Every year in the first days of November, CMS publishes the Medicare Physician Fee Schedule final rule for the coming calendar year. The 2026 rule arrived on October 31, 2025. The 2025 rule arrived on November 1, 2024. We expect the CY2027 rule on or about November 1 this year, and we are not going to guess what will be in it. What we can do is describe the work a billing office should have finished before it arrives, because that work is the same every year and almost nobody does it in advance.
What we know today is what CMS proposed. The CY2027 proposed rule was released on July 14, 2026, with comments due September 14. It proposed conversion factors of $33.17 for clinicians who are qualifying participants in advanced alternative payment models and $32.84 for everyone else, both lower than the 2026 figures of $33.57 and $33.40, mainly because the one-year 2.5 percent increase Congress provided for 2026 expires. It also proposed converting the visit complexity add-on, HCPCS code G2211, from a separate code to a modifier, reducing payment for an office visit billed on the same day as a procedure with a global period, restricting remote physiologic and therapeutic monitoring codes to established patients, and moving away from the 2007 practice expense survey data. Any of that could change in the final rule. All of it is a reason to prepare now.
Key takeaways
- Know which commercial contracts move with Medicare, and which Medicare year they reference. Many "percentage of Medicare" contracts are pegged to an old schedule or a frozen conversion factor.
- Build the top-30 code model now with 2026 units and allowed amounts; when the final rule publishes, the practice's exposure takes an afternoon.
- Update the expected-allowed table on January 1, not just the charge master, or every underpayment report in January is wrong.
- January cash from patients dips as deductibles reset. Have the estimate script and a fast statement cycle ready by mid-December.
- Read the fact sheet the day it publishes and list every item that changes a field on a claim. The G2211 modifier proposal alone touches charge capture, the scrubber and coder training.
1. Know which of your contracts move when Medicare moves
Many commercial contracts pay a percentage of the Medicare fee schedule. The question the contract must answer is which one: the current year's schedule, updated each January, or a fixed year's schedule that never moves. Pull every payer contract and record, in a single table, the reimbursement basis, the year of the Medicare schedule referenced, whether the conversion factor or only the RVUs float, and the locality. Practices are routinely surprised to find that a contract they thought was "120 percent of Medicare" is 120 percent of a 2019 schedule, or that it follows current RVUs but a frozen conversion factor.
| Contract language | What happens on January 1 | What to do |
|---|---|---|
| Percentage of the current-year Medicare fee schedule | Your rates change with the final rule, up or down | Model the change; update the expected-allowed table on January 1 |
| Percentage of a fixed-year schedule | Nothing changes | Confirm the payer's system agrees; watch for silent updates |
| Proprietary fee schedule | Changes only when the payer sends a new schedule | Request the 2027 schedule in writing now |
| Current RVUs with a fixed conversion factor | Rates change only where RVUs change | Model code-level RVU changes for your top 30 codes |
2. Build the top-30 code model
Take the 30 CPT and HCPCS codes that produce most of your Medicare and Medicare-linked revenue. For each, record 2026 units, the 2026 national or locality allowed amount, and the total. When the final rule publishes, CMS posts the RVU file and the conversion factor with it; drop in the 2027 values and you have the practice's exposure in an afternoon. Practices that do this in November make staffing and pricing decisions in December. Practices that do not find out in March, when the first quarter's collections are compared with the budget.
A rough version can be built today from the proposed rule. Take a primary care practice billing 6,000 units of 99214 a year to Medicare and Medicare-linked plans. If the 2026 allowed amount in its locality is about $130, the code produces about $780,000. A conversion factor moving from $33.40 to $32.84 is a 1.7 percent cut, or roughly $13,000 on that one code if the RVUs do not change. Now add G2211: if the practice bills it on 3,000 of those visits at about $16 each, that is $48,000 that depends on how the modifier proposal is finalized and whether the practice's systems can bill it correctly on January 2. The point of the model is not the exact number; it is that the owner sees which codes carry the exposure before the rule lands.
