2027 Medicare Physician Fee Schedule -

2027 Medicare Physician Fee Schedule: What U.S. Physicians and Medical Practices Need to Know

The 2027 Medicare Physician Fee Schedule proposed rule could affect physician reimbursement, E/M billing, practice expenses, remote monitoring, MIPS, interoperability, and revenue-cycle operations. Here is what U.S. physicians and medical practices should understand before the final rule.

The Medicare Physician Fee Schedule (PFS) is entering another important period of change.

On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released its Calendar Year (CY) 2027 Medicare Physician Fee Schedule proposed rule, outlining proposed changes to Medicare Part B payment policies and related physician-practice requirements. The proposal covers physician reimbursement, evaluation and management (E/M) services, practice expense methodology, remote physiologic and remote therapeutic monitoring, quality reporting, interoperability, accountable care, primary care payment, and other areas affecting medical practices.

The public comment period closed on September 14, 2026. As of October 1, 2026, the 2027 PFS provisions discussed in this article remain proposed, not final. CMS is expected to issue the final rule before the major provisions scheduled to take effect on January 1, 2027. The final policy could differ from the proposals described below.

For physicians, practice administrators, billers, coders, revenue-cycle teams, and healthcare organizations, the significance goes beyond the headline conversion factor.

The proposed rule could change how certain services are valued, documented, coded, billed, and monitored. That makes 2026 an important preparation period for practices that depend substantially on Medicare reimbursement.

What Is the Medicare Physician Fee Schedule?

The Medicare Physician Fee Schedule (MPFS) is the system CMS uses to establish payment rates for many services provided by physicians and other eligible healthcare professionals to Medicare beneficiaries.

Under the PFS, services are generally valued using Relative Value Units (RVUs). CMS considers several components, including:

Work RVUs — physician work and clinical decision-making involved in a service
Practice Expense (PE) RVUs — resources required to furnish the service
Malpractice RVUs — professional liability costs
Geographic Practice Cost Indices (GPCIs) — geographic adjustments
Conversion factor — the dollar conversion applied to the applicable RVUs

The basic payment calculation can therefore be simplified as:

Medicare payment ≈ [(Work RVU + Practice Expense RVU + Malpractice RVU) × Geographic adjustments] × Conversion Factor

Actual Medicare payment calculations are more complex and depend on the service, setting, locality, modifiers, multiple-procedure rules, and other applicable policies.

CMS explains that PFS payments have been based on relative resources and conversion factors since the physician fee schedule was established in 1992.

For medical practices, this means that a change in the conversion factor is only one part of the reimbursement equation. Changes to RVUs, coding policies, practice-expense methodology, and service-specific valuation can also influence reimbursement.

What Is Changing in the 2027 Medicare Physician Fee Schedule Proposal?

Several provisions deserve particular attention from physicians and medical practice leaders.

1. Proposed 2027 Medicare Conversion Factors

One of the most immediately relevant issues is the proposed Medicare conversion factor.

Beginning in 2026, Medicare has two statutory conversion factors:

One for qualifying Alternative Payment Model (APM) participants
One for physicians and practitioners who are not qualifying APM participants

For 2027, CMS proposes:

Category	Proposed 2027 Conversion Factor	Approximate Change From 2026
Qualifying APM participants	$33.17	-1.19%
Non-qualifying APM participants	$32.84	-1.68%

CMS says the proposed changes reflect statutory updates, including the expiration of the temporary 2.5% increase that applied to the 2026 PFS conversion factor, along with other adjustments.

These figures are proposed, not final.

More importantly, physicians should not interpret the conversion-factor percentage as a uniform reduction across every service. Individual service payments can move differently because CMS is simultaneously proposing changes to work RVUs, practice-expense methodology, coding, and other payment policies.

Why this matters to medical practices

Practices should model the potential impact at the service and specialty level, rather than applying the conversion-factor percentage across total annual Medicare revenue.

For example, a practice should examine:

Medicare allowed charges by CPT/HCPCS code
Medicare volume by service
Work RVUs
Practice-expense RVUs
Modifier utilization
E/M distribution
Global surgical services
Remote monitoring revenue
APM participation
Medicare payer mix
Denial and underpayment patterns

This is where revenue-cycle analytics can become especially valuable.

2. Same-Day E/M Services and Global Procedures

One of the most consequential proposals for many physician practices concerns evaluation and management (E/M) services performed on the same day as procedures with global periods.

