Behavioral Health Services and CMS Rate Increases for 2027
Behavioral health services, including the psychiatric collaborative care model (CoCM), have seen rate increases from the Centers for Medicare & Medicaid Services (CMS) for 2027, as outlined in its fee schedule final rule, recently released.
While collaborative care codes have had mixed adoption rates historically, the CMS move was welcomed by industry groups like the American Psychiatric Association (APA). The final rule boosts the value of collaborative care services provided by primary care physicians and recognizes the contributions of behavioral health care managers.
“Collaborative care extends the reach of psychiatrists’ expertise by making psychiatric consultation part of the primary care team’s ongoing work,” said Dr. Mark Rapaport, president of the APA, in a news release. “Stronger payment helps sustain that partnership and the follow-up patients need to get better.”
Under the final rule, the professional-work portion of CoCM services receives higher value. Primary care clinicians often serve as the initial point of entry for patients seeking mental health or addiction treatment care. Collaborative models ensure that behavioral health managers coordinate and follow up on these components, potentially consulting psychiatrists to review case plans. The update will change how payment calculations reimburse and recognize staffing resources needed for CoCM services, thereby increasing support for this care model.
However, the Medicare changes only apply to service reimbursement, not mandatory pay increases for clinicians or care managers across the board. Since Medicare beneficiaries are not covered for residential treatment, enhancing payment support for psychiatric and behavioral healthcare through alternative models is a way to bolster resources for this patient population.
The Primary Care Collaborative (PCC), a group advocating for improvements in primary care in the U.S., also supported the Medicare changes.
“We’re grateful that CMS appears to have doubled down on its commitment to strengthening whole-person primary care by establishing reimbursement for health coaching, shared medical appointments, and more resources for behavioral health integration,” stated Ann Greiner, president and CEO of the PCC, in a news release.
Other notable shifts for behavioral health, autism, and addiction treatment providers from the final rule include:
- Increased valuations for substance use disorder (SUD) and tobacco screening and cessation.
- The final year of increases for psychotherapy valuations, set in 2024, is incorporated into the 2027 final rule.
- Alignment with legislation that relieves patients and providers from in-person mental health requirements until December 31, 2027.
- Removal of reporting requirements for the initiation and engagement of SUD treatment.
- Changes to applied behavioral analysis (ABA) reimbursement with an expanded code family and billing system rules.
- Updates to daily facility payment rates for partial hospitalization programs (PHPs) and intensive outpatient programs (IOPs).
The Medicare changes will take effect on January 1, 2027.