What the 2027 Medicare fee schedule pays your PT practice

CMS wants to pay $32.84 per relative value unit next year, 56 cents less than it pays today. That figure has been making the rounds since the agency released its proposed 2027 Physician Fee Schedule on July 14. On its own it reads like one more year of shrinking Medicare checks. The full rule tells a more interesting story for physical therapy, and it hands you a deadline: comments close September 14.

What changes on January 1, 2027?

CMS proposes a conversion factor of $32.84 for most clinicians, including physical therapists, a 1.68% cut from this year’s $33.40. The cut is not a judgment on therapy; it is Congress. Lawmakers gave the fee schedule a one-year 2.5% raise for 2026, and that raise expires on December 31. Practices in a qualifying alternative payment model get $33.17 instead, though almost no outpatient PT practice qualifies.

The KX modifier threshold would rise to $2,540 for PT and speech-language pathology combined, $60 above this year’s $2,480, with the same figure for OT. The targeted medical review threshold stays at $3,000 through 2028. The mechanics do not change: once a patient’s therapy charges cross the threshold, every later claim that year carries the KX modifier and the chart has to back it up.

What does the cut actually cost per visit?

Worst case, the proposed cut takes 1.68% of every Medicare allowed amount, which is less than the headline suggests. At a $95 average allowed amount that is about $1.60 a visit. A practice running 120 Medicare visits a month would give up roughly $190 a month, call it $2,300 a year, if nothing else in the rule moved. Swap in your own averages, because those two numbers are placeholders, not benchmarks.

Something else does move. CMS is rewriting how it calculates the practice expense half of every payment, phasing out a step still anchored to specialty survey data from 2007 or earlier. APTA’s read of the rule is that the RVU changes push physical therapy codes up 1% to 3% overall, and that the practice expense overhaul is the reason. Stack that against the 1.68% conversion factor cut and the net for a typical outpatient code mix lands somewhere between a small loss and a small gain.

Which side you land on depends on the codes that carry your billing. Pull your ten highest-charge CPT codes for the last twelve months and hold that list until CMS publishes final RVUs this fall. That one report turns the final rule from a news item into a repricing exercise you finish in an afternoon.

If you bill RTM, check your vendor contract

The sharpest edge in the rule is aimed at remote therapeutic monitoring. CMS proposes to pay for RTM only when the monitoring is done by clinical staff your practice employs. If a third-party vendor’s staff handle the monthly check-ins under your NPI, that revenue stops in January if CMS finalizes the proposal. CMS would also restrict RTM to established patients and require an initiating visit before monitoring starts. Several RTM codes get their values cut too, because the devices turned out cheaper than the agency first assumed. If RTM is anywhere in your 2027 budget, reread the vendor contract this month, not in January.

What to do before September 14

Comment, with your own numbers in it. CMS accepts comments through September 14, 2026, at regulations.gov under file code CMS-1848-P. A paragraph that says “a 1.68% cut costs our six-provider clinic $X against a rent increase of $Y” outweighs a hundred form letters, and ten minutes covers it.

Then check whether your reporting can even feed that paragraph. Payer mix, average allowed per visit, top codes by charge volume: if pulling those takes an export and a spreadsheet, the fee schedule is not your biggest margin problem. Orion’s reporting keeps all three one screen away, which matters most in years like this one. The other lever worth pulling while payment sits flat is cost per visit, and for most owners the biggest line on it is still documentation time.

Hold off on repricing anything. This is a proposal, the final version lands this fall, and numbers move between draft and final. What you can bank today is the shape of the year: 2027 is a draft where the RVU side finally pushes in PT’s favor. Whether it pushes hard enough for your practice is a question your own reports answer better than any summary, including this one.