CMS finalizes 2027 fee schedule: conversion factor down 2.31%, same-day E/M cut narrowed to 0-day globals

What changed

CMS released the final CY 2027 Medicare Physician Fee Schedule on November 4. It will publish in the Federal Register on November 9, and most policies take effect January 1, 2027 [1, 4]. The conversion factor, the dollar multiplier that turns a service’s relative value units (RVUs) into a payment, falls to $32.6286 for clinicians who are not qualifying APM participants (QPs). That is a $0.77, or 2.31%, cut from $33.4009. For QPs, the factor falls 1.83% to $32.9548 [3]. Both cuts are deeper than July’s proposal, which would have cut 1.68% for non-QPs and 1.19% for QPs [6].

The arithmetic is in the rule itself. CMS starts from the 2026 factors with the one-year 2.50% statutory increase for 2026 removed. It then applies a -0.12% budget neutrality adjustment and the statutory updates of 0.25% for non-QPs and 0.75% for QPs [3, 8]. Budget neutrality is the requirement that RVU changes not raise or lower total spending by more than $20 million, so increases for some services are offset across all services [8]. Chief Healthcare Executive reported that this adjustment was +0.53% in the proposal. Its move to -0.12% accounts for most of the difference between the proposed and final cuts [6].

Who it affects

The conversion factor cut reaches every practice paid under the fee schedule. The narrower policies hit specific groups:

• Specialties that pair visits with minor procedures. CMS says the same-day visit reduction will still hit dermatology, otolaryngology and podiatry hardest, though by smaller percentages than it projected in July [3].
• Practices whose payment depends on indirect practice expense. CMS is removing the indirect practice cost index (IPCI), an input built on old specialty survey data, from the practice expense formula over two years. It is also adding a 5% “PE stabilization adjustment” to limit year-to-year swings [3]. CMS’s impact discussion attributes projected decreases largely to this change and the same-day visit policy, naming dermatology, otolaryngology, orthopedic surgery and hand surgery, and to a lesser extent ophthalmology, podiatry, neurosurgery and plastic surgery [3].
• Primary care and longitudinal-care practices that bill G2211, plus clinicians in Shared Savings Program or LEAD Model ACOs [1].
• Practices that use third-party remote patient monitoring (RPM) or remote therapeutic monitoring (RTM) vendors [3].
• MIPS eligible clinicians who do not report through an APM [3].

What it means for your practice

Revenue. Before any code-level RVU changes, every total RVU you bill pays about 77 cents less in 2027 if you are not a QP [3]. Your actual change depends on your code mix. CMS says its specialty impact percentages are averages and “may not necessarily represent what is happening to the particular services furnished by a single practitioner” [3]. CMS posted a new public use file showing the range of impacts within each specialty, and that file is a better guide for your practice than the specialty averages [3].

Same-day visits and minor procedures. CMS proposed paying 50% for the lower-paid service when an office visit billed with modifier 25 falls on the same day as a 0-, 10- or 90-day global procedure. The final rule cuts that service by 20% instead, and only when the procedure has a 0-day global period [1, 3]. The policy applies when the same physician, or a physician of the same specialty in the same group, furnishes both services [3]. The higher-paid service is still paid at 100% [1]. CMS estimates that limiting the policy to 0-day globals alone reduces the specialty impacts by about 1 percentage point [3]. Visits paired with 10- and 90-day global procedures are outside the policy [7].

G2211 becomes a modifier. Instead of billing add-on code G2211, you append modifier B1 to the office/outpatient or home E/M code. B1 adds 16% of that E/M service’s total RVUs, so the dollar add-on now rises with the visit level instead of staying flat [1, 3]. Practitioners in a Shared Savings Program ACO, or participant providers in a LEAD Model ACO, can use modifier B2, which adds 32%. They can bill it for all the patients they serve, not only assigned ones [1]. CMS expects B1 to have “minimal impact” overall, because it was priced from existing G2211 volume [3]. CMS posted a crosswalk that converts B1 and B2 to RVUs at each E/M level [3].

Remote monitoring. CMS finalized limiting RTM to established patients and requiring a separately reportable initiating visit for new RPM and RTM episodes [1]. Its ban on billing RPM and RTM when the work is done by contracted rather than directly employed clinical staff has been delayed to January 1, 2029 [3, 5]. CMS says it will publish sub-regulatory guidance on acceptable staffing arrangements before then [3].

MIPS. Traditional MIPS stays available through the CY 2030 performance period. Starting with CY 2031, every MIPS eligible clinician who does not report through the APM Performance Pathway must report through a MIPS Value Pathway (MVP) [3]. That is two years later than CMS proposed [2, 5]. CMS also added MVPs for diabetes, hypertension and hospitalists [2].

Telehealth, as covered in the rule. Under the Consolidated Appropriations Act, 2026, the in-person visit requirement for tele-mental health stays waived through December 31, 2027. Rural health clinics and federally qualified health centers can bill non-behavioral telecommunication visits through the same date [1].

What to do now

1. Update your 2027 Medicare fee schedule. Use $32.6286 (non-QP) or $32.9548 (QP) and the final RVUs in Addendum B, which CMS posts with the rule [3].
2. Update billing logic for G2211. Retire G2211 on 2027 claims and build B1, or B2 if you are in an eligible ACO, into your E/M charge capture. Check the B1/B2 crosswalk file to see what each E/M level will pay [1, 3].
3. List your 0-day global procedures. Pull the procedures you most often bill with a modifier 25 visit on the same day, and check their global indicators in the final rule files [7]. These encounters will lose 20% on the lower-paid service starting January 1 [1, 3].
4. Review remote monitoring contracts. If a vendor’s staff deliver your RPM or RTM, you have until January 1, 2029 to restructure, and CMS’s guidance on staffing arrangements is still to come [3].
5. Plan your MVP move. Choose the MVP that fits your specialty now, rather than in 2030 [3]. CMS says MVPs already cover about 98% of clinicians [2].

The policy fight

CMS presents the rule as a turn toward prevention and away from paying for volume. Administrator Mehmet Oz said, “For too long, fee-for-service payment has rewarded volume over value, fueling a reactive system of sick care” [2]. HHS Secretary Robert F. Kennedy Jr. said, “Medicare should reward clinicians for keeping people healthy” [2]. CMS frames the same-day visit policy as ending duplicate payment. Oz cited “ending duplicate billing and closing costly loopholes,” according to Optometry Times [7].

Physician groups focused on the cut. The American Academy of Family Physicians said, “Physicians will once again begin the year with lower rates as practice costs continue to rise,” as quoted by Chief Healthcare Executive [6]. Anders Gilberg, MGMA’s senior vice president of government affairs, objected to what he called “destabilizing policies in the 2027 Medicare Physician Fee Schedule,” according to the same report [6]. These are advocacy positions.

CMS did make concessions after receiving about 43,100 comments [3]. It cut the same-day reduction from 50% to 20%, dropped 10- and 90-day globals from that policy, delayed the remote monitoring staffing rule by two years and moved the MIPS sunset by two years [3, 5]. It turned down commenters who asked for a new specialty practice expense survey before removing the IPCI. CMS said recent survey efforts had low response rates and nonrandom samples [3]. CMS did not change the conversion factor math, which follows from the statute and the expiring 2026 increase [3, 8]. Any relief from that would have to come from Congress.