CMS proposes that when a separately identifiable office/outpatient E/M service is furnished by the same physician—or a physician in the same practice—on the same day as a procedure with a 0-, 10-, or 90-day global period:

The more expensive service would be paid at 100%.
Other applicable surgical procedure(s) or E/M service(s) on that day would be paid at 50%.

This is a proposed policy and could change before the final rule.

The proposal is particularly important for specialties and practices that frequently report both procedural services and separately identifiable E/M services.

What practices should review

Before the final rule, organizations can analyze historical claims involving:

Modifier 25
Office/outpatient E/M codes
0-day global procedures
10-day global procedures
90-day global procedures
Same-day E/M and procedure combinations
Medicare allowed amounts
Denials and payment adjustments

A historical claims analysis can help practices estimate which service combinations could be affected if the proposed policy is finalized.

3. Proposed Changes to G2211

CMS is also proposing changes to the office/outpatient E/M visit complexity add-on code G2211.

G2211 was implemented for payment beginning in 2024/2025 policy implementation and is intended to recognize the additional complexity associated with certain longitudinal patient relationships.

For 2027, CMS proposes converting G2211 from a separate add-on code into a modifier structure.

Under the proposal:

One proposed modifier would increase the associated E/M payment by 16%.
A second proposed modifier would be available to certain practitioners participating in specified accountable care models and would increase the associated E/M payment by 32%.

The proposed ACO-related modifier is designed to recognize additional resources associated with longitudinal care, total-cost-of-care accountability, and quality reporting.

This could have implications for:

Primary care
Internal medicine
Family medicine
Chronic disease management
Accountable care organizations
Medicare Shared Savings Program participants

Practices should therefore monitor the final rule closely before changing production billing workflows.

4. Remote Patient Monitoring Could See Significant Changes

Remote monitoring remains another important area.

CMS currently pays for Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) services under the PFS.

For 2027, CMS proposes several changes, including:

Requiring RTM services to be furnished only to established patients
Requiring a separately reportable initiating visit associated with the start of RPM or RTM
Limiting payment to RPM/RTM services performed by clinical staff employed by the practice rather than contractors
Revaluing certain services based on updated assumptions regarding device costs
Considering whether RPM and RTM codes should be bundled into four new HCPCS G-codes

CMS says the proposals respond in part to recommendations from recent Office of Inspector General reports concerning the current coding structure.

For practices that have built programs around RPM or RTM, the issue is therefore not simply coding.

It can affect the economics and operational structure of the entire program.

Practices should evaluate

Before 2027, organizations using RPM or RTM should examine:

Patient eligibility
Established-patient status
Device costs
Clinical staff utilization
Contractor arrangements
Enrollment rates
Monthly billing volume
Claim acceptance rates
Denials
Documentation completeness
Revenue per enrolled patient
Cost per monitored patient

This type of analysis can help organizations understand how potential policy changes could affect program sustainability.

5. CMS Is Proposing Changes to Practice-Expense Methodology

Another technically important part of the proposal concerns Practice Expense (PE).

Practice expense is a major component of physician payment because providing healthcare requires much more than physician labor.

Medical practices must pay for:

Clinical staff
Administrative staff
Facilities
Equipment
Supplies
Technology
EHR systems
Billing infrastructure
Compliance
Malpractice coverage
Other operational resources

CMS says it is pursuing a multi-year effort to reduce reliance on older specialty-specific practice-expense-per-hour data and move toward more objective, routinely updated and auditable cost information.

The proposed methodology would phase out part of the existing approach and introduce a practice-expense stabilizer intended to reduce short-term volatility.

Why this matters

Changes in practice-expense methodology can redistribute payment across services and specialties.

That means a practice should not evaluate the proposed 2027 PFS exclusively through the headline conversion-factor change.

A more sophisticated analysis looks at:

CPT/HCPCS volume → RVU changes → payment changes → specialty impact → Medicare revenue impact

This is particularly relevant for organizations with large multispecialty operations.

6. MIPS and MIPS Value Pathways Are Moving Toward Another Transition

The Quality Payment Program (QPP) remains an important part of Medicare physician participation.

The 2027 proposal includes changes involving:

Merit-based Incentive Payment System (MIPS)
MIPS Value Pathways (MVPs)
Advanced Alternative Payment Models (APMs)
Quality reporting
Promoting interoperability

CMS is proposing to move away from traditional MIPS reporting and toward a broader MVP-based structure beginning later in the transition period.

