CMS released the calendar year 2027 Medicare Physician Fee Schedule proposed rule yesterday, July 14, 2026. Comments are due by September 14, 2026. We spent last night with the fact sheet and the rule text so you do not have to. This is the summary we would give a practice owner in a fifteen-minute meeting, followed by the detail for the billing team.
The short version: payment goes down, the primary care add-on is restructured, surgeons and proceduralists who bill an office visit on the same day as a procedure lose money, and remote monitoring gets tightened. Nothing here is final. Everything here is worth a comment.
Key takeaways
- The conversion factor falls to $32.84 for most clinicians (from $33.40) and to $33.17 for qualifying APM participants (from $33.57), because the one-year 2.5 percent increase for 2026 expires and is not replaced.
- G2211 would be deleted and replaced by a modifier that raises the E/M payment by 16 percent, or 32 percent for clinicians in Shared Savings Program and LEAD Model ACOs.
- When a modifier 25 E/M visit is billed on the same day as a 0-, 10- or 90-day global procedure, only the highest-valued service would be paid in full; everything else would be paid at 50 percent.
- Remote monitoring would require an initiating visit, an established patient for RTM, and clinical staff employed by the practice rather than a vendor.
- Telehealth flexibilities run through December 31, 2027 under the Consolidated Appropriations Act, 2026, and the rule builds on that.
The conversion factor
For calendar year 2027, CMS proposes two conversion factors, as it has since the 2026 rule split them:
| Clinician group | CY 2026 final | CY 2027 proposed | Change |
|---|---|---|---|
| Qualifying APM participants | $33.57 | $33.17 | -1.19% |
| All other clinicians | $33.40 | $32.84 | -1.68% |
How you get there: the statute gives a 0.75 percent update to qualifying participants and 0.25 percent to everyone else. CMS adds an estimated 0.53 percent positive budget neutrality adjustment for proposed work RVU changes. Then the one-year 2.50 percent increase that Public Law 119-21 provided for CY 2026 expires, and nothing replaces it. Net result: most physicians see a cut of about 1.7 percent before any specialty-specific RVU changes.
A worked example. A service valued at 3.00 total RVUs pays $100.20 at $33.40 and $98.52 at $32.84, a difference of $1.68 per service. Across a practice billing 40,000 Medicare services a year, that is about $67,000 before you account for any change to the RVUs themselves, and before Medicare Advantage plans that pay a percentage of the Medicare fee schedule follow along. The specialty impact table in the rule is where you find the RVU effect; read your own specialty's row, not the average.
G2211 becomes a modifier
Since 2024, HCPCS G2211 has been a flat add-on paid with office and outpatient E/M visits when the physician is the continuing focal point for the patient's care or is managing a single serious or complex condition. CMS now proposes to delete the code and replace it with a modifier that increases payment for the underlying E/M code by 16 percent. A second modifier would give a 32 percent increase to clinicians participating in Shared Savings Program ACOs and the LEAD Model, and it would apply to all of their patients, not only attributed beneficiaries.
The effect depends on your visit mix. Sixteen percent of a 99214 is worth more than the flat add-on has been; 16 percent of a 99212 is worth less. Practices that bill G2211 heavily on lower-level visits lose; practices with a high 99214 and 99215 mix gain. We will publish a separate modeling piece with worked examples in two weeks.
The 50 percent cut for same-day E/M with a global procedure
When the same physician, or a physician in the same practice, bills a separately identifiable E/M visit with modifier 25 on the same day as a procedure with a 0-, 10- or 90-day global period, CMS proposes to pay the highest-valued service at 100 percent and every other service on the claim, including the E/M, at 50 percent. CMS names dermatology, otolaryngology and podiatry as the specialties most affected and asks whether a 25 percent reduction would reflect the overlapping work more accurately. We would add urology, orthopedics and any primary care practice that does in-office procedures to the affected list.
This is the proposal we expect the most comments on, and we think it deserves them. The multiple procedure logic already exists for surgical codes. Extending it to an E/M visit that meets the modifier 25 definition treats documented cognitive work as if it were a duplicate incision. If you have the data to show what the E/M work actually was, September 14 is when to show it.
Remote monitoring gets tighter
Three proposals for remote physiologic and remote therapeutic monitoring: RTM would be limited to established patients; a separately reportable initiating visit would be required before RPM or RTM begins, covering the monitoring plan, the clinical determination that monitoring is warranted and the patient's consent; and the services would be payable only when the clinical staff are employed by the billing practice rather than a third-party vendor. CMS also proposes to revalue the codes downward on the practice expense side and asks for comment on replacing the current seventeen codes with four bundled HCPCS G-codes. Practices that use a turnkey RPM vendor whose staff do the monitoring calls need to read this section carefully; we will write about it separately.
