CMS 2027 Medicare Physician Fee Schedule Proposal: Key Changes for Providers

What Is the Proposed 2027 Medicare Physician Conversion Factor?

Medicare uses a conversion factor to turn a service's relative value units (RVUs) into a dollar amount. This applies to services paid under the Physician Fee Schedule. For 2027, CMS again proposes two conversion factors. One is for Qualifying APM Participants (QPs). These are clinicians who take part in an Advanced alternative payment model (APM) at set levels. The other is for clinicians who aren't QPs. Both would go down:

• Qualifying APM Participants (QPs): $33.17, a 1.19% cut from today's $33.57.
• Everyone else: $32.84, a 1.68% cut from today's $33.40.

The drop mostly comes from the law, not from a new CMS decision. The Working Families Tax Cut legislation (Public Law 119-21) gave physicians a one-year 2.5% increase for 2026 only. CMS notes that this bump won't carry into 2027. Small updates required by law soften the drop a little, but not enough to prevent it. Payment for each service also depends on its RVUs and your geographic adjustment, so individual services won't all fall by the same percentage. For a billing team, even a 1% cut adds up across thousands of claims, so it's worth running the numbers early.

How CMS Proposes to Change Practice Expense Payments

Practice expense (PE) is the part of a Medicare payment that covers what it costs to run a practice, such as rent, staff, and equipment. For many procedural specialties, it makes up a big share of payment.

CMS says part of today's method still relies on specialty cost data from 2007 or earlier. A lot has changed in practices since then. A Holland & Knight analysis of the rule lists three main proposals:

• Change how indirect practice expense is assigned, so it follows work RVUs and clinical labor inputs more closely.
• Phase out the Indirect Practice Cost Index over two years. This index still ties payment to the older survey data.
• Add a "stabilizer" that limits yearly changes in practice expense RVUs to plus or minus 5% for most existing services. This is not a 5% limit on your total reimbursement change.

How Could Practice Expense Changes Affect Reimbursement?

CMS calls this a technical update, but it can shift money between specialties. Practice expense is a big part of payment for many procedures. So, a new method could raise payment for some specialties and lower it for others. The effects would also continue after 2027 as the changes phase in.

What this means for you depends on the codes you bill most. CMS posts payment files with the rule on its CMS-1848-P page. Your billing team can use them to compare current and proposed payment for your top codes.

E/M Visits, Global Periods, and Other Billing Changes

A few other proposals could land right in your daily billing work:

• Same-day office visits and procedures. CMS proposes to pay less when a separately identifiable office visit (an evaluation and management, or E/M, visit) is billed on the same day as a procedure. This applies when the same physician, or another physician in the same practice, bills both. It covers procedures with a "global period." That is a set window of 0, 10, or 90 days. The procedure's payment already covers related follow-up care in that window. Under the proposal, the highest-priced service would be paid at 100% and the other affected services at 50%. Holland & Knight notes that otolaryngology, dermatology, and podiatry could see the largest cuts.
• The G2211 add-on code. CMS proposes to replace HCPCS code G2211 with a modifier. It would raise the E/M payment by 16%, or by 32% for clinicians in certain accountable care organizations.
• Post-operative visit data. CMS proposes to pause the data collection required by MACRA. CMS says its data suggest many of these visits aren't happening, and the requirement adds extra work for practices.
• Remote monitoring. CMS proposes new billing rules for remote physiologic monitoring and remote therapy monitoring. They include an initiating visit, and payment only when the practice's own clinical staff perform the service.
• Telehealth originating site fee. The fee for HCPCS code Q3014 would rise to $32.65.
• Skilled nursing facility stays. The American Health Care Association (AHCA) reports a change under the 2026 rule. Payment for physician services during a Part A stay fell by about 12%, while long-stay payment rose about 4%. The 2027 proposal would adjust the indirect practice expense for these visits.

Is CMS Ending MIPS or Only Traditional MIPS Reporting?

It's easy to read this as MIPS going away, but that isn't what CMS proposes. The Merit-based Incentive Payment System (MIPS) would continue. Only the traditional reporting option would end, after the 2028 performance period. Starting in 2029, MIPS Value Pathways (MVPs) would be the only MIPS reporting option for clinicians who aren't in a MIPS APM. Clinicians in a MIPS APM would still be able to report through the APM Performance Pathway (APP). An MVP groups measures and activities by specialty or condition.

CMS also proposes three new MVPs for 2027: Diabetic Disease, Hypertension, and Hospitalist. It would add MIPS core measures to all 27 existing MVPs. Virtual groups could report MVPs starting in 2029. None of these changes 2027 payment. But it gives clinicians two performance years to choose an MVP and get their workflows ready.

New Tools and Questions for Accountable Care Organizations

If your practices are part of the Medicare Shared Savings Program (MSSP) as accountable care organizations (ACOs), this section is for you. CMS proposes changes to benchmarks, patient assignment, and quality reporting. It would also let ACOs reduce or eliminate some Part B cost sharing for eligible patients. CMS would need to approve each ACO first, and the target start is April 1, 2027.

This is not a blanket waiver. Durable medical equipment, prosthetics, orthotics, supplies, and prescription drugs are excluded. If you support ACO clients, watch how this plays out. We will be following it at Shoreline too. CMS's Shared Savings Program fact sheet covers each change in detail.

CMS Requests for Information: What Could Change Next

A request for information (RFI) is CMS's way of asking the public for input. It doesn't change policy. Still, RFIs often hint at where CMS may head next. Three stand out:

• Primary care payment. CMS asks how the fee schedule could better support ongoing, preventive care.
• CPT coding and the RUC. CMS is questioning how much say the American Medical Association has over the Current Procedural Terminology (CPT) coding system and the RUC, the committee that recommends values for services. It also asks if other code sets, like ICD-10-PCS, could take on a bigger role.
• Duplicate testing and data sharing. CMS asks how better sharing of lab and imaging results could reduce repeat tests.

None of these RFIs change 2027 payment. But if your work touches coding, primary care payment, or data exchange, they're worth a read.

What Providers and Billing Teams Should Review Now

You don't need the final rule to get started. Here's where we'd begin.

Reimbursement

• Confirm whether your clinicians are Qualifying APM Participants (QPs), since that decides which conversion factor applies.
• Estimate 2027 payment for your top billed codes using the conversion factor that applies to each clinician. Use both factors only when you want to compare scenarios.
• Check how practice expense changes could affect your specialty.

Billing Workflows

• Find out how often your team bills E/M visits on the same day as procedures with global periods.
• Review how you use G2211 today, so you're ready if it becomes a modifier.
• If you bill remote monitoring, look at your staffing and your initiating visit process.

Quality Reporting

• Identify which MVP fits your specialty.
• Check whether your group would need to report through subgroups. Large multispecialty groups may need them.
• Compare the proposed MIPS core measures with the measures you report today.

When payment rules change, outdated billing workflows can cause errors and rework.

What This Means for Healthcare Technology Teams

These proposals point to some clear needs. Practices may want tools that model practice expense changes before the final rule. They may need systems built for MVP reporting. And they could use better data sharing to cut down on duplicate testing. At Shoreline, we follow these shifts closely as part of our revenue cycle management services.

What to Watch in the Final Rule

The final rule isn't out yet, so these numbers could still move. When it arrives, we'll be looking first at the conversion factors, then the practice expense method, the same-day E/M policy, and the MIPS timeline. You can follow updates on the CMS Physician Fee Schedule page and in the Federal Register. We'll share plain-language updates here at Shoreline Healthcare Technologies as the final rule comes out. And if you'd like help working out what it means for your billing, our team is happy to talk it through.