Is Medicare paying psychiatrists more or less? More in 2026, likely a little less in 2027. The 2026 Physician Fee Schedule raised the conversion factor about 3.3% and spared psychiatry from a new efficiency cut. The 2027 proposal, released in July 2026, lowers the conversion factor about 1.7% because a one-year 2.5% bump from the 2025 reconciliation law expires.
2026: what is in effect now
- Two conversion factors. Starting in 2026, Medicare pays on two scales: $33.4009 for most clinicians (+3.26%) and $33.5675 for qualifying participants in advanced alternative payment models (+3.77%). Most solo and small-group psychiatry practices are on the first.
- The efficiency adjustment skips psychiatry. CMS cut work RVUs by 2.5% for most non-time-based services. Time-based codes are exempt, which covers office E/M visits, psychotherapy, behavioral health services, care management, and everything on the Medicare telehealth list. Psychiatry is among the specialties CMS and the AMA identified as avoiding the cut.
- Behavioral health add-ons to APCM. New G-codes let practices billing Advanced Primary Care Management add behavioral health integration or psychiatric collaborative care in the same month.
- Psychotherapy uplift continues. The four-year phase-in of higher work RVUs for timed psychotherapy codes, started in 2024, is in its third year.
2027: what CMS has proposed
- Lower conversion factors. $32.8409 for most clinicians (−1.68%) and $33.1693 for qualifying APM participants (−1.19%). The statutory updates are +0.25% and +0.75%, plus a +0.53% budget-neutrality adjustment, but the expiring 2.5% bump outweighs them.
- Higher collaborative care values. CMS proposes raising work RVUs for 99492 from 1.88 to 2.75, 99493 from 2.05 to 2.26, 99494 from 0.82 to 1.13, and G2214 from 0.77 to 1.13, with matching changes to the APCM collaborative care add-ons.
- Final year of the timed behavioral health transition. CMS proposes adding smoking cessation and SBIRT codes to the uplift in its last year.
- New telehealth modifiers. Proposed modifier BB for services furnished through certain virtual platforms, and BC for telehealth furnished incident to another practitioner's service. The APA has asked CMS to define which arrangements need them, especially for psychiatrists contracted with digital mental health companies.
- Telehealth conformance. CMS proposes regulatory text implementing the extension of tele-mental health flexibilities through December 31, 2027.
What it means for a typical outpatient psychiatry practice
If most of your Medicare revenue comes from 99214 and 99215 with psychotherapy add-ons, your rates moved up in 2026 and will move down modestly in 2027 if the proposal is finalized. Psychiatry is relatively well positioned because its core codes are time-based and exempt from the efficiency adjustment.
Collaborative care is the bigger opportunity. If you consult for primary care practices, or run CoCM yourself, the proposed 2027 values make it meaningfully better paid. Worth modeling now:
- How many patients a month would meet the collaborative care criteria in your referral base.
- Whether you have a behavioral health care manager, or would contract for one.
- Whether your partner primary care practices already bill APCM, which unlocks the add-on codes.
Commercial rates follow Medicare
Many commercial contracts are written as a percentage of the Medicare fee schedule. A 1.7% Medicare reduction flows into those contracts automatically unless your contract fixes the base year. Review your payer contracts this fall for which fee schedule year each one references, and raise it at your next renegotiation.
Timeline
- July 16, 2026: 2027 proposed rule published in the Federal Register.
- September 2026: Comment period closed.
- Early November 2026: Final rule expected.
- January 1, 2027: New rates take effect.