CMS proposes 2027 fee schedule: conversion factor down 1.68%, same-day visits with procedures paid at half

In its own example of the policy, CMS walks a patient into a dermatologist’s office. The patient has a level-two established visit, CPT 99212, and two shave removals, 11300 and 11301. Under the CY 2027 proposed rule, the shave of the larger lesion would be paid in full at 3.48 RVUs. The other shave would drop from 2.89 to 1.445 RVUs, and the office visit from 1.78 to 0.89 [1]. Today all three are paid in full.

What changed

CMS released the CY 2027 Medicare Physician Fee Schedule proposed rule, CMS-1848-P, on July 14, and it was published in the Federal Register on July 16 [1, 2]. The conversion factor, the dollar amount that turns a service’s relative value units (RVUs) into a payment, would fall to $32.8409 for clinicians who are not qualifying APM participants (QPs). That is $0.56, or 1.68%, below the 2026 rate of $33.4009. The QP conversion factor would fall 1.19%, from $33.5675 to $33.1693 [1, 2]. Most policies would take effect January 1, 2027, and comments are due September 14 [1, 3].

Who it affects

Every practice paid under the fee schedule takes the conversion factor cut. The RVU changes are concentrated. CMS’s specialty table, which leaves out the statutory conversion factor updates, puts these specialties at the bottom [1]:

• Dermatology: -9% overall, on about $3.9 billion in allowed charges
• Otolaryngology: -9% overall, and -10% for services billed in the office setting
• Orthopedic surgery: -7%
• Hand surgery: -5%
• Podiatry and colon and rectal surgery: -4% each
• Ophthalmology, plastic surgery and physician assistants: -3% each

CMS attributes most of those losses to the same-day visit proposal and to a change in how it calculates indirect practice expense [1]. Behavioral health clinicians gain the most: clinical social workers +12% and clinical psychologists +11%. Family practice and internal medicine are each at +1%, and geriatrics at +4% [1].

The rule also reaches practices that bill G2211, practices that use outside remote monitoring vendors, and MIPS eligible clinicians [1, 2].

Why is the Medicare conversion factor going down in 2027?

The 2026 rate included a 2.50% increase that the statute applied to services furnished in 2026 only. CMS starts the 2027 calculation by taking that increase out [1, 2]. It then applies the permanent updates in section 1848(d)(20) of the Social Security Act, 0.25% for non-QPs and 0.75% for QPs, and a positive 0.53% budget neutrality adjustment [1]. Budget neutrality means RVU changes cannot move total spending by more than $20 million, so CMS adjusts the conversion factor to offset them [1]. Together those steps do not replace the expiring 2.50%. AHA News and AMGA described the cut the same way [3, 4].

The anesthesia conversion factor would be $20.2143 for non-QPs and $20.4165 for QPs [1].

What it means for your practice

Same-day visits and procedures. This is the proposal with the largest effect on procedural specialties. When you bill an office/outpatient E/M visit with modifier 25 on the same day as a 0-, 10- or 90-day global procedure, and the same physician or a physician in your group does both, Medicare would pay the highest-valued service at 100% and every other procedure or visit on the claim at 50% [1, 2]. CMS’s reasoning is that the global package already pays for pre- and post-service work, so “we are likely duplicating payment under the current payment methodology” [1]. In the dermatology example, at the proposed non-QP rate and before geographic adjustment, the 99212 visit would pay about $29 instead of about $58.

CMS proposed nearly the same cut for 0-day globals in the CY 2019 rule and dropped it after objections [1]. This version adds 10- and 90-day globals. CMS asks whether 25% would be the better reduction, and whether the policy should reach other E/M visits, such as inpatient visits [1]. It also warns against bringing patients back on another day to avoid the cut, saying it does not find it appropriate to schedule services “to maximize payment” [1].

Indirect practice expense. CMS would stop using the indirect practice cost index (IPCI), a step built on specialty-level survey data from 2007 and 2008, in calculating practice expense RVUs [1]. Half the change would apply in 2027 and the rest in 2028. To limit swings, CMS proposes a stabilization cap: a code’s practice expense RVUs could not rise or fall by more than 5% in a year [1]. The cap would not apply to new, revised or revalued codes [1].