Telehealth
The Consolidated Appropriations Act, 2026, signed February 3, extended the geographic and originating-site flexibilities, audio-only coverage and the expanded practitioner list through December 31, 2027. The rule works inside that window. CMS proposes to delay the in-person visit requirement for mental health telehealth through the end of 2027 as well, adds five HCPCS G-codes to the Medicare telehealth list (advance care planning, voluntary group-based medical sessions, management of vaccine adverse effects, and treatment of speech, language and auditory processing disorders), and raises the originating site facility fee, Q3014, to $32.65 in line with the Medicare Economic Index.
Other items to note
| Proposal | What it means | Who should read it |
|---|---|---|
| Two new HCPCS codes for advance care planning furnished by clinical staff under direct supervision; CPT 99497 and 99498 limited to practitioner time | ACP conversations led by a nurse or social worker become billable separately | Primary care, geriatrics, palliative care |
| Separate coding and payment for shared medical appointments | Group visits get their own codes instead of being billed as individual E/M visits | Endocrinology, primary care, behavioral health |
| Practice expense methodology: phase out reliance on 2007 survey data, add a stabilizer limiting annual PE swings to about 5 percent | Fewer large year-to-year jumps in individual code values | Everyone; check your specialty impact row |
| Pause the MACRA global surgery data collection; post a public file of imputed post-operative visit RVUs | The long argument about whether 90-day globals are overvalued moves to a new data set | Surgical specialties |
| MIPS: performance threshold held through the 2028 performance year; data completeness rises from 75 to 80 percent; three new MVPs (diabetes, hypertension, hospitalist); electronic prior authorization measure required in 2028; traditional MIPS to sunset beginning with the 2029 performance year | MVP reporting stops being optional in practice within three years | Every MIPS-eligible group |
| Clinical laboratory fee schedule reductions capped at 15 percent a year through 2029 | In-office labs see continued cuts, but with a ceiling | Practices with a CLIA-certified lab |
| Shared Savings Program: BASIC track Level E shared savings rate rises from 50 to 60 percent | More upside for ACOs still in the BASIC track | ACO participants and practices considering joining |
| Request for comment on primary care payment, including a prospective payment option | Nothing changes in 2027; the direction for 2028 and after is being set | Primary care owners |
What we think
The conversion factor cut is arithmetic, not policy; Congress created the one-year bump and only Congress can extend it. The G2211 change is defensible. The same-day E/M proposal is the one we would fight, and the remote monitoring employed-staff test will catch well-run programs alongside the ones CMS is aiming at. The MIPS sunset is the quiet item: a practice that has never reported through an MVP has about two performance years to learn how.
Questions we hear
Is the 2.5 percent bump coming back?
Not in this rule, because CMS cannot do it. It was a one-year statutory increase for 2026. Whether Congress acts again depends on the fall; several bills would replace the one-year fix with an inflation-based update, and none has moved. Plan on $32.84 and treat anything better as upside.
Do these proposals affect our Medicare Advantage and commercial payments?
Indirectly and unevenly. Many Medicare Advantage contracts pay a percentage of the Medicare fee schedule and will follow the conversion factor automatically. Commercial payers adopt Medicare payment policies, such as the same-day reduction, when they choose to, and several have adopted past multiple-procedure logic within a year or two. Read your contracts for the fee schedule reference and the year it locks to.
What should a small practice comment on?
One or two proposals that touch your own claims, with your own numbers. A podiatry practice should comment on the same-day E/M reduction with its count of modifier 25 encounters. A primary care practice should comment on the G2211 modifier with its visit-level mix. CMS responds to specific, quantified comments; it does not respond to general objection.
What to do this month
- Recalculate your Medicare revenue at $32.84 (or $33.17 if you are a qualifying APM participant) using last year's RVU volume. Do not wait for the final rule to know your exposure.
- Pull twelve months of claims with modifier 25 on the same day as a 0-, 10- or 90-day global code. Count them and price the lower-valued service at 50 percent. That is your comment letter.
- Count your G2211 claims by E/M level. If most are 99212 and 99213, the modifier proposal costs you; if most are 99214 and 99215, it helps.
- If you use an RPM vendor, ask them in writing whether the monitoring staff are your employees or theirs, and what they plan to do if the proposal is finalized.
- Put September 14 on the calendar. Our RCM audit team can run the modifier 25 and G2211 analysis for practices that want the numbers without the spreadsheet work, and our billing clients will get theirs in the August report.
