The 2027 Medicare Physician Fee Schedule Proposed Rule Explained

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2027 Medicare Physician Fee Schedule (PFS) proposed rule, filed as CMS-1848-P. The proposed rule sets out how Medicare would pay physicians and other practitioners under Medicare Part B beginning January 1, 2027, if finalized.

It touches nearly every part of Medicare payment policy, from the annual conversion factor to remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM). For healthcare organizations that operate RPM and Chronic Care Management (CCM) technologies, several proposed provisions are directly relevant to day-to-day billing and program design.

Below is a summary of what CMS proposed, why, and what happens next.

CMS Released the 2027 Physician Fee Schedule Proposed Rule in July 2026

Since 1992, Medicare has paid physicians and other billing professionals under the Physician Fee Schedule (PFS) for services delivered in physician offices, hospital outpatient departments, and other settings. Each year, CMS proposes updates to this payment system through notice-and-comment rulemaking.

CMS describes the CY 2027 proposed rule as part of a broader administration-wide effort to shift Medicare toward outcomes and efficiency rather than volume of services. The rule covers Medicare Part B payment policy, the Medicare Shared Savings Program for Accountable Care Organizations (ACOs), and the Quality Payment Program (QPP), among other topics.

If finalized, most provisions would take effect January 1, 2027. Before that happens, CMS is accepting public comments, and the proposed policies described in this article could change in the final rule.

The Proposed Rule Would Lower the 2027 Medicare Conversion Factor

Medicare payment rates under the PFS are calculated by applying a conversion factor, a dollar amount, to the relative value units (RVUs) assigned to each service. For CY 2027, CMS proposed two separate conversion factors, as required by statute.

One conversion factor applies to clinicians who qualify as participants in Advanced Alternative Payment Models (APMs); the other applies to clinicians who do not.

These proposed reductions reflect a one-year, 2.5 percent conversion factor increase under the Working Families Tax Cut legislation that expires at the end of 2026. That expiration is only partly offset by a smaller statutory update and an adjustment tied to proposed changes in work RVUs.

Practices that operate RPM, RTM, or CCM programs billed under the PFS would feel the effect of this broader conversion factor change alongside the monitoring-specific proposals described below.

Remote Monitoring Services Would Face New Program Integrity Requirements

CMS proposed a significant set of changes to remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM). These are the two Medicare code families that cover the collection, analysis, and clinical use of patient-generated physiologic and therapy data.

According to CMS, these proposals respond to two 2024 reports from the U.S. Department of Health and Human Services Office of Inspector General (OIG). In its own words, OIG found that “the use of remote patient monitoring in Medicare increased dramatically from 2019 to 2022,” and that some services were billed for patients who did not receive all required components.

Three proposed changes stand out for practices that offer these services:

An Initiating Visit Would Be Required Before RPM or RTM Begins

CMS proposed that practitioners furnish a separately billable initiating visit before starting RPM or RTM for a patient. During this visit, the billing practitioner would need to discuss monitoring with the patient, confirm it is clinically appropriate, and obtain the patient’s consent.

A visit that does not include this discussion could not count as the initiating visit. Encounters that are not separately payable under Medicare, or that do not involve a face-to-face encounter with the billing practitioner, would not qualify either.

CMS designed this proposal to confirm that a billing practitioner has personally evaluated the patient before monitoring begins, addressing OIG’s finding that some monitoring relationships began without adequate practitioner involvement.

RTM Services Would Be Limited to Established Patients

RPM already requires an established patient relationship, meaning the billing practitioner has previously examined and diagnosed the patient. CMS proposed extending this same requirement to RTM.

Under the proposal, a practitioner could not bill RTM for a patient with no prior relationship to the practice. This closes a gap that OIG identified when some remote monitoring companies billed for patients they had not previously treated.

CMS reasons that an established relationship gives the practitioner the clinical history needed to determine whether ongoing monitoring is appropriate for that patient.

RPM and RTM Would Need to Be Furnished by Practice-Employed Staff

CMS also proposed to allow payment for RPM and RTM only when the clinical staff performing the service are direct employees of the billing practice, rather than staff supplied by an outside vendor under contract. In the agency’s own language, payment would apply only when services are performed by clinical staff “employed by the practice and not when those services are delivered by contractors.”

CMS explained that outsourced monitoring arrangements can separate the billing practitioner from the day-to-day delivery of the service. This structure can also make it harder for CMS and OIG to identify who is actually performing the monitoring.

Separately, CMS is seeking comment on consolidating the current RPM and RTM CPT codes into new HCPCS G-codes, and on updating how these services are valued to reflect device costs that CMS believes are now lower than its original estimates.

None of these proposals are final. CMS is asking for public comment on each before deciding how to proceed.

