What Are the 2027 Medicare Telehealth Rules for Psychiatry Billing?
As of July 2026, the CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P) implements the Consolidated Appropriations Act 2026 extension that delays the in-person visit requirement for mental health telehealth services through December 31, 2027. This means psychiatry practices can continue billing Medicare for telehealth sessions without requiring patients to complete an in-person visit first, but only through the end of 2027. Starting January 1, 2028, new patients will need an in-person visit within six months before their first telehealth session.
- Waiver extended, not eliminated: The in-person requirement for mental health telehealth is delayed through December 31, 2027. It returns January 1, 2028 for new patients, with an annual in-person visit required for all telehealth patients going forward.
- Psychotherapy payments increase: CMS proposes the final year of a four-year upward adjustment to RVUs for timed behavioral health psychotherapy codes, partially offsetting the overall conversion factor cut.
- Grandfathering matters now: Patients established on telehealth before January 1, 2028 are considered established and only need an annual in-person visit afterward, not the initial six-month pre-visit requirement.
What CMS Proposed on July 14, 2026
On July 14, 2026, the Centers for Medicare & Medicaid Services published the CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P). For psychiatry and behavioral health, the proposed rule contains two provisions that directly affect how practices bill and what they collect.
First, CMS proposes implementing the Consolidated Appropriations Act 2026, Section 6209(c), which extends the waiver on in-person visit requirements for mental health telehealth services through December 31, 2027. This is a statutory extension, meaning it is already law. CMS is formalizing it in the proposed rule for operational clarity. Audio-only visits remain covered. Geographic and originating site restrictions remain waived. Patients can continue receiving telepsychiatry from home.
Second, CMS proposes the final year of a four-year phase-in of increased relative value units for timed behavioral health psychotherapy codes. This adjustment increases the practice expense component for codes like 90834 and 90837, which are the most commonly billed outpatient therapy codes in psychiatry.
The overall conversion factor would drop by 1.19% for qualifying APM participants (to $33.1693) and 1.68% for non-qualifying practitioners (to $32.8409). For psychiatry practices, the psychotherapy RVU increase partially offsets this conversion factor reduction, but the net effect varies by code and payer mix.
Which Psychiatry Practices Are Affected?
Every psychiatric practice that bills Medicare for telehealth services is affected by the waiver extension and the upcoming 2028 deadline. The impact is proportional to how much of a practice’s patient panel receives care via telehealth.
Solo psychiatrists and small group practices with high telehealth volumes face the most operational risk when the waiver expires. If a practice has been seeing Medicare patients exclusively via telehealth since the pandemic flexibilities began, many of those patients may never have had a qualifying in-person visit. Those patients are protected under the grandfathering provision through 2027, but any new patient after January 1, 2028 will need to complete an in-person visit within six months before their first telehealth session.
Providers who come to us for billing help often discover they have no system for tracking which patients have completed their in-person visit requirement. For a panel of 150 telehealth patients, that means monitoring 150 separate compliance timelines. Miss one, and the telehealth claim gets denied.
Licensed marriage and family therapists and licensed professional counselors who became Medicare-eligible in January 2024 are particularly exposed. Many of them credentialed under the waiver period and have never operated under the in-person requirement. Their entire Medicare patient base exists in a telehealth-only model that changes in 2028.
Why the Telehealth Extension Matters for Revenue
Across the psychiatry practices we work with, telehealth now accounts for a significant share of billable Medicare visits. Behavioral health services saw some of the highest telehealth adoption rates of any specialty during and after the pandemic, and that pattern has held. The extension through 2027 preserves this revenue stream without disruption for another full calendar year.
But the billing complexity increases as the 2028 deadline approaches. Practices need to distinguish between established and new telehealth patients for Medicare purposes. Claims submitted with Modifier 95 (synchronous telehealth) or Modifier 93 (audio-only) must align with the documentation requirements specific to each visit type. A practice that fails to document the telehealth modality correctly risks denials regardless of the waiver status.
