2027 Fee Schedule Final Rule: Big Changes for RTM and Rehab Therapy Reimbursement

CMS released the final CY 2027 Physician Fee Schedule on November 4, 2026, and for private practice therapists, the news is mixed… some good, some less good. 

The conversion factor drops 2.31 percent, the practice expense (IPCI) overhaul delivers modest gains for physical and occupational therapy codes over time, and remote therapeutic monitoring (RTM) takes a modest cut with two years to bring monitoring in-house instead of the originally proposed two-month deadline. 

A lower conversion factor

For 2027, the conversion factor falls to $32.6286 from $33.4009 (about 2.31 percent) for clinicians who are not qualifying participants in an Advanced APM, which will be most rehab therapy clinicians. 

The main driver is the expiration of the one-year 2.5 percent increase Congress provided for 2026. CMS then applied the 0.25 percent statutory update and a 0.12 percent budget neutrality reduction. The final cut is deeper than the 1.68 percent CMS proposed in July. Practices that qualify as Advanced APM participants get a separate factor of $32.9548, down 1.83 percent. 

The IPCI outcome: real gains

CMS finalized its plan to remove the steps of the practice expense methodology that rely on the indirect practice cost index (IPCI), which it says “effectively favor the aggregate specialty-level survey data over the code level inputs.” Half of the change applies in 2027, the rest in 2028. 

CMS’s impact analysis projects “smaller increases to physical and occupational therapists.” APTQI estimates the PE RVUs for many common therapy codes will increase 5 percent per year for the next six to seven years.  

Impact to SLP

Speech-language pathology moves the other way. 

ASHA expects that the same methodology changes will lower SLP practice expense values. SLPs also start 2027 with a new code set. The AMA CPT Editorial Panel replaced 92507 with 10 new codes, and CMS finalized their values as proposed, designated all of them “always therapy,” and applied the therapy multiple procedure payment reduction to the initial 30-minute codes. 

The KX modifier threshold rises to $2,540 for PT and SLP combined and $2,540 for OT. 

Significant changes ahead for RTM

As we expected from the proposed rule, payment for RTM codes will decrease, but not by as much as initially proposed. The bigger change that needs to be flagged is to RTM staffing. 

CMS finalized changes to RTM requiring that monitoring be provided by clinicians and clinical staff who are directly employed by the practice or provider, prohibiting third-party vendors from providing monitoring to patients. 

While CMS did finalize this provision, it also listened to commenters who requested a delay in implementation. 

Let's dig into the details here on each of the changes to RTM.

RTM payment

RTM payment dips less than anticipated, but the reduction is still significant due to adjustments to the practice expense portion of the codes. The device codes (98977 and 98985) fall by about 20 percent, from $51.44 to $40.70, and the setup code (98975) decreases by about 8 percent, from $21.70 to $19.70. Treatment management codes will hold steady or rise slightly. CMS says it cut the device and setup codes after receiving “very little invoice or pricing information” for the devices involved. 

The AMA’s RUC will review all of the remote monitoring codes in January, so rehab leaders should keep in mind that the RTM codes, requirements, and payments will continue to evolve over time.

RTM is for established patients

RTM patients must be established patients. For rehab therapists, this means a patient under a therapy plan of care, which is already required of every therapy RTM patient due to the “sometimes therapy” classification of the RTM codes. The billing practitioner must also conduct a face-to-face initiating visit, in person or via telehealth, during which RTM is discussed; patients already on RTM continue under the current rules. 

Third-party staffing prohibition finalized

Despite widespread industry opposition to the changes to third-party staffing for RTM, CMS decided to move ahead and finalize new rules around who can bill for RTM services or contribute to the RTM codes.

Specifically, CMS will require RTM services to be furnished by staff who are direct employees of the billing practice.

Recognizing that some practices may need time to adjust their staffing models and workflows, CMS has provided a two-year transition period “to allow for practices to hire and train staff for in-house workflows.” These requirements will take effect on January 1, 2029.

CMS also emphasized the importance of appropriate clinical oversight and integration of RTM services into patient care. The agency clarified that RTM services should involve meaningful engagement by the billing practitioner and that services lacking sufficient oversight or clinical integration may not meet the requirements for billing.

CMS states:

“… we believe outsourcing RPM/RTM services to a third party can fragment care, lead to insufficient involvement and oversight of the billing practitioner, or result in services that do not actually represent or facilitate all required aspects of RPM or RTM services. Provision of these services by entities having only a loose association with the treating practitioner can detract from longitudinal, patient-centered care. We do not believe that RPM or RTM services provided by clinical staff contracted by a third party can ensure the billing practitioner has adequate oversight, management, or collaboration to bill RPM or RTM services. [...] If there is little oversight by the billing practitioner or a lack of clinical integration between a third party and the billing practitioner, we do not believe the criteria for billing remote monitoring services are actually being met and therefore, the practitioner should not bill for remote monitoring services in those instances.” (pg. 291)

CMS also distinguishes between third-party staffing arrangements and technology vendors like Medbridge, which provide the platforms and tools that enable RTM services. Technology platforms remain an essential component of RTM, supporting patient monitoring, engagement, and documentation.

For organizations currently leveraging third-party staffing to support RTM, these changes present an opportunity to evaluate existing workflows, staffing arrangements, and clinical oversight. Regardless of the staffing model, it is important that the treating clinician remains at the center of patient care, with appropriate visibility into patient progress, meaningful involvement in treatment decisions, and clear coordination across the care team.

We encourage organizations to work with their legal and compliance teams to understand the implications of the final rule and determine the best path forward for their RTM programs.

At Medbridge, we believe successful RTM programs are built around the treating clinician and supported by technology and services that make ongoing patient engagement more accessible and efficient. Our platform-first approach to RTM is designed to support a range of clinical workflows and staffing models, while keeping the clinician connected to the patient's care throughout the episode.

+2 years for traditional MIPS

Practices and providers reporting traditional MIPS can breathe a sigh of relief. CMS extended traditional MIPS another two years beyond the proposed date, sunsetting at the end of the 2030 performance year, with MVP-only reporting beginning in the 2031 performance period.

The MIPS performance threshold stays at 75 points for 2027. The big change for therapists is the measure inventory. CMS removed the functional status change measures (Q217 through Q222 and Q478) and replaced them with five functional improvement measures.

The Rehabilitative Support for Musculoskeletal Care MVP is now the Rehabilitative Support MVP, and starting in 2027, eligible clinicians must report at least one MIPS core measure or attest that none applies; small practices are exempt. CMS also removed IA_BE_15, the improvement activity for engaging patients, families, and caregivers in the plan of care, and folded it into IA_CC_9.

Through our partnership with Patient360, a CMS-approved QCDR specializing in physical medicine and rehabilitation, Medbridge submits MIPS quality data directly from the patient-reported outcomes clinicians already capture in the platform. Reporting through the partnership begins with the 2027 performance year.

For more information on the CY 2027 physician fee schedule final rule, you should check out the factsheet, press release, and the rule at the federal register.