2027 Medicare Payment Changes for Behavioral Health Programs

CMS released both 2027 Medicare payment rules on November 4, 2026: the Physician Fee Schedule final rule (CMS-1848-F), which pays therapists, psychologists, psychiatric prescribers and collaborative care, and the hospital outpatient final rule (CMS-1850-FC), which sets intensive outpatient (IOP) and partial hospitalization (PHP) payment for hospital departments and community mental health centers. Both take effect January 1, 2027. The fee schedule publishes in the Federal Register on November 9 and the outpatient rule on November 6.

This guide pulls out what changes for behavioral health programs billing Medicare in Oregon and Washington, where Part B claims go to Noridian Healthcare Solutions, Jurisdiction F. Every number below is taken from the final rule text, not the proposals. For the mechanics of getting enrolled first, see our Medicare enrollment guide.

How much does the 2027 conversion factor change?

The fee schedule now has two conversion factors. The one most behavioral health practices use, for clinicians not in a qualifying alternative payment model, falls from 33.4009 to 32.6286, a 2.31 percent cut. The qualifying APM factor falls from 33.5675 to 32.9548, down 1.83 percent. CMS's fact sheet explains most of the drop: the one year 2.50 percent increase Congress added for 2026 expires.

A lower conversion factor does not mean every behavioral health code pays less. Your payment is the code's total relative value units, adjusted for the Oregon or Washington locality, times the conversion factor. For psychotherapy, 2027 is the fourth and final year of the 19.1 percent work increase CMS began phasing in for time based psychotherapy codes in 2024, so the work values rise again while the conversion factor falls. The rule does not print a dollar amount per code; Noridian posts the 2027 Oregon and Washington locality fee schedules, and that is the number to load.

Which behavioral health codes get higher values in 2027?

The final rule's table of revised work RVUs shows the last step of the psychotherapy phase in, and a one time jump for tobacco cessation and SBIRT, which CMS moved to the full 19.1 percent at once instead of phasing it in.

Psychological and neuropsychological testing codes did not get the increase. Commenters asked for it, and CMS declined because testing is not necessarily a timed service furnished without clinical staff, though it said it may revisit testing values later. CMS also left the 2.5 percent efficiency adjustment it adopted for 2026 in place without a new cut for 2027, and time based codes, which include psychotherapy, stay exempt from it.

What changes for collaborative care and behavioral health integration?

Collaborative care is the biggest winner. CMS had proposed to raise the Psychiatric Collaborative Care Model codes, and after comments it went further, valuing them against a level 4 office visit: 99492 rises to 3.25 work RVUs, 99493 to 2.56, and 99494 and G2214 to 1.28. The add on codes G0568 and G0569 used with advanced primary care management move to 3.25 and 2.56. CMS also raised the clinical labor rate for the Behavioral Health Care Manager from $0.57 to $0.70 a minute, which feeds the practice expense on collaborative care and on the office based substance use disorder codes G2086 to G2088.

General behavioral health integration, 99484 and G0323, was not revalued; CMS said it may look at those codes and office based opioid treatment in future rulemaking. The rule also confirms that alcohol use disorder management can be furnished under the behavioral health add on to advanced primary care management when its requirements are met, and that collaborative care and remote therapeutic monitoring can be billed in the same month as long as no minute is counted twice.

What happens to G2211 for psychiatric visits?

HCPCS add on code G2211 ends. In its place, modifier B1 on an office, outpatient, home or residence E/M visit raises that visit's payment by 16 percent of the E/M code, instead of a flat add on. Modifier B2, at 32 percent, is limited to clinicians in Shared Savings Program or LEAD accountable care organizations. B1 can be used on E/M visits furnished by telehealth, cannot be used on visits in RHCs, FQHCs or skilled nursing facilities, and still cannot be paid with a modifier 25 visit except alongside an annual wellness visit, vaccine or Part B preventive service.

The rule does not single out psychiatry. A psychiatric prescriber who bills 99212 to 99215 for ongoing care of a patient's single serious or complex condition qualifies on the same terms as any other specialty, so prescriber templates and charge rules that add G2211 today need to append B1 instead from January 1.

Can Medicare tele-mental health continue without an in-person visit in 2027?

Yes, through the end of 2027. CMS updated its telehealth regulation to match the Consolidated Appropriations Act, 2026. The rule text at 42 CFR 410.78 now says the in-person visit requirement for mental health telehealth does not apply through December 31, 2027, and audio-only visits to a patient at home are allowed on or before December 31, 2027. Geographic limits and the expanded originating sites, including the home, also run through December 31, 2027. CMS writes that it has no authority to extend these further; after that date, absent new legislation, the statutory limits return. Our telehealth compliance guide covers the clinical and state rules that sit on top of Medicare's.

Two claim changes arrive with it. From January 1, 2027, telehealth claims need modifier BB when the clinician furnishes the visit through a virtual platform owned by an entity they contract with or pay, and modifier BC when the telehealth service is furnished incident to a physician's or practitioner's service. CMS says neither modifier changes payment, but a claim missing one is a claim that can be rejected. Behavioral health services furnished incident to a practitioner stay under general supervision.