The eCQI Resource Center reports that CMS proposed sunsetting the traditional MIPS reporting option after the 2028 performance year, while introducing three new MVPs for the 2027 performance year related to diabetes, hypertension, and hospitalists and modifying previously finalized MVPs.

The proposed changes therefore matter particularly to:

Small practices
Independent physicians
Specialty practices
ACO participants
Clinicians participating in MIPS
Practices building quality-reporting infrastructure

7. Interoperability and Electronic Prior Authorization Remain Connected to Physician Workflow

Although the 2027 PFS proposal covers many payment policies, interoperability remains a major operational issue for physician practices.

CMS has separately been advancing electronic prior authorization and FHIR-based interoperability.

In 2026, CMS announced an Electronic Prior Authorization Acceleration initiative, involving healthcare organizations, EHR developers, physician practices, networks, digital-health developers, and major payers.

CMS said the initiative is intended to reduce dependence on manual processes such as fax and payer portals, improve authorization-status visibility, and address workflow and technical barriers ahead of 2027 requirements.

This is significant because the administrative burden associated with prior authorization remains substantial.

The AMA’s 2025 physician survey found that physicians reported an average of 40 prior authorization requests per week, with prior authorization consuming an average of 13 hours of physician and staff time each week. The survey also found that 94% of surveyed physicians said prior authorization contributes to burnout.

CMS has also proposed expanding FHIR-based standards for prior-authorization-related transactions and attachments in a separate 2026 rulemaking effort.

For medical practices, this means interoperability is increasingly becoming an operational and revenue-cycle issue—not simply an IT issue.

8. AI Is Becoming Part of Physician Practice Operations

Artificial intelligence is another major development affecting physicians and medical practices.

An American Medical Association survey published in March 2026 found that 81% of physicians surveyed reported using AI professionally, more than double the rate reported when the AMA first surveyed physicians on health AI in 2023. Reported uses included summarizing medical research, creating discharge instructions, documenting visits, and other activities.

This growing adoption has implications for:

Clinical documentation
Ambient documentation
Medical coding
Revenue-cycle workflows
Prior authorization
Claims review
Denial management
Patient communication
Clinical decision support
Data analysis

However, AI should not automatically be treated as a substitute for clinical or billing oversight.

Recent industry discussions have also raised questions about AI-assisted coding and claims accuracy. For example, Reuters reported in September 2026 on a Blue Cross Blue Shield Association analysis concerning increased identification and billing of secondary conditions after adoption of AI tools. The findings have prompted debate about whether AI-supported coding can increase inappropriate or unsupported reimbursement claims.

For providers, the practical lesson is important:

AI implementation should be accompanied by documentation controls, coding validation, audit processes, compliance safeguards, and measurable outcomes.

Automation without oversight can simply move errors faster.

9. Primary Care and Preventive Care Are Receiving Greater Attention

CMS is also soliciting input on how Medicare could redesign primary-care valuation.

The agency specifically requested comments concerning:

Relative payment for primary care
The payment implications of technology in primary care
Prospective primary-care payment within the Medicare Shared Savings Program and potentially Original Medicare more broadly

CMS stated that the objective is to shift healthcare toward prevention rather than exclusively reactive treatment.

This direction is important for practices managing patients with chronic conditions.

Three-quarters of U.S. adults have at least one chronic condition, according to CMS’s proposed-rule discussion, while more than half have two or more.

As healthcare payment continues to evolve, medical practices may increasingly need to demonstrate not only that services were provided, but also that they can manage populations, coordinate care, document outcomes, and control avoidable costs.

10. Duplicate Testing and Interoperability Are Also on CMS’s Radar

Another noteworthy part of the proposed rule is CMS’s request for information concerning duplicate laboratory testing, diagnostic imaging, result sharing, and interoperability.

CMS notes that laboratory and imaging results can remain siloed in different EHR environments. When providers cannot access results generated elsewhere, patients may undergo duplicate testing and clinicians may lack information needed for timely care management.

This is both a clinical and financial issue.

Duplicate testing can contribute to:

Additional healthcare spending
Unnecessary radiation exposure
Delayed treatment
Fragmented care
Administrative work
Duplicate claims
Data-management challenges

Improving interoperability therefore has implications beyond health IT.

It can influence utilization, documentation, patient safety, and healthcare economics.

What Should Physician Practices Do Now?

The 2027 PFS is not final, so practices should avoid making irreversible billing changes based solely on the proposed rule.