Behavioral health claims already face denial rates of 15% to 25%, well above the 5% to 10% average for general medical specialties, according to industry benchmarking data from 2026. Telehealth claims add another layer of denial risk through modifier errors, missing place-of-service codes, and payer-specific carve-out rules that differ between medical and behavioral health benefits. For practices that need a full review of their psychiatry CPT code usage, aligning coding with the current telehealth rules is the first step toward reducing preventable denials.
What Does the Psychotherapy Payment Increase Mean in Dollars?
The CY 2027 proposed rule completes a four-year upward adjustment to relative value units for timed behavioral health psychotherapy codes. This increases the practice expense RVU for codes like 90832, 90834, and 90837, which directly affects the Medicare allowed amount.
However, the conversion factor reduction offsets part of this gain. A practice billing 90834 at the current 2026 rate will see the RVU increase partially canceled by the lower conversion factor. The net change for most psychotherapy codes will be modest, likely in the range of a few dollars per session in either direction depending on the final RVU values CMS publishes.
For a solo psychiatrist seeing 25 Medicare therapy patients per week at an average of 90834, even a $2 net change per session compounds to roughly $2,600 per year. For a group practice with five clinicians, the annual impact exceeds $13,000. These are not dramatic shifts, but they directly affect margin in a specialty where denial rates already consume 15% to 25% of billed revenue.
The interaction between the psychotherapy adjustment and the conversion factor cut means billing accuracy matters more than ever. Undercoding a 53-minute session as 90834 instead of 90837 leaves a larger dollar gap in 2027 than it did in 2026, because the RVU difference between the two codes has widened. Practices that routinely track session times and code correctly will capture revenue that practices relying on default codes will miss. For details on how session duration drives code selection for the most commonly billed therapy code, see our CPT 90887 billing guide.
How to Prepare Your Practice Before 2028
The telehealth waiver runs through December 31, 2027, which gives practices 17 months from this proposed rule to prepare for the in-person requirement. The following steps apply to every psychiatry practice billing Medicare for telehealth:
- Audit your Medicare telehealth panel now. Identify every active Medicare patient currently receiving services exclusively via telehealth. These patients are grandfathered as established through 2027 but will need at least one in-person visit per year starting in 2028.
- Schedule in-person visits for high-risk patients in Q3 and Q4 of 2027. Patients who have never been seen in person should be scheduled for an in-person visit before December 31, 2027, to satisfy the grandfathering window and establish the annual in-person cadence.
- Build a tracking system for in-person visit compliance. Each Medicare telehealth patient will need an in-person visit within 12 months of their last one. Without automated alerts, missed deadlines will produce denied claims.
- Verify your telehealth modifier usage on every claim. Modifier 95 for synchronous audio-video, Modifier 93 for audio-only, and Place of Service code 10 for telehealth from the patient’s home must be applied correctly. Errors on any of these fields trigger denials.
- Review your payer mix for carve-out risks. Some commercial plans route behavioral health through a separate carve-out administrator with different telehealth policies than the medical benefit. Verify telehealth coverage and modifier requirements payer by payer.
- Update your new-patient intake workflow for 2028. Starting January 1, 2028, new Medicare patients must have an in-person visit within six months before their first telehealth session. Your intake process needs to account for this requirement before scheduling.
If your psychiatry practice bills Medicare telehealth and you are not sure whether your billing company is tracking modifier compliance, in-person visit timelines, and the psychotherapy code adjustments, now is the time to get a second opinion. We match psychiatry practices with billing companies that specialize in behavioral health coding and telehealth claims.
Common Billing Mistakes During Telehealth Transitions
One pattern we see consistently among psychiatry practices is treating the telehealth waiver as if the in-person requirement does not exist. It does. It is codified in Section 1834(m) of the Social Security Act. Congress has delayed its enforcement multiple times, but the underlying statute has never changed. Practices that build their entire scheduling and billing workflow around telehealth-only access are creating a compliance gap that will become a revenue gap on January 1, 2028.
- Failing to document the modality. Every telehealth session note must specify whether the visit was audio-video or audio-only. If the note is silent on modality, auditors default to assuming an in-person visit occurred, which conflicts with the telehealth modifier on the claim. That mismatch is an audit trigger.
