Six days after CMS released the calendar year 2027 Physician Fee Schedule proposed rule on July 14, 2026, most of the conversation in the practices we work with is still about the conversion factor and the G2211 modifier, not the CY 2027 telehealth proposals. Those matter, and we covered them last week. But a practice administrator in a behavioral health group asked us a better question on Friday: "What in this rule changes what my billers type on a claim?" The answer is in the sections that got less coverage, and it is mostly telehealth, quality reporting and the mechanics of practice expense.
So this is a second read of the rule, focused on the CY 2027 telehealth proposals, the two new claim modifiers, the Quality Payment Program changes, and the practice expense stabilizer that will quietly reshape relative payments across specialties for years. Comments are due September 14, 2026, and several of these items are worth a paragraph from a practicing clinician.
As with everything in a proposed rule, none of this is final. Where we describe an effect on your workflow, read it as "if finalized as proposed."
Key takeaways
- CMS proposes to carry out the Consolidated Appropriations Act, 2026 telehealth extensions: geographic and originating site waivers, the expanded practitioner list and audio-only coverage through December 31, 2027, with the in-person visit requirement for mental health telehealth delayed to January 1, 2028.
- Two new informational modifiers, BB and BC, would be required from January 1, 2027 on telehealth claims where the billing practitioner contracts with or has a payment arrangement with the company that owns the virtual platform, or where the telehealth service is furnished incident to a physician's service; they do not change payment.
- The Quality Payment Program section proposes holding the MIPS performance threshold steady through the 2028 performance year, adding three MIPS Value Pathways for 2027 (Diabetic Disease, Hypertension and Hospitalist), and sunsetting traditional MIPS starting with the 2029 performance year.
- A new practice expense stabilization adjustment would cap annual changes in practice expense RVUs at plus or minus 5 percent for most existing services, alongside a two-year phase-out of the Indirect Practice Cost Index.
The CY 2027 telehealth proposals
A glossary line for readers new to this: Medicare telehealth rules have two layers. Statute sets who may furnish telehealth, where the patient may be and whether audio-only counts; CMS sets the list of services, the modifiers and the payment. Since 2020 the statutory flexibilities have been extended in short increments, and Congress most recently extended them in the Consolidated Appropriations Act, 2026, through the end of 2027. The proposed rule makes the regulatory text match.
Specifically, CMS proposes to continue waiving the geographic and originating site restrictions so patients may receive telehealth at home anywhere in the country, to keep the expanded list of eligible practitioners including physical and occupational therapists and speech-language pathologists, and to cover audio-only telehealth for services on the list, all through December 31, 2027. The in-person visit requirement that would otherwise apply before and periodically during mental health telehealth is delayed until January 1, 2028. For a behavioral health practice, that means one more year of the current model; for a primary care practice, it means the home-based follow-up visit remains billable through next year.
CMS also proposes adding five new HCPCS G codes to the Medicare Telehealth Services List, including two placeholder codes for advance care planning (GACP1 and GACP2) that the rule creates elsewhere to separate clinical staff work from practitioner time, and it proposes modifying the teaching physician virtual presence rules. The originating site facility fee, HCPCS Q3014, would rise to $32.65 for 2027 under the proposed 2.5 percent Medicare Economic Index update; that fee only matters if your office serves as the site where a patient sits for a telehealth visit with a distant practitioner.
Modifiers BB and BC
This is the item that changes what billers type. CMS proposes two new informational modifiers for telehealth claims, effective January 1, 2027. As described in the rule, they identify telehealth services furnished through certain third-party virtual telehealth platform arrangements, and telehealth services furnished incident to a physician's professional service. In practical terms, if a practitioner in your group furnishes Medicare telehealth through a platform owned by a company the practitioner contracts with or has a payment arrangement with, the claim would carry the applicable modifier. The rule text describes which modifier applies to which arrangement; read it before you build the claim edit, because summaries, including this one, compress the distinction.
The modifiers do not change the payment amount. Their purpose, as CMS describes it, is visibility: Medicare currently cannot tell from claims data which telehealth visits ran through platform companies, and the modifiers make that visible. Our opinion is that this is a data-collection step ahead of future payment policy, and practices that furnish a lot of telehealth through platform partners should assume the arrangement will be scrutinized once the data exists.
| Proposal | Effective if finalized | Who it touches | Claim or workflow change |
|---|---|---|---|
| Telehealth flexibilities continued (geography, originating site, practitioner list, audio-only) | Through December 31, 2027 | Every practice billing Medicare telehealth | None new; keep POS 10 or 02 and modifier 93 for audio-only as today |
| Mental health in-person requirement delayed | To January 1, 2028 | Behavioral health and primary care furnishing mental health telehealth | No in-person visit tracking needed in 2027 |
| Modifiers BB and BC | January 1, 2027 | Practitioners using third-party virtual platforms; incident-to telehealth | New claim edit; identify affected practitioners and platforms now |
| Five G codes added to the telehealth list, including GACP1 and GACP2 | January 1, 2027 | Practices billing advance care planning and the other new codes | Load codes; update telehealth eligibility table |
| Q3014 originating site fee to $32.65 | January 1, 2027 | Offices hosting patients for distant-site telehealth | Update fee schedule |
Quality Payment Program: MVPs move to the center
A glossary line: MIPS is the Merit-based Incentive Payment System, the Medicare quality program that adjusts Part B payments two years after the performance year based on quality, cost, improvement activities and interoperability scores. MVPs, or MIPS Value Pathways, are specialty-specific bundles of measures meant to replace the pick-your-own-measures approach of traditional MIPS.