G2211 becomes a percentage. G2211 pays a flat 0.52 RVUs today, which CMS says adds 29% to a 99212 but only 9% to a 99215 [1]. The proposal replaces it with a modifier, placeholder MOD1, billed under the same circumstances and worth 16% of the base E/M code [1]. By our arithmetic, that is about 0.28 RVUs on a 99212 and about 0.92 RVUs on a 99215, using CMS’s 2026 values. Practices that bill G2211 mostly on low-level visits would lose; those billing it on 99215s would gain. Practitioners in a Shared Savings Program ACO or a LEAD Model ACO could append a second modifier, MOD2, worth 32% [1, 2]. CMS expects MOD1 to have “minimal impact” overall [1].

Remote monitoring. Three changes stack up [1, 2]:

1. Remote therapeutic monitoring (RTM) would be limited to established patients, as remote physiologic monitoring (RPM) already is.
2. Each new RPM or RTM episode would need a separately billable initiating visit, in person or by telehealth, at which the monitoring is discussed.
3. Starting January 1, 2027, RPM and RTM time would count only when the clinical staff are direct employees of the practitioner or practice. Staff need not be on site, and general supervision would still apply.

CMS cites HHS Office of Inspector General reports on companies “cold calling” beneficiaries to sell monitoring [1]. CMS also seeks comment on folding the code set into four new G-codes [2].

MIPS. CMS proposes ending traditional MIPS reporting beginning with the CY 2029 performance period, leaving MIPS Value Pathways (MVPs) as the only MIPS option for clinicians outside the APM Performance Pathway [1]. It proposes three new MVPs [3].

Telehealth at health centers. For rural health clinics and federally qualified health centers, the in-person requirement for mental health visits would not apply through December 31, 2027, and non-behavioral telecommunication visits would stay payable through the same date [2].

What to do now

1. Run your modifier 25 claims. Pull twelve months of claims where a modifier 25 visit and a global procedure share a date of service. Reprice the lower-valued lines at 50%. That number is the core of any comment you file [1].
2. Check your codes in the proposed rule files. CMS posted Addendum B with code-level RVUs and a new file showing the range of impacts among practitioners within each specialty [1]. Both are more useful than the specialty averages.
3. Audit remote monitoring staffing. If a vendor’s nurses or technicians deliver your RPM or RTM, look at the contract’s term and exit clauses now. The employment requirement would start on the same date as the rest of the rule [1].
4. Price the G2211 change. Multiply your G2211 volume at each E/M level by 16% of that level’s RVUs and compare it with the flat 0.52 [1].
5. Comment by September 14. Use file code CMS-1848-P at regulations.gov, docket CMS-2026-2377 [1]. CMS asked specific questions on the 25% alternative, on inpatient E/M and on how common outsourced monitoring is, and answers with practice data carry the most weight [1].

The policy fight

CMS’s case on the same-day cut rests on overlap. It says the pre- and post-service work in a global package and a same-day visit duplicate each other, and that reviewing thousands of global codes one at a time is not practical [1]. When CMS floated the idea in 2019, MedPAC supported it, while physician groups argued that modifier 25 already restricts billing to significant, separately identifiable visits and that the RUC adjusts for overlap when it values codes [1].

AMGA, which represents multispecialty medical groups, focused on the conversion factor. “Once again, CMS has proposed conversion factor updates that fall well short of what it actually costs our members,” said Jerry Penso, MD, president and chief executive of AMGA [4]. “A single year of congressional intervention was never a substitute for structural reform,” he said, and AMGA pressed for an annual update tied to the Medicare Economic Index, an idea MedPAC has raised [4]. Those are advocacy positions.

On monitoring, ATA Action said it was still reviewing the changes. “ATA Action will be at the table to make sure the final rule supports and does not undermine technology-enabled care,” said Joe Nye, its vice president of public policy [5]. CEO Kyle Zebley said the group was “encouraged that CMS is signaling telehealth and digital health tools are here to stay in Medicare policy” [5].

The conversion factor itself follows from the statute and the expiring 2026 increase, so comments are unlikely to move it [1]. The same-day policy, the IPCI timeline and the monitoring rules are the parts CMS has asked commenters to test. Earlier this month, CMS’s outpatient proposal set the companion 2027 rates for ambulatory surgery centers, where many of these same procedures are performed. The comment period closes September 14.