Update: CY 2027 Medicare Physician Fee Schedule Proposed Rule

With the release of the calendar year (CY) 2027 draft Medicare Physician Fee Schedule, APTA Private Practice is actively preparing our response to several key proposed changes. As we head into the public comment period, we remain deeply committed to our ongoing, collaborative advocacy with APTA and allied provider coalitions to champion permanent legislative reform.  

Overall Medicare Payment Update: For CY 2027, there will be 2 conversion factors, and the vast majority of PT practices will receive a CF of $32.8408. This amounts to a 1.68% reduction in the conversion factor from 2026, due largely to the expiration of the temporary 2.5% statutory increase enacted for 2026. Without congressional intervention, this continues the pattern of annual Medicare payment pressure. APTA Private Practice will continue to advocate for system reform that promotes quality patient care while also addressing the financial realities of private practices.  

Practice Expense (PE) Methodology Overhaul: CMS proposes significant changes to how PE RVUs are calculated, including phasing out the Indirect Practice Cost Index (IPCI) and placing greater weight on clinical labor. Because PT services are labor-intensive, the profession appears positioned to benefit from these changes, with initial estimates suggesting a net increase of up to 3% for some practices. Most high-volume therapy codes—including therapeutic exercise, neuromuscular re-education, manual therapy, therapeutic activities, and evaluations—would receive modest payment increases, generally ranging from 1% to 4%, driven almost entirely by PE changes. While the long-term impacts remain to be seen, our advocacy will focus on protecting these projected gains from being eroded by competing regulatory pressures during the public comment period.   

Remote Therapeutic Monitoring (RTM) Restrictions: Beyond the conversion factor, which is mandated by Congress, CMS is proposing to only allow payment for RTM services when furnished by clinical staff employed by the practice. If finalized, RTM codes could be billed in cases only when performed by clinical staff of the billing practitioner. As a result, third-party companies would be barred from billing for these services. This is a significant change and will be a focus of data gathering and broader advocacy by APTA Private Practice. Additionally, we are reviewing these changes in detail and will be prepared to equip members to address any necessary changes enacted in the final rule. 

Quality Reporting and MIPS Transition: CMS proposes to sunset traditional MIPS after the 2028 performance year and fully transition clinicians to MIPS Value Pathways (MVPs). PT-specific quality measures would also shift toward broader patient-reported outcome measures, creating ongoing reporting and implementation considerations for providers.   

If you have data related to remote therapeutic monitoring, or the impact of the proposed changes on your patients or your practice, please let us know by emailing us at info@ppsapta.org so that we can share them in our comment.

The draft rule can be accessed, along with CMS explanatory information here.