However, organizations can begin preparing through scenario analysis.

1. Build a Medicare revenue baseline

Analyze at least the previous 12 months of:

Medicare claims
Allowed amounts
CPT/HCPCS codes
RVUs
E/M services
Modifiers
Specialty
Provider
Location
Denials
Underpayments
Adjustments

This creates a baseline against which proposed 2027 changes can be modeled.

2. Identify high-impact CPT/HCPCS codes

Do not treat every service equally.

Identify the codes responsible for the largest share of Medicare revenue and examine whether they are affected by proposed:

RVU changes
E/M policies
Global-period policies
Practice-expense methodology
RPM/RTM changes
Coding revisions
Modifier policies

A relatively small group of high-volume services can have a disproportionate effect on practice revenue.

3. Review Modifier-25 utilization

Practices that frequently report E/M services with procedures should identify historical claims involving Modifier 25 and global-period procedures.

The objective is not simply to change coding behavior.

Instead, practices should determine:

Which services are routinely billed together?
Which claims are paid?
Which are denied?
What documentation supports separate E/M services?
Which services could be affected if the proposed policy is finalized?

Coding decisions should remain based on applicable Medicare rules and documentation—not revenue objectives.

4. Analyze RPM and RTM economics

If your practice provides remote monitoring, model several scenarios.

For example:

Current revenue → proposed payment changes → staffing costs → technology costs → contractor costs → net program economics

This is more useful than looking at reimbursement alone.

5. Strengthen documentation and coding quality

The convergence of AI, changing payment rules, interoperability, and increasingly sophisticated payer analytics makes documentation quality increasingly important.

A strong documentation and coding process should support:

Medical necessity
Accurate diagnosis coding
Appropriate E/M level
Correct modifiers
Complete claim information
Supporting documentation
Compliance with payer requirements

The Revenue-Cycle Implications of the 2027 PFS

For healthcare organizations, the 2027 PFS should not be viewed exclusively as a physician-payment issue.

It is also an RCM issue.

Changes in Medicare payment policies can affect the entire revenue cycle:

Documentation → Coding → Charge Capture → Claim Submission → Adjudication → Payment → Denial Management → A/R → Reporting

A practice can have accurate coding and still experience revenue leakage if claims are not submitted correctly, payments are not reconciled, or underpayments are not identified.

This is why medical practices should monitor:

Clean Claim Rate

The percentage of claims submitted without errors that result in avoidable rejections or delays.

Denial Rate

The percentage of claims denied by payers and requiring correction, appeal, or other action.

Days in A/R

The average number of days required to collect outstanding accounts receivable.

Net Collection Rate

The percentage of collectible revenue that the practice actually collects.

Underpayment Rate

The frequency with which payer reimbursement falls below the expected contracted or allowed amount.

A/R Aging

The distribution of outstanding receivables by aging categories, such as:

0–30 days
31–60 days
61–90 days
91–120 days
120+ days

Monitoring these indicators can help practices identify whether reimbursement-policy changes are translating into actual financial effects.

Why Data Analytics Matters More as Payment Rules Become More Complex

A physician practice cannot effectively manage changing reimbursement policies using spreadsheets alone when the organization has significant claim volume and multiple specialties.

Healthcare analytics can connect:

Payer + CPT + Provider + Specialty + Location + RVU + Denial + Payment + A/R

This allows organizations to answer questions such as:

Which Medicare services generate the greatest revenue?
Which codes may be affected by proposed RVU changes?
Which providers have the highest denial rates?
Where are payment variances occurring?
Which claims are aging beyond expected collection periods?
Which payers generate repeated documentation requests?
Which services have unusually high adjustment rates?
How could proposed payment changes affect annual Medicare revenue?

The goal is not simply to collect more data.

The goal is to convert claims and reimbursement data into actionable practice-management intelligence.

2027 Medicare PFS: What Physicians Should Watch Next

As of October 1, 2026, the 2027 Medicare Physician Fee Schedule remains a proposed rule.

The public comment period closed September 14, and the industry is now awaiting CMS’s final rule. AMA reporting in September indicated that physician organizations had submitted extensive comments and were seeking changes to several proposed policies.

The final rule should therefore be treated as the next major checkpoint.

