insight · CY 2027 Physician Fee Schedule, proposed
The CY 2027 fee schedule in therapy terms: what moves on January 1
Short answer: the conversion factor most therapy practices use falls 1.68% to $32.84, remote therapeutic monitoring gets three new conditions of payment and the KX threshold moves to $2,540. Final rule expected in November; every number here is proposed.
$33.40 → $32.84 · nonqualifying CF
$2,480 → $2,540 · KX threshold
RTM · established patients only
Jan 1, 2027 · BB and BC telehealth modifiers
Edition
Oct 2026
Focus
CY 2027 PFS
Audience
PT · OT · SLP
Metric
$32.84 CF, -1.68%
Effective date
Jan 1, 2027
Length
6 min read
Both numbers go down
Nearly every therapy code is paid as RVUs times this number. The arithmetic: a 0.75% statutory update for qualifying participants, 0.25% for everyone else, a 0.53% budget neutrality adjustment, and the loss of the one-year 2.50% increase from Public Law 119-21 [1].
Nonqualifying APM conversion factor by year
The 2026 bump was written as one year [4].
$32.35baseCY 2025final
$33.40+3.2% vs 2025CY 2026final, one-year increase
$32.84-1.68% vs 2026CY 2027proposed
Prior yearIn forceProposed
Timed codes stay exempt; the facility shift continues
The 2.5% efficiency adjustment from CY 2026 hits non-time-based services every three years and exempts timed codes; CY 2027 carries it forward with no new adjustment [4].
Where to look
Untimed codes
- Your charge mix against the Codes Subject to Efficiency Adjustment file in the CY 2027 rule
| Practice expense item | Status | Who feels it |
|---|---|---|
| Facility PE on work RVUs at half the non-facility share | Finalized CY 2026, continued | Hospital outpatient and SNF therapy relative to private practice |
| Indirect PE for visits during a Part A SNF stay, facility differential | Proposed CY 2027 | Part B therapy in SNFs |
| Site-of-service differential for hospital-employed practitioners | Comment solicitation | Health system therapy departments |
| PE stabilizer replacing specialty PE per hour steps | Proposed phase-out | All specialties over several years |
Three new conditions of payment, in order
CMS also seeks comment on replacing the 17 remote monitoring codes with four G-codes, GRPM1, GRPM2, GRTM1 and GRTM2: a solicitation, not a proposal [2].
1. Established patient
Who qualifies
- New patients cannot start RTM under the proposal
2. Initiating visit
Before monitoring starts
- In person or telehealth; RTM discussed, consent obtained; separately billable
3. Employed clinical staff
Who monitors
- Direct employees under general supervision; contracted monitoring companies would not qualify
The November Therapy Operator sets out the order of operations and what to do with patients already on RTM in December.
$2,480 times 1.025, rounded to $2,540
Per-beneficiary therapy thresholds
Estimated 2.5% MEI, recomputed for the final rule. Medical review stays at $3,000 through CY 2027, indexed from 2028 [2].
CY 2026 KXPT + SLP combined; OT separately
$2,480in force, 100%
CY 2027 KXproposed
$2,540+2.4%
Targeted medical reviewthrough CY 2027
$3,000121% of the 2026 KX line
$0$1,000$2,000$3,000
In forceProposedMedical review line
The chart standard is unchangedThe KX documentation checklist lists it; RAC topic 0228 is approved to read those claims.
From proposed rule to January, and the telehealth clock beside it
Telehealth dates come from statute and the CMS FAQ of October 8, 2026, not the fee schedule: PTs, OTs and SLPs may furnish Medicare telehealth through December 31, 2027 under section 6209 of the Consolidated Appropriations Act, 2026 [3].
- 1Jul 14, 2026CY 2027 PFS proposed rule published
- 2Sep 14, 2026Comment period closed
- 3Oct 8, 2026Telehealth FAQ: BB and BC from January 1, 2027
- 4Nov 2026Final rule expected; re-verify every number
- 5Jan 1, 2027New factor, KX amounts, RTM conditions, modifiers
- 6Dec 31, 2027End of therapy telehealth authority
Rulemaking
Proposed, comments, final rule
Conversion factor
$32.84 from January 1 if finalized
KX and RTM
$2,540 KX; three RTM conditions
Telehealth
Through Dec 31, 2027; BB and BC from Jan 1, no payment effect
RulemakingPayment cutProposed rulesTelehealth authority
Takeaway
Plan 2027 on $32.84, treat $2,540 as a draft, sort your RTM panel by the three conditions now. Everything here is proposed until the November final rule.
Before the final rule
Reprice your top 20 codes at $32.84$33.17 for qualifying APM participants; compare to 2026.
List every patient on RTMInitiating visit, established status, and who runs the monitoring if the employed-staff condition is finalized.
Load $2,540 as a draft KX thresholdConfirm against the final rule; keep $3,000 for medical review.
Add BB and BC to the telehealth claim templateEffective January 1, 2027.
Name who loads the final ruleRulebooks: OT billing guide 2027, PT scorecard. Our PT, OT and speech billing teams load it the week it posts.
Frequently asked questions
What is the proposed therapy conversion factor for 2027?
Nonqualifying, most therapy practices: $32.84, down $0.56 or 1.68 percent from $33.40. Qualifying APM: $33.17, down 1.19 percent from $33.57. The one-year 2.50 percent CY 2026 increase expires, which drives most of the decrease.
Does the efficiency adjustment hit timed therapy codes in 2027?
No. The 2.5 percent adjustment applies to non-time-based services and exempts time-based codes, telehealth list services and new codes. It runs every three years; CY 2027 proposes no new adjustment.
What is the proposed KX threshold for 2027?
$2,540 for PT and SLP combined and $2,540 for OT: $2,480 times an estimated 2.5 percent MEI increase, rounded to ten dollars, updated for the final rule. Medical review stays at $3,000 through 2027.
What changes for RTM under the CY 2027 proposed rule?
If finalized, from January 1, 2027 RTM is payable only for established patients, only after a separately reportable initiating visit, and only when furnished by clinical staff who are direct employees of the billing practice. CMS also seeks comment on four G-codes replacing the 17 remote monitoring codes.
- CMS fact sheet, CY 2027 Medicare Physician Fee Schedule proposed rule (July 14, 2026)
- Federal Register public inspection, CMS-1847-P, CY 2027 PFS proposed rule (comments closed September 14, 2026)
- CMS Telehealth FAQ, updated October 8, 2026
- CMS fact sheet, CY 2026 Physician Fee Schedule final rule (October 31, 2025)
- CMS, Therapy Services: CY 2026 KX thresholds and the CAA 2026 telehealth extension
Checked October 25, 2026. Rules change; confirm against the source. Items marked proposed come from the CY 2027 PFS proposed rule and are not final until the final rule publishes.
Want your 2027 therapy revenue modeled before the final rule?
We reprice your code mix at the proposed factor, flag RTM patients who miss the new conditions and load the KX amounts the day the final rule posts.