New Codes Would Support Longitudinal and Preventive Chronic Care

Several other CY 2027 proposals focus on chronic disease and preventive care, an area CMS has flagged as a top priority given how widespread chronic conditions are among Medicare beneficiaries:

• E/M complexity add-on (G2211): CMS proposed changing this code from a flat payment into a percentage-based modifier that would increase payment for the associated office visit by 16 percent.
• ACO longitudinal care modifier: a second, related modifier would be available only to clinicians in a Shared Savings Program ACO or the Long-term Enhanced ACO Design (LEAD) Model, increasing payment by 32 percent for the added work of coordinating care over time.
• Behavioral health: CMS proposed completing a four-year transition that increases payment for smoking and tobacco cessation counseling and for screening, brief intervention, and referral to treatment (SBIRT) services.
• Advance care planning (ACP): two new codes would separate ACP work performed by clinical staff under a physician’s direct supervision from time the billing practitioner spends personally with the patient.
• Shared medical appointments: because no current code describes this group-visit format, CMS proposed creating one for patients with similar chronic conditions.

Combined, these proposals point toward a payment system that increasingly recognizes coordination and non-visit care, the same kind of work that RPM and CCM programs are designed to support.

Rural Health Clinics and Federally Qualified Health Centers Would Gain New Flexibilities

CMS proposed several changes specific to Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs):

• Diabetes Self-Management Training (DSMT) and Medical Nutrition Therapy (MNT) would become separately billable, all-inclusive-rate visits under the RHC benefit, matching how FQHCs and physician offices are already paid for these services.
• Mental health visits delivered by RHCs and FQHCs would keep their waiver of the in-person visit requirement through December 31, 2027, under the Consolidated Appropriations Act, 2026.
• RHCs’ and FQHCs’ authority to bill for non-behavioral health visits delivered by telecommunications technology would also extend through December 31, 2027.

CMS frames these proposals as a way to expand access to preventive and behavioral health services in areas that already face provider shortages.

For practices operating under a Rural Health Transformation Program (RHTP) grant, or planning an RPM program in an RHC or FQHC setting, these proposed billing changes are worth watching alongside RHTP-funded initiatives.

The Public Comment Period Closes on September 14, 2026

CMS opened a 60-day public comment period when it published the CY 2027 PFS proposed rule, and that window closes on September 14, 2026. Comments can be submitted through regulations.gov using file code CMS-1848-P.

CMS reviews public comments before publishing a final rule, typically in the fall. The final rule may adopt, modify, or drop any of the provisions described above.

Healthcare organizations that operate RPM, RTM, or CCM programs, particularly those that currently rely on outside vendors for monitoring staff, may want to review the proposed rule in full and consider submitting comments before the deadline.

How DrKumo Supports Providers Navigating Medicare Policy Changes

For practices that already operate Remote Patient Monitoring (RPM) programs, the proposed initiating-visit, established-patient, and employed-staff requirements described above are primarily workflow and staffing questions, not reasons to pause a program.

DrKumo provides the secure, HIPAA-compliant technology infrastructure, including connected medical devices and a provider-facing data platform, that a practice’s own clinical staff use to collect, review, and act on physiologic data. DrKumo is not a clinical entity, does not employ clinical staff on behalf of a billing practice, and does not make monitoring or billing decisions; those responsibilities remain with the practice and its licensed providers.

The same proposed rule also touches Chronic Care Management (CCM) indirectly, through new coding for longitudinal and preventive care. It also proposes new flexibilities for Rural Health Clinics and Federally Qualified Health Centers that build on the Rural Health Transformation Program funding already reaching many rural practices.

DrKumo supports healthcare organizations building or scaling RPM and CCM technologies in these settings with configurable device kits designed around current CMS billing requirements. Practices weighing how these proposed changes intersect with related policy, such as the CMS ACCESS Model or the proposed elimination of the CCM copay under H.R.8261, can find additional context in DrKumo’s related coverage of those topics.

Key Takeaways for Healthcare Providers

CMS’s CY 2027 Physician Fee Schedule proposed rule is not final, but it signals clear direction on several fronts:

• A lower 2027 conversion factor
• Tighter program integrity requirements for RPM and RTM
• New coding for longitudinal chronic care
• Expanded flexibilities for rural health clinics and FQHCs

Practices that operate remote monitoring or chronic care programs should review the initiating-visit, established-patient, and staffing proposals closely, since these would directly affect how monitoring services are delivered and billed if finalized. The comment period runs through September 14, 2026, giving healthcare organizations a window to weigh in before CMS issues a final rule.

DrKumo is a digital health technology company, not a clinical entity, and does not provide clinical services, make coverage determinations, or replace a licensed provider’s clinical judgment. Remote patient monitoring is intended to support, not substitute for, in-person or emergency medical care.

Frequently Asked Questions About the 2027 Physician Fee Schedule Proposed Rule

Questions about the CY 2027 PFS proposed rule and what it means for RPM, RTM, and CCM programs. Tap a question to expand the answer.

References

Centers for Medicare & Medicaid Services. (2026). Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule. CMS.gov.

Centers for Medicare & Medicaid Services. (2026). CY 2027 PFS Proposed Rule, Medicare Shared Savings Program Proposals. CMS.gov.

U.S. Department of Health and Human Services, Office of Inspector General. (2024). Additional Oversight of Remote Patient Monitoring in Medicare Is Needed. OIG.HHS.gov.

Regulations.gov. (2026). Public comment docket, file code CMS-1848-P. Regulations.gov.