3. Prepare the fee schedule update process
Know now how your practice management system loads a new Medicare fee schedule: from a vendor update, from a file you import, or by hand. Find out when the vendor expects to release the 2027 tables and whether they will include locality-specific values. Update the expected-allowed table, not just the charge master, because the expected-allowed table is what your underpayment reports compare against. A practice that loads new charges but keeps 2026 expected amounts will spend January chasing false underpayments, or worse, missing real ones.
Decide separately whether your charge master changes. Charges are the practice's prices; the fee schedule is Medicare's payment. Many practices set charges at a multiple of the Medicare schedule and update them once a year in January. If yours does, the final rule is the trigger, and the change needs to be loaded for dates of service on or after January 1 without touching 2026 claims still in process.
4. Deductibles, statements and the first six weeks
January is the month when Medicare patients owe their Part B deductible again ($283 for 2026; CMS announces the 2027 amount in the fall), commercial deductibles reset, and practice cash from patients dips while insurance payments continue at 2026 rates for December services. Three preparations help. First, the front desk should have an estimate-and-request script for deductibles ready by mid-December. Second, the patient statement cycle should be checked so that January remittances turn into statements within a week; a 30-day statement cycle that happens to fall on the wrong day pushes January balances into March. Third, the budget should expect lower patient collections in the first weeks of January and higher ones in February, and should not read that pattern as a problem.
5. Watch the pieces of the rule that change workflow, not just rates
The conversion factor gets the headlines. The workflow changes cost more time. In recent years the final rule has changed how telehealth is billed, added or revised codes for care management, and adjusted the rules for the G2211 add-on. If the final rule adopts the proposed shift of G2211 to a modifier, every practice billing it needs its charge capture, its claim scrubber and its coder training updated before January 1, and its billing team needs to know the modifier's rules. If the remote monitoring proposals are finalized, practices billing RPM or RTM need to check which patients qualify as established and how the initiating visit is documented. Read the fact sheet the day it publishes, list every item that changes a field on a claim, and assign each one to a person with a date.
6. Quality Payment Program changes ride along
The PFS final rule also finalizes the next year's MIPS and MVP policies. The 2027 performance year starts nine weeks after the rule publishes. Practices should read the QPP section for the measure list changes and any adjustments to reporting requirements, and confirm with their registry or EHR vendor which measures will be supported for 2027.
Questions we hear
Should we change our charges when the conversion factor falls?
Charges and Medicare payment are different things, and a lower conversion factor does not require lower charges. Most practices keep their charge master at a stable multiple and review it annually. The decision is the owner's; the billing office's job is to make sure whatever is decided is loaded correctly and on the right date.
Our payer says its rates will not change until it "adopts" the new schedule. Is that allowed?
It depends on the contract. Some contracts specify an adoption date after January 1 or a lag of a quarter. Read the clause, ask the payer for its adoption date in writing, and watch remittances in January against the expected-allowed table for that payer. A payer that adopts a lower conversion factor immediately but an RVU increase later is a pattern worth documenting and raising with the payer's contracting office.
Who owns this?
The billing lead owns the model and the fee schedule loading; the practice manager owns the contract table and the budget scenario. If your billing team is outside the practice, ask them to show you the top-30 model and the contract table before November 1. If they cannot, that is worth knowing now. An RCM audit will tell you whether the expected-allowed table in your system matches your contracts today, which is the foundation everything above depends on.
What to do this week
- Pull every payer contract and fill in the contract table: basis, Medicare year referenced, what floats, locality, adoption date.
- Export 2026 units and allowed amounts for your top 30 codes and build the model with a column for the proposed 2027 conversion factor.
- Ask the practice management vendor, in writing, when the 2027 Medicare tables will be available and how the expected-allowed table is updated.
- Check the statement cycle and draft the deductible script for December.
- Put November 1 on the calendar with one person assigned to read the fact sheet the day it publishes and list every claim-level change.