- Using the wrong place-of-service code. POS 10 (telehealth provided in patient’s home) became effective in 2022 but some practices still default to POS 02 (telehealth) or even POS 11 (office). The wrong POS code changes the allowed amount and can trigger a denial or a recoupment.
- Ignoring payer-specific audio-only restrictions. Medicare covers audio-only mental health visits, but many commercial payers do not, or they reimburse at a lower rate. Billing audio-only with Modifier 93 to a payer that does not recognize it produces a denial that looks like a coding error but is actually a coverage gap.
For a deeper look at how documentation and modifier errors affect specific psychiatry codes, our revenue cycle management guide walks through the end-to-end claims process for behavioral health.
Before and After: 2027 vs. 2028 Billing Rules
The table below summarizes the key differences between the current waiver period and what takes effect when it expires.
| Billing Element | Through December 31, 2027 | Starting January 1, 2028 |
| In-person visit for new patients | Not required | Required within 6 months before first telehealth session |
| In-person visit for established patients | Not required | Required at least once every 12 months |
| Audio-only visits (Medicare) | Covered at parity with video | Covered at parity with video (extended separately) |
| Geographic restrictions | Waived; patient can be anywhere | Waived through 2027; check for further extension |
| Originating site requirement | Waived; home qualifies | Waived through 2027; check for further extension |
| Grandfathering | Not applicable | Patients established before Jan 1, 2028 exempt from 6-month pre-visit rule |
| Telehealth modifiers | Modifier 95 (video), Modifier 93 (audio-only), POS 10 | Same modifiers; documentation of in-person compliance required |
The practical difference for billing is that 2028 claims will need to demonstrate the in-person visit was completed within the required window. Without that documentation in the patient record, a payer can retroactively deny every telehealth claim submitted after the compliance deadline.
Frequently Asked Questions
The CAA 2026 telehealth extension applies specifically to Medicare. Commercial payers set their own telehealth policies independently. Some have adopted similar flexibilities, but many behavioral health carve-out plans impose stricter limits on telehealth coverage, audio-only visits, and session frequency. Verify telehealth rules for each payer individually.
Yes. Audio-only telehealth for mental health services remains covered under Medicare through 2027 at the same rate as audio-video visits. Use Modifier 93 to identify audio-only claims. Document in the session note that the visit was conducted via audio-only and the clinical reason the patient did not use video, as some Medicare Administrative Contractors request this.
If an established Medicare telehealth patient does not complete the required annual in-person visit after December 31, 2027, subsequent telehealth claims are subject to denial. The patient must complete an in-person visit to reset the 12-month compliance clock before telehealth services can be billed again.
Both, depending on how you measure it. CMS proposes higher RVUs for timed psychotherapy codes in the final year of a four-year phase-in, but the overall conversion factor drops 1.19% to 1.68%. The net effect for most psychotherapy codes is a modest change in either direction, but practices that undercode sessions will lose more revenue than in prior years.
Yes. Licensed marriage and family therapists and licensed professional counselors became Medicare-eligible in January 2024, entirely within the waiver period. Many have never operated under an in-person requirement. Their entire Medicare patient base may need in-person visits scheduled before January 1, 2028, to satisfy grandfathering rules.
Use Modifier 95 for synchronous audio-video visits and Modifier 93 for audio-only visits. Pair either modifier with Place of Service code 10 when the patient is at home. Verify that your EHR templates automatically populate these fields, because manual entry is a leading source of modifier errors on behavioral health claims.
Next Steps
- Review your current Medicare telehealth patient panel and identify which patients have never been seen in person.
- Explore our psychiatry CPT code billing guide to confirm your coding aligns with the 2027 telehealth modifier requirements.
- If your billing company is not tracking telehealth compliance timelines for your practice, request a free quote to compare specialized psychiatry billing partners.
The telehealth waiver gives your practice one more year of billing flexibility, but the preparation for 2028 starts now. If your current billing partner is not proactively managing modifier compliance, in-person visit tracking, and psychotherapy code optimization, we can connect you with one that does. Every quote is free, and we match you within 30 minutes.