For rural health clinics and FQHCs, CMS made the matching change: the in-person requirement for mental health visits by telecommunications does not apply through December 31, 2027. The FQHC payment base rate rises 2.6 percent to $213.12.

What are the 2027 IOP and PHP numbers for hospitals and CMHCs?

The outpatient rule keeps the structure CMS set for 2026: separate payment for days with three services and days with four or more, for both IOP and PHP, with community mental health center amounts set at 40 percent of the hospital based amounts. IOP and PHP carry the same per diem values. Table 78 of the rule lists the final 2027 geometric mean per diem costs those rates are built from:

These are cost figures, not the final payment rates. CMS notes that budget neutrality and the 2.3 percent outpatient update mean the rates in Addendum A and B can land above or below them, so check the addenda before you change a budget. CMS estimates CMHCs will see a 28.3 percent increase in total 2027 payments. Programs in rural health clinics and FQHCs keep the IOP rates tied to the same hospital APCs, and IOP in an opioid treatment program is priced in the OTP fee schedule instead. The rule takes comments through January 4, 2027. Billing mechanics, condition codes and the weekly minimums are in our Medicare IOP billing guide.

What did CMS leave unchanged?

• OTP bundle rates. Neither rule addresses the weekly methadone or buprenorphine bundled payments described on CMS's opioid treatment program page. The fee schedule only moves the take home and added counseling codes G2078 to G2080 to an add on global period.
• ASAM Level 1.7. CMS asked whether it needs a code for the 1.7 level of care and whether to reprice G2086 to G2088, and finalized nothing, saying it will consider the comments in future rulemaking.
• Marriage and family therapists and mental health counselors. No change to how they bill. A request to lift the rural health clinic ban on billing group services, which keeps these clinicians from billing group, family or couples therapy there, was ruled outside the scope of the rule.
• Digital mental health treatment. G0552 stays contractor priced with no new uses, and the insomnia device supply price drops from $800 to $400.

What should Oregon and Washington programs do before January 1?

1. Load the new fee schedule. Pull Noridian's 2027 Oregon or Washington locality amounts for every code you bill once they post, and update the expected payment table in your billing system so underpayments show up.
2. Swap G2211 for B1. Change prescriber charge templates and any claim scrubber rule that adds G2211.
3. Add BB and BC logic. Decide which telehealth visits are on a contracted platform or incident to, and build the modifier into the claim before the first January date of service.
4. Calendar December 31, 2027. That is the last day for tele-mental health without an in-person visit and for home audio-only visits unless Congress acts again. Start tracking which telehealth patients have had an in-person visit.
5. Revisit collaborative care. At the new values, a primary care partnership billing 99492 to 99494 is worth modeling again if you dropped it.
6. Check CMHC and hospital IOP budgets against the addenda. Use the final Addendum rates, not the Table 78 costs, and file comments by January 4 if the rates miss your costs.

Rate changes are where underpayments hide. Each January, payers and clearinghouses update at different speeds, and a claim that pays at the old amount looks normal unless someone compares it to the new schedule. If you want that checked against your own remittances, our behavioral health billing team loads every payer's rates and works the variances, at the published rate on our pricing page. The wider collection picture is in our revenue cycle collections guide, and payer strategy beyond Medicare sits with our revenue cycle and payer team.

Frequently asked questions

When do the 2027 Medicare behavioral health changes take effect?

January 1, 2027. CMS released the Physician Fee Schedule final rule (CMS-1848-F) and the outpatient final rule (CMS-1850-FC) on November 4, 2026, for Federal Register publication on November 9 and November 6.

Does Medicare cut psychotherapy payment in 2027?

The conversion factor for most clinicians falls 2.31 percent, to 32.6286, but psychotherapy work values rise in the final year of the 19.1 percent phase in, for example 90837 from 3.78 to 3.94 work RVUs. The net payment depends on each code's total RVUs and your locality, so check Noridian's 2027 Oregon or Washington fee schedule.

Is the in-person requirement for Medicare tele-mental health delayed again?

Yes. Under the Consolidated Appropriations Act, 2026 and the updated 42 CFR 410.78, the in-person visit requirement does not apply through December 31, 2027, and the same date applies to RHC and FQHC mental health visits by telecommunications.

What are modifiers BB and BC?

New Medicare telehealth modifiers required from January 1, 2027: BB for services furnished through a virtual platform the clinician contracts with or pays, and BC for telehealth services furnished incident to a physician or practitioner. CMS says they do not change payment.

What replaces G2211 in 2027?

Modifier B1, appended to an office, outpatient, home or residence E/M visit, adds 16 percent of that visit's payment. Modifier B2 adds 32 percent but is limited to Shared Savings Program and LEAD accountable care organizations.

What are the 2027 Medicare IOP and PHP rates?

The outpatient rule lists 2027 geometric mean per diem costs of $309.85 and $507.39 for hospital based IOP or PHP days with three and with four or more services, and $123.94 and $202.96 for CMHCs. Final payment rates are in the rule's Addendum A and B and can differ.

New rates every January are the most common source of quiet underpayment. Our free billing audit reviews 90 days of your claims, remittance and AR aging under a signed BAA and returns written findings, with dollar amounts, in 5 business days, so you can see whether last year's Medicare and commercial rate changes were paid the way they should have been.