The proposed rule would keep the MIPS performance threshold at its current level through the 2028 performance year, which is stability practices will welcome after years of watching it climb. It proposes three new MVPs for 2027: Diabetic Disease, Hypertension and Hospitalist. Primary care and internal medicine practices will find the first two relevant, and the rule proposes that every MVP include the MIPS core measures. Most significant, CMS proposes to sunset traditional MIPS reporting beginning with the 2029 performance year and move clinicians to MVPs as the primary framework. That gives practices 2027 and 2028 to pick an MVP, test it, and see how the scores compare before the choice stops being optional.
The rule also proposes extending the reporting incentive to accountable care organizations reporting MIPS clinical quality measures for 2027 and later years. If your practice is in a Shared Savings Program ACO, the ACO will be reading that section closely, and you should ask what it means for your reporting burden.
The practice expense stabilizer
Practice expense, or PE, is the portion of each service's relative value units that pays for staff, supplies, equipment and overhead, as distinct from physician work and malpractice. CMS has relied on specialty survey data that is, in places, almost two decades old. The proposed rule begins a multi-year move toward what CMS calls more objective, routinely updated and auditable cost data, and to keep the transition from producing wild swings it proposes a PE stabilization adjustment limiting annual increases or decreases in PE RVUs to plus or minus 5 percent for most existing services. It also proposes revising how indirect PE is allocated to align it more closely with work RVUs and clinical labor, phasing out the Indirect Practice Cost Index over two years, and adjusting indirect PE for services during skilled nursing facility Part A stays. CMS asks for comment on whether the facility versus non-facility payment differential remains appropriate at all.
Why an office practice should care: your fee schedule is the sum of work, PE and malpractice RVUs times the conversion factor. When PE methodology changes, some services go up and some go down even if nobody touched the work values. The 5 percent cap limits the damage in any one year, but a service that CMS believes is overvalued on PE will lose 5 percent a year until it lands where CMS thinks it belongs. Practices heavy in office-based procedures with high supply costs, and those whose specialty's survey data is old, should look at the proposed RVU file for their top twenty codes rather than trusting the specialty-level impact table.
What we think is worth a comment
The BB and BC modifiers, if the distinction between the two is unclear to you after reading the rule text, because unclear informational modifiers become denial reasons. The mental health in-person requirement, which behavioral health practices have argued for years should be removed rather than delayed. The MVP sunset timeline, if your specialty still has no MVP that fits. And the PE stabilizer, if a service you rely on shows up in the proposed RVU file with a decline that the cap only slows. Two paragraphs from a clinician describing a specific patient population carry more weight than a form letter, and the deadline is September 14. Our medical billing team can pull the proposed RVU values for your code mix, and our training courses for the fall will include the modifier changes if they are finalized.
Questions we hear
Do BB and BC replace modifier 95 or the place of service codes?
No. As proposed they are additional informational modifiers for specific arrangements, layered on the existing telehealth reporting (POS 02 or 10, modifier 93 for audio-only, and 95 where a payer still requires it). A practice that furnishes telehealth on its own EHR's video tool with its own employed clinicians would not, on our reading, append either one. Confirm against the final rule.
Should we switch to an MVP for 2027?
If one of the proposed or existing MVPs fits your specialty, running it in parallel with traditional MIPS for 2027 is the low-risk way to learn. You can compute both scores from the same data and submit whichever is better, within the program rules. Waiting until 2029 to try means learning under pressure.
Where do we see the practice expense effect on our own codes?
CMS posts the proposed rule RVU file with the rule. Filter it to your top codes and compare the 2027 proposed PE RVUs to 2026 final. The specialty impact table in the rule is an average and can hide a large change to a single high-volume code.
What to do this week
- List every practitioner and every platform through which your practice furnishes Medicare telehealth, and note any contract or payment arrangement with a platform company; that list determines whether BB or BC would apply.
- Pull the proposed RVU file for your top twenty codes and compare proposed 2027 PE RVUs to 2026.
- If you report MIPS, read the Diabetic Disease and Hypertension MVP measure sets and decide whether to run one in parallel for 2027.
- Behavioral health practices: confirm your 2027 telehealth workflow assumes no in-person requirement until 2028 and document that assumption.
- Draft a comment on any item above that would change your practice, and submit it before September 14, 2026.
