Briefing · October 20, 2026

Medicare's 2027 conversion factor falls while psychotherapy codes rise

CMS proposed a CY2027 conversion factor of $32.84 for clinicians outside an advanced alternative payment model, down 1.68% from $33.40, in proposed rule CMS-1848-P, displayed July 14 and published in the Federal Register July 16, 2026. Psychotherapy pays more anyway. 2027 is the fourth and final year of the 19.1% increase to psychotherapy work RVUs that CMS finalized in the CY2024 rule, and for a 60-minute session (90837) the two changes together give a proposed national amount of $184.89, about 10.7% above the 2026 figure of $167.00. The final rule is not published yet. As of October 20, 2026, CMS's own regulation notices index lists only CMS-1848-P for calendar year 2027. Every number below is a proposal.

What CMS proposed

The CMS fact sheet gives two conversion factors for 2027, because the law has split them since 2026:

Most clinicians in independent practice fall in the second row. CMS attributes the decline to the end of a one-year increase: Public Law 119-21 raised the 2026 conversion factor by 2.50% for that year only, and the statutory update for 2027 is +0.25% for the non-qualifying factor.

Why psychotherapy moves the other way

In the CY2024 final rule, CMS adopted a 19.1% increase to the work RVUs for the standalone psychotherapy codes and transitioned it over four years, as recorded in the Federal Register notice for that rule. CMS applied the same adjustment to the psychotherapy add-on codes billed with an evaluation and management visit, 90833, 90836 and 90838, and to the health behavior assessment and intervention codes. Its stated reason was that the work in these services had been undervalued.

2027 is the last year of that four-year ramp. The CMS fact sheet for 2027 refers to the transition's final year directly, in proposing to add smoking and tobacco use cessation and SBIRT services to it. So two forces land on a psychotherapy code at once in 2027: the conversion factor falls 1.68%, and the work RVU takes its final step up. For 90837 the second is larger. The total RVU goes from 5.00 to a proposed 5.63, a 12.6% increase, which nets out to about +10.7% in dollars.

A clinician who bills only psychotherapy codes is therefore looking at an increase in 2027 while most of medicine takes a cut. That is a reversal of the pattern of the last several years, and it holds only if the final rule keeps the proposed values.

One code in the set shows the mechanism

The proposed amounts split along a single line: whether the code is a psychotherapy code. 90791 is the diagnostic evaluation, not psychotherapy, so it sits outside the CY2024 adjustment and falls with the conversion factor. Every psychotherapy code in the same set rises.

National non-facility amounts at 100%, from the Medicare guide, which carries the same figures at 75% and the full method. A clinician who bills an intake and then a course of 60-minute sessions sees the two move in opposite directions in 2027, as proposed.

What 90837 works out to, by license

Medicare pays the same fee schedule amount per code and then applies a percentage that depends on who billed it. Clinical psychologists are paid the full amount. Nurse practitioners and physician assistants are paid 85% of the physician amount. Clinical social workers, marriage and family therapists and mental health counselors are paid 75% of the amount determined for clinical psychologist services, under 42 CFR 414.53; CMS states the 75% figure for marriage and family therapists and mental health counselors on its own page for those professions, who have billed Medicare independently since January 1, 2024. The two baselines are written differently in regulation and land on the same per-code amount for these services.

National non-facility amounts, calculated by this site. The 2026 column is the CY2026 total non-facility RVU for 90837 (5.00) times the $33.4009 conversion factor. The 2027 column applies the proposed $32.8409 factor to the proposed RVU and then the statutory percentage. Every amount is adjusted by geographic practice cost indices in a real locality, so your own figure differs; the CMS lookup gives the amount for your ZIP. Patients owe 20% coinsurance after the Part B deductible on top of these amounts. Full method and the other therapy codes: the Medicare guide.

What this means if you prescribe

A psychiatrist or psychiatric nurse practitioner billing an evaluation and management visit with a psychotherapy add-on sits on both sides of this at once. The add-on codes 90833, 90836 and 90838 are inside the 19.1% transition, so their work RVUs take the same final step up in 2027. The office visit codes are not, so the 99213, 99214 and 99215 portion of the same encounter moves with the conversion factor and with whatever the final rule does to practice expense.

The direction of a 99214 plus 90833 encounter in 2027 therefore depends on the mix: the add-on rises and the visit falls, and which dominates depends on the final RVUs for both. This site holds no reported rates for either code yet. The form accepts them, and the psychiatric nurse practitioner page and psychiatrist page are where those reports will land.

What is still unsettled

Three things in the proposed rule could move the numbers above before January.

• The final rule itself, which is due within weeks. CMS has not published it, and the proposed values routinely change between the two rules. The regulation notices index dates the last two: the CY2026 final rule (CMS-1832-F) displayed October 31, 2025 and published November 5, and the CY2025 final rule (CMS-1807-F) displayed November 1, 2024. On that pattern the CY2027 final rule, CMS-1848-F, is due around the end of October 2026.
• Practice expense methodology. CMS proposed phasing out part of the method that holds specialty-level practice expense RVUs to cost data from 2007 or earlier, replacing it with what the fact sheet calls a "PE stabilizer," and moving away from AMA survey data toward more auditable cost data. Practice expense is 1.20 of 90837's 5.00 RVUs, so a change there reaches psychotherapy directly.
• The two conversion factors. Both are proposals, and the gap between them means the answer to "what does Medicare pay" now depends on whether a clinician is in an advanced alternative payment model.

One item is already settled for 2027 and worth noting: CMS proposed that the in-person requirements for mental health visits at rural health clinics and federally qualified health centers not apply through December 31, 2027.

How to read this briefing

This briefing has three limitations. First, every 2027 figure is from a proposed rule and none of it is final; a reader deciding whether to stay on a Medicare panel should wait for the final rule or check the CMS lookup after it publishes. Second, the dollar amounts are this site's calculations from CMS files rather than figures CMS published per code, and they are national amounts, so a locality adjustment will move every one of them. Third, the year-by-year increments of the four-year psychotherapy transition are not broken out in the sources cited here, so the 10.7% figure for 90837 rests on the proposed RVU rather than on a published schedule of the ramp. Nevertheless, the direction is documented in CMS's own fact sheet and the CY2024 Federal Register notice, and it is unusual enough to plan around: in 2027, as proposed, psychotherapy is scheduled to pay more while the conversion factor pays less.

Every regulatory statement cites CMS or the Federal Register. Dollar calculations are this site's and are labelled where they appear. This briefing will be updated when the final rule publishes. Corrections via the form.