Medical practices should specifically watch for final decisions involving:

Medicare conversion factors
Same-day E/M and global-period payment
Modifier-25-related policies
G2211
Practice-expense methodology
RPM and RTM
MIPS and MVPs
Interoperability
Electronic prior authorization
APM participation
Primary-care payment
Quality reporting
Coding and valuation changes

Until CMS publishes the final rule, practices should avoid treating the proposed provisions as final Medicare payment policy.

Frequently Asked Questions

What is the 2027 Medicare Physician Fee Schedule?

The CY 2027 Medicare Physician Fee Schedule is CMS’s proposed framework for Medicare physician and practitioner payments and related Part B policies beginning in 2027. CMS released the proposed rule on July 14, 2026.

Will Medicare physician payments decrease in 2027?

CMS proposed conversion factors of $33.17 for qualifying APM participants and $32.84 for non-qualifying APM participants. These represent proposed decreases from the respective 2026 conversion factors. However, individual service payments can vary because RVUs and other payment policies are also changing, and the proposed rule is not yet final.

What is the proposed 2027 Medicare conversion factor?

CMS proposed a conversion factor of $33.17 for qualifying APM participants and $32.84 for non-qualifying APM participants for 2027.

What is CMS proposing for same-day E/M services?

CMS proposes that when a separately identifiable office/outpatient E/M service is provided on the same day as certain global-period procedures, the most expensive applicable service would be paid at 100% and other applicable services would be paid at 50%. This remains a proposal and could change in the final rule.

Will RPM and RTM change in 2027?

CMS has proposed several changes affecting remote physiologic monitoring and remote therapeutic monitoring, including requirements concerning established patients, initiating visits, clinical staff employment, service valuation, and possible code bundling.

What should medical practices do before 2027?

Practices should analyze Medicare claims, high-volume CPT/HCPCS codes, E/M services, modifiers, denials, payment variances, A/R, RPM/RTM activity, and quality-reporting requirements. Scenario modeling can help practices understand potential financial and operational effects before the final rule takes effect.

Conclusion

The 2027 Medicare Physician Fee Schedule proposed rule is more than a discussion about a Medicare conversion factor.

It represents a broader set of potential changes affecting physician reimbursement, E/M coding, practice expenses, remote monitoring, quality reporting, interoperability, accountable care, primary care, and revenue-cycle operations.

For physicians and medical practices, the most useful response is preparation based on data rather than assumptions.

A practice that understands its Medicare revenue by service, provider, specialty, CPT code, denial category, payment variance, and A/R status will be better positioned to evaluate the operational implications of the final policy.

The key message is straightforward:

Know your numbers before the rules change.

Monitor the final CMS rule, model the effect on high-volume services, review documentation and coding workflows, and use revenue-cycle analytics to identify where reimbursement changes may translate into actual financial impact.

The 2027 payment environment will not be determined by the conversion factor alone. It will be shaped by the interaction between coding, documentation, RVUs, practice expenses, quality programs, technology, payer processes, and revenue-cycle performance.

For physician practices, that makes 2026 the right time to understand the baseline—and prepare for what comes next.

Sources and References

Centers for Medicare & Medicaid Services (CMS). Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule. July 14, 2026.
Centers for Medicare & Medicaid Services (CMS). CMS-1848-P: CY 2027 Payment Policies under the Medicare Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies.
American Medical Association (AMA). 2027 proposed Medicare fee schedule: What physicians need to know. September 4, 2026.
AMA. AMA survey: Prior authorization reform pledge falls short with physicians. May 13, 2026.
AMA. More than 80% of physicians use AI professionally: AMA survey. March 12, 2026.
CMS. CMS Announces Early Adopters to Advance Solutions for Electronic Prior Authorization, Accelerating Momentum Ahead of 2027 Requirements. May 13, 2026.
CMS. 2026 CMS Interoperability Standards and Prior Authorization for Drugs Proposed Rule. 2026.
eCQI Resource Center. Calendar Year 2027 CMS PFS Proposed Rule. July 16, 2026.
American Hospital Association (AHA). AHA Comments on CMS’ Interoperability and Prior Authorization Proposed Rule. June 15, 2026.
American Hospital Association (AHA). Lowering Health Care Costs for All Americans: An Examination of the U.S. Provider Landscape. March 17, 2026.

Editorial note: This article discusses the CY 2027 Medicare Physician Fee Schedule as proposed by CMS as of October 1, 2026. Proposed provisions may be modified, withdrawn, or not finalized. Medical practices should consult the final CMS rule and applicable Medicare guidance before changing billing, coding, compliance, or reimbursement workflows.