Medicare's final 2027 fee schedule cuts pay and changes same-day and G2211 billing for practices

Medicare's final 2027 physician fee schedule cuts the conversion factor 2.31% for most clinicians, trims payment for some same-day visits and replaces add-on code G2211 with a pair of modifiers, all starting Jan. 1.

The Centers for Medicare & Medicaid Services (CMS) released the final rule Nov. 4. For clinicians who don't qualify through an advanced alternative payment model (APM), the conversion factor drops from $33.40 to $32.63, according to the CMS fact sheet.

For qualifying APM participants, it falls 1.83%, from $33.57 to $32.95. Both cuts are deeper than the 1.68% and 1.19% CMS projected in its July proposal.

Most of the decline comes from the expiration of a one-year 2.5% increase Congress provided for 2026. Statutory updates of 0.25% and 0.75% offset part of it, and an adjustment for changes to work relative value units (RVUs) moved from +0.53% in the proposal to -0.12% in the final rule.

The Medical Group Management Association (MGMA) told CMS in its September comment letter that it was "deeply concerned about the impact of the estimated reductions to the conversion factors."

"For too long, fee-for-service payment has rewarded volume over value, fueling a reactive system of sick care," CMS Administrator Mehmet Oz, M.D., said in a news release. "This final rule breaks from that status quo."

Same-day visits with modifier -25

When a separately identifiable office or outpatient evaluation and management (E/M) visit billed with modifier -25 falls on the same day as a procedure with a 0-day global period, Medicare will pay the higher-paid service in full and the other at 80%.

The reduction applies when the same physician, or a physician of the same specialty in the same group practice, furnishes both services.

The July proposal would have paid the second service at 50%, reached 10- and 90-day global procedures and applied to any physician in the same practice. CMS scaled back all three after public comments.

Commenters told the agency that patients often schedule same-day appointments with physicians of different specialties, especially when they travel for care, according to the rule. Visits furnished the same day by physicians of different specialties in the same group are not subject to the reduction.

MGMA's letter said the group "strongly opposes CMS' proposal to cut same-day services by 50%." CMS estimates dermatology, otolaryngology and podiatry will see the largest effects from the final policy.

G2211 becomes modifiers B1 and B2

Add-on code G2211 for E/M visit complexity is replaced by modifier B1, which is appended to the E/M base code and raises its payment by 16% rather than a flat amount. CMS said the change streamlines billing and expects minimal overall payment impact because volume billed under the code moves to the modifier.

Clinicians participating in a Medicare Shared Savings Program accountable care organization (ACO), or participant providers in the Long-term Enhanced ACO Design (LEAD) Model, can append modifier B2 instead, which raises the visit payment 32%.

B2 is voluntary and can be billed for any patient those clinicians see, not only patients assigned or aligned to the ACO. Claims billed with B2 count toward beneficiary assignment and benchmark and performance year spending for the Shared Savings Program and the LEAD Model.

Remote monitoring: a new visit requirement and a delayed staffing rule

Starting in 2027, remote therapeutic monitoring (RTM) can be furnished only to established patients, and practices billing RTM or remote physiologic monitoring (RPM) must furnish a separately reportable initiating visit when the services begin. CMS also updated how the services are valued.

CMS delayed to Jan. 1, 2029, a requirement that RPM and RTM be paid only when performed by clinical staff the practice employs, not contractors. The agency said the two-year delay gives practices time to adapt.

Billing staff time for advance care planning

Two new codes, G0572 and G0573, describe advance care planning furnished by clinical staff under the direct supervision of the billing physician or practitioner. Current Procedural Terminology codes 99497 and 99498 will be reserved for time the billing practitioner personally spends.

CMS also finalized separate coding and payment for shared medical appointments, with an add-on code for additional time, and add-on coding for diagnosing and treating vaccine adverse effects, covering work beyond the E/M visit such as answering patient questions and providing resources.

The agency's release adds national payment pathways for health and well-being coaching under general supervision. Smoking and tobacco cessation services and structured assessment, brief intervention and referral to treatment services join the final year of a four-year increase to work RVUs for timed behavioral health services.

Quality reporting timeline

The traditional Merit-based Incentive Payment System (MIPS) reporting option ends beginning with the 2031 performance period, according to the CMS release. Clinicians have through 2030 to move to MIPS Value Pathways (MVPs), which CMS said already cover about 98% of clinicians, or to advanced APMs, two years longer than CMS proposed. The rule adds MVPs for diabetes, hypertension and hospitalists, and starting in 2027 clinicians must report at least one specialty-specific core measure.

CMS is also pausing the global surgery data collection required by section 523 of the Medicare Access and CHIP Reauthorization Act. The agency said commenters agreed the current requirements may be causing undue burden.

Changes for practices in ACOs

Starting April 1, 2027, ACOs approved by CMS may reduce or eliminate Part B cost sharing for many items and services for assigned beneficiaries, through arrangements with their ACO participants. Durable medical equipment, prosthetics, orthotics and supplies, and prescription drugs are excluded. CMS will collect initial applications in early 2027, according to the Shared Savings Program fact sheet.

Beginning Jan. 1, ACOs and ACO participants must give beneficiaries the standardized written notice at least once per agreement period, by May 30 unless CMS sets a later date, rather than at or before a first primary care visit. The required verbal or written follow-up after the notice is gone.

The shared savings rate for Level E of the BASIC track rises from 50% to 60%, and CMS is removing the prepaid shared savings option, with payments to current participants ending Dec. 31, 2027.

Other provisions

The Consolidated Appropriations Act, 2026, extended Medicare telehealth flexibilities through Dec. 31, 2027. The final rule recognizes diabetes self-management training and medical nutrition therapy as stand-alone billable visits at rural health clinics and limits clinical lab fee schedule payment reductions to 15% a year through 2029.

The rule also implements limits on Medicare eligibility under Public Law 119-21, which CMS calls the Working Families Tax Cut legislation, to U.S. citizens and nationals, lawful permanent residents, Cuban and Haitian entrants, and people lawfully residing in the U.S. under a Compact of Free Association. It includes procedures for termination and appeal rights for people found ineligible.

"Medicare should reward clinicians for keeping people healthy," Health and Human Services Secretary Robert F. Kennedy Jr. said in the release.

The rule takes effect Jan. 1, 2027.