2027 Medicare Physician Fee Schedule Proposal: Key Payment and Coding Changes

Among the most important proposals are lower Medicare conversion factors, a 50% payment reduction for certain same-day E/M and procedural services, replacement of HCPCS code G2211 with new modifiers, tighter remote monitoring requirements, and an eventual end to traditional MIPS reporting.

The proposed rule was published July 14, 2026. If finalized, most provisions would take effect January 1, 2027. CMS provides an overview of the proposed changes in its official PFS fact sheet .

Conversion Factors Would Decrease

CMS is proposing two separate conversion factors based on participation in advanced alternative payment models:

Qualifying advanced APM participants would receive a statutory update of 0.75%, while other clinicians would receive a 0.25% update. CMS also estimates a positive 0.53% adjustment related to proposed work RVU changes.

Those increases would be outweighed by the expiration of the temporary 2.5% Medicare Physician Fee Schedule increase that applies during 2026.

Practices should not apply the conversion-factor percentage uniformly across their expected Medicare revenue. Changes to work, practice-expense, and malpractice RVUs could cause the actual impact to vary substantially by specialty, procedure mix, location, and place of service.

Same-Day E/M and Procedures Could Be Reduced by 50%

One of the most consequential proposals involves separately identifiable office or outpatient E/M services performed on the same day as a procedure with a 0-, 10- or 90-day global period.

Under the proposed policy:

• The highest-priced E/M service or procedure would be paid at 100%.
• Every additional applicable E/M service or procedure would be paid at 50%.
• The policy would apply when the services are provided by the same physician or physicians in the same practice.

CMS believes there may be overlapping resources when an E/M service and global-period procedure are furnished during the same encounter.

If finalized, the policy could have a substantial effect on procedure-oriented specialties, including dermatology, orthopedics, ophthalmology, pain management, and some primary care practices.

Modifier 25 would still be needed when the documentation supports a significant, separately identifiable E/M service. However, the modifier would no longer ensure full Medicare payment for both services under the proposal.

Billing departments should identify their most frequently reported modifier 25 combinations and estimate the financial impact before the final rule is released.

G2211 Could Become a Modifier

CMS is proposing to discontinue separate reporting of HCPCS code G2211 and replace it with a new two-character HCPCS modifier.

The placeholder designation in the proposed rule is MOD1. If finalized, the actual two-character modifier would be announced later.

Instead of receiving a separate flat payment for G2211, the new modifier would increase payment for the associated office or outpatient E/M code by 16%. The percentage-based adjustment is intended to apply the same relative increase across all E/M levels.

CMS is also proposing a second modifier, temporarily identified as MOD2, for eligible practitioners participating in:

• The Medicare Shared Savings Program.
• The Long-term Enhanced ACO Design Model.

MOD2 would increase payment for the associated E/M service by 32% to recognize the additional resources involved in longitudinal care, care coordination, quality reporting, and total-cost-of-care accountability.

Practices should not alter claims systems yet. The modifier names are placeholders, and the final reporting requirements may change before implementation.

Remote Monitoring Requirements May Tighten

The proposal includes important changes to remote physiologic monitoring and remote therapeutic monitoring.

CMS is proposing to:

• Limit RTM services to established patients.
• Require a separately reportable initiating visit when RPM or RTM services begin.
• Allow payment only when applicable monitoring services are performed by clinical staff employed by the billing practice.
• Exclude services performed by contracted clinical staff.
• Reconsider the valuation of RPM and RTM services based on changes in device costs.
• Seek feedback on bundling existing codes and replacing portions of the current structure with four new HCPCS G codes.

The employee requirement could disrupt practices that rely on outside remote monitoring companies. Organizations should review existing vendor relationships, staffing arrangements, and contracts before assuming services will remain payable in 2027.

New Codes Proposed for Shared Medical Appointments

CMS is proposing separate coding and payment for shared medical appointments.

Shared medical appointments allow multiple patients with similar conditions or healthcare needs to receive clinical guidance in a group setting while still receiving appropriate individualized care.

CMS has not previously established a dedicated HCPCS code that specifically describes this model. The new coding could provide a more consistent method for reporting group-based chronic disease management and preventive care.

Until final codes and instructions are issued, practices should not assume that existing group services qualify for the proposed payment.

Advance Care Planning Coding May Change

CMS is also proposing two new HCPCS codes for advance care planning services performed by clinical staff under the direct supervision of a billing physician or other qualified healthcare professional.

Under the proposal:

• New HCPCS codes would describe qualifying clinical staff time.
• CPT codes 99497 and 99498 would be reserved for time personally spent by the billing physician or practitioner.
• Documentation would need to distinguish practitioner time from clinical staff time.

This change would give practices a way to separately identify the resources involved when trained clinical staff participate in advance care planning discussions.

