The Calendar Year 2027 Medicare Physician Fee Schedule proposed rule requires that clinicians add one of two new informational modifiers to telehealth claims starting January 1, 2027. Modifier BB identifies a medical service that a clinician provides through a virtual telehealth platform when that clinician has a contract or a payment agreement with that platform. Modifier BC identifies a telehealth service that a clinician provides as an integral part of another professional medical service. Neither modifier increases or decreases the amount of money Medicare pays. The new requirement increases data transparency because Medicare claims data will show telehealth services that involve specific platforms for the first time.
The majority of reports regarding the CY 2027 proposed rule focused on the conversion factor, which decreases to $33.1693 for eligible participants in advanced alternative payment models and $32.8409 for all other clinicians – those modifiers received a small amount of public interest. They are the specific components that change the information a medical practice must state on every telehealth claim that the practice sends to the government.
What do modifiers BB & BC actually require?
The two proposed modifiers provide information and do not change the financial value of a claim. It is true that they do not increase a payment, lower a payment or establish a new category of medical benefits. They are reporting indicators.
- Modifier BB is necessary when a clinician provides a telehealth service through a virtual platform and the billing clinician has a legal or financial agreement with that platform.
- Modifier BC is necessary when a clinician provides telehealth as an integral part of another professional medical service.
- Both requirements are mandatory starting January 1, 2027, if the government finishes the rule in its current form.
The lack of financial impact makes this change easy for administrators to ignore – but a mandatory modifier that a billing department applies incorrectly still constitutes a false statement on a Medicare claim. And the decision to use a modifier depends on the legal agreement rather than the billing process.
Why the trigger is a contract, not a technology
The common interpretation of “furnished through a virtual telehealth platform” focuses on technology and if the medical appointment occurred on software – this interpretation is too wide and does not match the focus of the proposal.
By the analysis of the Nixon Law Group, the modifiers exist to make telehealth services that involve platforms visible in claims data. The important test is the legal connection between the clinician and the owner of the platform rather than the use of video software. To decide if a modifier is necessary, a clinician must ask if money moves between the clinician and the platform and what path that money takes.
It is difficult for a clinician to evaluate this question without help. To understand the complexity, one can look at the different ways a small medical practice might organize its business:
| Arrangement | Money flow | Likely reporting posture |
|---|---|---|
| Practice licenses software, pays a subscription | Practice pays vendor | Needs a documented determination |
| Practice takes patient referrals from a platform | Platform routes volume | Clearly in scope |
| Practice receives per-visit compensation from a network | Platform pays practice | Clearly in scope |
| Platform takes a revenue share of visits | Both directions | Clearly in scope |
| Practice runs its own branded platform instance | Practice pays vendor for the instance only | The ambiguous middle |
The practice that buys any type of software has “a payment arrangement” with a vendor in a literal sense – but this cannot be the goal of the rule or every electronic Medicare claim would include a modifier. The rule focuses on medical care that a platform organizes and a practice must have a written policy for cases where the boundary is unclear.
Who this catches cleanly and who sits in the ambiguous middle
Some business models are easy to categorize – in the most obvious cases, a telehealth network sells services directly to consumers, a virtual care company provides staff or a platform finds the patient and pays the clinician – those are the specific business structures that the Centers for Medicare and Medicaid Services wants to track.
There is a middle category that is less clear, like a medical practice that pays for a license to use a platform under the name of the practice. In this case the practice finds its own patients and bills Medicare using its own national provider identifier. The practice owns the relationship with the patient and the relationship with the vendor is a purchase of software. As a practice evaluates white label telehealth platforms with HIPAA compliance, the practice usually falls into this middle category. In this situation, the arrangement is a private version of the software rather than a network connection and there is no shared revenue or flow of referrals to describe.
The initial observation is that this status does not resolve the decision. It is true that the details are easier to record, which is significant when practitioners must decide who manages the conclusions within a medical office.
For what purpose is CMS requesting the information?
The Centers for Medicare & Medicaid Services (CMS) states that the agency intends to examine how clinicians use services, how much they spend and how they refer patients. The agency plans to identify telehealth that involves a platform at the claim level. The summary by Holland & Knight describes the full regulation. It includes the plan to bundle evaluation and management services on the same day – this plan pays 50% for all services except the service with the highest price when a clinician provides an evaluation and management service during a global procedure.
The accurate interpretation of a new data requirement is that regulators take action based on the factors they can track. Care that occurs through a platform is currently not visible in Medicare claims. As soon as it is visible, the data is ready for reviews of service use, changes to payment rules and efforts to ensure program honesty in future regulations. There is no statement in the 2027 plan that this will occur. It is logical to prepare for this consistent behavior anyway.
Which actions to take before January
There are four actions that are beneficial to complete now – it is not necessary to wait for the final regulation to begin those tasks.
- List your platform contracts. You should document every telehealth agreement, the identities of the payers and receivers and the payment methods. A referral, a split of revenue, payment for each visit and a standard license fee are distinct sets of facts.
- Assign responsibility for the decision. This task is a matter of legal contracts and rule following. It is not a task for a medical coder. A person who has the right to see the vendor contracts must take official responsibility for the choice.
- Update the claim software and modifier logic. The software needs rules that add the BB or BC modifiers when they are necessary. The software must also mark telehealth claims that lack a decision.
- Document the logic. It is inexpensive to write a short report now that explains why a specific contract does or does not require the BB modifier. It is expensive to try to remember the reasons later.
Which factors are currently not certain
The document is a proposed regulation rather than a final law. The period for public comments ended on September 14, 2026. The final regulation is likely to appear near November 1, 2026. It is possible that definitions will become more narrow, dates for implementation will change and the words that describe modifiers will shift between the proposal and the final version.
The logical approach is to prepare the decision and the billing software settings now. The clinician can then check the descriptions against the final regulation in November. It is useful to list the contracts regardless of the final wording of the descriptions.
Questions that clinicians ask often
Is modifier BB a reason for Medicare to change the payment for a telehealth visit?
No. The BB & BC modifiers are for information only – they are neutral regarding payment in the current proposal. The modifiers are there to mark telehealth that involves a platform in the claim data. They are not there to change the amount of money the clinician receives.
At what time do the new telehealth modifiers start?
The modifiers start on January 1, 2027, if CMS finishes the 2027 Physician Fee Schedule as planned. The final regulation is likely to arrive around November 1, 2026.
Is the use of any telehealth software a reason to use modifier BB?
The literal text suggests this is not the case – the proposal is based on a contract or a payment deal with the owner of a platform that relates to the delivery of the service. It is not based on the general use of software. Clinicians with rare contracts should obtain a written decision instead of making an assumption.
Which individual in a small medical office is the owner of this decision?
The person who can view the vendor and network contracts should lead this task – this person should work with the individual who manages the billing software. The necessary information is in the contracts, so a team that only performs coding is not able to make the decision alone.
Is the analysis different if a clinic uses a telehealth platform with its own brand?
The facts for the analysis are different in this case – a licensed version of software that a clinic brands and bills for is a different setup than a network that finds patients and pays the clinician for each visit. Healee’s platform is in use by over 200 clinics and more than 1 million patients. It works as a single-tenant version under the brand of the client. In this case the link to the vendor is a license. It is not a referral or a revenue sharing deal. To observe how that system works, you can request a demo.
Sources:
- Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule – CMS, 2026
- What Does the CY 2027 Medicare Physician Fee Schedule Proposed Rule Mean for Digital Health Companies? – Nixon Law Group, 2026
- CMS Issues CY 2027 Medicare Physician Fee Schedule Proposed Rule – Holland & Knight, 2026