Physician advocates flag cuts, same-day billing and new codes for practices in 2027 Medicare Physician Fee Schedule

Practice administrators building 2027 budgets now have final numbers. Medicare’s physician payment rule lowers the conversion factor and rewrites several billing rules that take effect Jan. 1. Organizations responding to the rule say it also opens new revenue paths for group visits, coaching and behavioral health.

The Centers for Medicare & Medicaid Services (CMS) finalized the 2027 Medicare Physician Fee Schedule on Nov. 4. The conversion factor, which Medicare multiplies by each service’s relative value units to set payment, is $32.95 for clinicians in qualifying advanced alternative payment models (APMs) and $32.63 for everyone else. Those are cuts of 1.83% and 2.31% from this year’s $33.57 and $33.40, deeper than the 1.19% and 1.68% CMS proposed in July.

The revenue forecast and the call for Congress

The Primary Care Collaborative (PCC) said that, under statutory budget neutrality requirements, Medicare will apply across-the-board reductions Jan. 1 absent action from Congress.

“We urge Congress to take immediate steps to address the harmful payment cuts imminent in the new year,” PCC President and CEO Ann Greiner, M.C.P., said in a news release.

The Medical Group Management Association (MGMA) said it is disappointed by CMS’s decision to finalize several “destabilizing policies,” Anders Gilberg, MGMA senior vice president of government affairs, said in a statement. MGMA wants Congress to fix the conversion factor cuts immediately. The American Academy of Neurology (AAN) said it is “committed to working with Congress to avert this cut before it goes into effect for 2027.”

Same-day visits and procedures

For practices that bill an office visit and a minor procedure on the same day, CMS finalized payment of 100% for the higher-cost service and 80% for the other. CMS had proposed 50% for the lower-cost service. The agency grouped the policy with its payment-integrity provisions.

MGMA objected to the 20% reduction, which is tied to modifier 25, the modifier practices append to show a visit was separate from a procedure. MGMA said the cut applies to office visits billed with modifier 25 on the same day as certain procedures, and Gilberg said it interferes with “physician practices’ ability to offer same-day care.” AAN said its fuller rule summary also addresses same-day procedure payment.

Modifiers that change evaluation and management payment

CMS turned the add-on code G2211, used for the complexity of ongoing care, into modifier B1. Appended to the evaluation and management (E/M) base code, it raises that visit’s payment by a flat 16%. Clinicians in the Medicare Shared Savings Program or the LEAD Model can use B2, a 32% increase. CMS said use of B2 is voluntary.

Accountable for Health CEO Mara McDermott, J.D., welcomed the 32% increase in a statement. She said her group was disappointed CMS did not extend the enhanced modifier to clinicians in the Comprehensive Kidney Care Contracting Model, and urged the agency to reconsider.

New services to build into workflows

Several finalized provisions create or revalue services, according to CMS and the groups:

• Shared medical appointments with time-based add-on codes, which ACLM said pay more for longer sessions
• Health and well-being coaching under general supervision, meaning the supervising clinician need not be present
• Increased reimbursement for the Psychiatric Collaborative Care Model and updated pricing for behavioral health care managers, according to PCC
• Two new advance care planning codes, G0572 and G0573
• Higher valuations for smoking-cessation and behavioral-health assessments

“We are delighted that CMS engaged with ACLM on this year’s Physician Fee Schedule,” said Padmaja Patel, M.D., president of the American College of Lifestyle Medicine (ACLM), in a news release. ACLM said it hopes to keep working with CMS on appropriate reimbursement for shared medical appointments and access in Federally Qualified Health Centers and Rural Health Clinics.

Practices in ACOs: cost-sharing, reporting and benchmarks

Starting April 1, 2027, approved accountable care organizations (ACOs) may reduce or eliminate Part B cost-sharing for many services, CMS said. The National Association of Accountable Care Organizations (NAACOS) credited CMS with simplifying quality reporting requirements and expanding flexibility for cost-sharing reductions, among other changes.

McDermott said the rule also raises the credit ACOs receive for prior-year savings from 50% to 75%. She cautioned that “reductions to regional benchmark adjustments” could weaken incentives for successful ACOs.

Obstetric billing changes

The American College of Obstetricians & Gynecologists (ACOG) said the final rule includes the American Medical Association’s new obstetric codes, replacing the current method of billing for prenatal care. The G-codes proposed over the summer were not included, ACOG said.

ACOG President Camille A. Clare, M.D., said the change “will address several challenges related to the current method of billing for prenatal care services,” according to a statement.

For the transition, ACOG said the Department of Health and Human Services is allowing health plans to use 2026 Current Procedural Terminology maternity care codes for pregnancies that begin in 2026 and end in 2027. Every pregnancy with a first prenatal visit in 2027 will use the new codes, including evaluation and management codes for prenatal visits. ACOG said patients will also see which prenatal and postpartum visits are exempt from copays.

ACOG said it has worked to prepare members for the coding and billing changes and will offer patient-facing resources.

The American Medical Association (AMA) also applauded the change. In a news release, AMA President Willie Underwood III, M.D., said the 30-year-old global maternity care bundle will be replaced Jan. 1, 2027, with a code framework that “better reflects contemporary obstetric practice.” He called CMS’ adoption of the modernized Current Procedural Terminology codes “a significant step to advance maternal health in the United States.”

Specialty practices

The American Association of Orthopaedic Surgeons (AAOS) said proposed cuts to total knee, hip and shoulder arthroplasty and shoulder hemiarthroplasty “were reduced by nearly 50%.” The group still said cuts “of any magnitude” could deepen workforce shortages.

AAOS President Wilford K. Gibson, M.D., called the decision “meaningful progress.”

What to watch before Jan. 1

The Peterson Center on Healthcare weighed in on remote monitoring, where it said CMS limited coverage and payment. Executive Director Caroline Pearson said CMS is “substantially reducing spending on the benefit,” making it “less appealing for providers and vendors.” She said the announced two-year delay of a requirement that remote monitoring be delivered by direct employees of a health care provider “will leave services in place for beneficiaries who use them while their providers prepare for these changes.”

With the rule effective Jan. 1, the open question for most practices is whether Congress acts on the conversion factor first. Physicians Practice will keep following the billing and operations effects.