The Centers for Medicare & Medicaid Services proposed reducing Medicare physician payment rates in 2027, ending a temporary increase scheduled to expire this year.
The 2027 Medicare Physician Fee Schedule proposed rule sets the conversion factor at $33.17 for clinicians in advanced alternative payment models, a 1.19% decrease from 2026. For other clinicians, the rate would fall to $32.84, a 1.68% reduction.
The adjustments include a 0.75% statutory payment update for qualifying participants and a 0.25% increase for others, along with a 0.53% change from relative value unit updates. These gains would be offset by the expiration of a 2.5% one-time payment boost Congress approved for 2026.
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Payment changes for same-day services
CMS also plans to reduce payments when a physician or another clinician in the same practice provides a separate evaluation and management visit on the same day as a procedure with a zero-, 10-, or 90-day global period.
Under the proposal, Medicare would pay the most expensive service at full rate and any additional visits or procedures that day at 50%. The agency replaces the existing G2211 complexity add-on payment with a modifier that increases the underlying visit payment by 16%. Clinicians in a Medicare Shared Savings Program or the new Long-term Enhanced Accountable Care Design Model could use a separate modifier for a 32% increase.
Remote monitoring services would face new restrictions. The proposal limits them to established patients, requires a separately billable initiating visit, and restricts billing to clinical staff employed by the practice—not outside contractors. CMS seeks feedback on bundling existing remote monitoring codes into four new Healthcare Common Procedure Coding System codes.
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The changes aim to move clinicians away from the traditional Merit-based Incentive Payment System, which the agency intends to phase out starting in 2029 in favor of specialty-focused reporting pathways.
CMS Administrator Mehmet Oz described the proposals as steps to strengthen primary care and expand accountable care models. The agency’s 1,592-page rule is set for publication in the Federal Register on July 16, with policies taking effect January 1, 2027, if approved.
Lawmakers have expressed concerns about the cycle of temporary fixes. A House Energy and Commerce subcommittee held hearings in May on long-term reforms to the payment system. The agency had initially proposed a 3.62% conversion factor increase for 2026, much of it tied to the temporary boost now ending.