If finalized, time documentation and supervision requirements will be critical. Practices should avoid combining physician and clinical staff time unless the final instructions specifically permit it.

Practice-Expense Methodology Would Be Revised

CMS is continuing a multiyear effort to change how practice-expense RVUs are calculated.

The agency currently relies partly on specialty-level practice-expense-per-hour data dating to 2007 or earlier. CMS is proposing to phase out the final portion of the methodology that anchors specialty payment pools to this older information.

A new practice-expense stabilizer would be used to reduce sudden fluctuations during the transition.

This change could affect specialties differently. Even when the overall conversion factor changes only modestly, revised practice-expense calculations can produce significant increases or decreases for individual services.

Practices should review CMS's proposed specialty-impact tables and code-level payment files rather than relying only on the national conversion factor.

Global Surgery Data Collection Could Be Paused

CMS proposes pausing the global surgery data-collection requirements established under MACRA.

The agency says available data indicate that some postoperative visits included in 10- and 90-day global surgical packages are not occurring at the frequency assumed in current valuations.

CMS is requesting comments on alternative data sources and methods for improving the accuracy of global surgical payments.

This proposal does not immediately unbundle global surgical packages. However, the data and public comments collected through this process could influence future revaluation of surgical procedures.

Behavioral Health and Chronic Care Updates

The rule would expand payment adjustments previously established for timed behavioral health services.

For 2027, CMS proposes including:

• Smoking and tobacco-use cessation services.
• Screening, brief intervention, and referral to treatment services.

These services would be included in the final year of the transition involving increased work RVUs for qualifying timed behavioral health services.

CMS is also seeking comments on how Medicare could better value primary care, preventive services, and technology-supported care.

RHC and FQHC Proposals

For Rural Health Clinics, CMS is proposing to recognize diabetes self-management training and medical nutrition therapy as qualified preventive services payable as stand-alone visits under the RHC all-inclusive rate.

CMS is also proposing regulatory changes reflecting statutory telehealth extensions through December 31, 2027, for qualifying RHC and Federally Qualified Health Center services.

RHCs should review the final rule closely for billing requirements, eligible practitioners, and applicable cost-sharing policies.

Clinical Laboratory Payment Reductions

The proposal includes changes required by the Consolidated Appropriations Act, 2026, affecting the Clinical Laboratory Fee Schedule.

Beginning in 2027, applicable payment reductions resulting from private-payor rate data could be phased in at up to 15% annually through 2029.

Laboratories should evaluate how the phase-in could affect high-volume tests and payor contracting.

Traditional MIPS Would End After 2028

CMS proposes ending traditional MIPS beginning with the 2029 performance period.

Most MIPS-eligible clinicians would need to transition to a MIPS Value Pathway by the end of 2028 unless they participate in a MIPS APM and report through the APM Performance Pathway.

CMS is proposing three new MVPs focused on:

• Diabetes.
• Hypertension.
• Hospital-based care.

The agency estimates that the expanded MVP inventory would provide a relevant reporting option for approximately 98% of specialties. CMS is also proposing MIPS Core Measures beginning in 2027, requiring clinicians to report at least one measure considered fundamental to their specialty or patient population. CMS outlines the proposed MIPS transition and new MVPs in its official announcement .

What Practices Should Do Now

Although the proposed rule is not final, practices should begin evaluating its potential impact.

Recommended steps include:

1. Model 2027 Medicare revenue using actual code volume and proposed payment files.
2. Review same-day E/M and global-period procedure combinations.
3. Calculate the potential effect of the proposed 50% payment reduction.
4. Inventory current G2211 utilization.
5. Review RPM and RTM staffing and vendor arrangements.
6. Evaluate documentation workflows for advance care planning.
7. Identify the MVPs applicable to each specialty.
8. Confirm that EHR and registry vendors can support future MVP reporting.
9. Review CMS specialty-impact estimates and practice-expense changes.
10. Submit comments when a proposal could affect access, administrative burden, or practice viability.

Comment Period Ends September 14

CMS will accept public comments on the proposed rule through September 14, 2026. Comments should reference file code CMS-1848-P.

The complete proposed rule and supporting payment files are available through the CMS 2027 Physician Fee Schedule rule page .

The Bottom Line

The 2027 proposal goes far beyond a routine conversion-factor update. It could change how practices are paid for same-day E/M and procedural services, how visit complexity is reported, who may perform remote monitoring services, and how clinicians participate in Medicare quality reporting.

These provisions remain proposals. Practices should analyze their potential impact now but wait for the final rule and official implementation instructions before changing billing or coding procedures.

This article is provided for educational purposes and is based on the proposed 2027 Medicare Physician Fee Schedule. It does not replace the final rule, Medicare Administrative Contractor guidance, or individualized compliance advice.

By Billing-Coding.com