CY 2027 Physician Fee Schedule Proposed Rule Released
On Tuesday, July 14, 2026, the Centers for Medicare and Medicaid Services (CMS) posted the CY 2027 Medicare Physician Fee Schedule (PFS) Proposed Rule. Key proposals include updates to the Medicare physician conversion factor (CF), payment policy changes for reporting evaluation and management (E/M) services on the same day as a global surgical code, reporting and payment policy changes for G2211 (E/M complexity add-on code), and the sunsetting of the Merit-based Incentive Payment System (MIPS) in 2029.
2027 Conversion Factors: Experience Modest Reductions Due to Expiration of 1-Year Patch
$33.1693 (2027 Qualifying APM Participant) and $32.8409 (All Other Clinicians)
2027 marks the second year that CMS has released two CFs, as required by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.
The proposed CY 2027 CF of$33.1693 applies to those who qualify under the Advanced Payment Model (APM) participation criteria. By statute, APM-qualified clinicians receive a 0.75% update.
A lower proposed CY 2027 CF of $32.8409 applies to all other clinicians. By statute, clinicians who do not qualify for the APM qualifying CF will receive a 0.25% update.
Three factors impacted the 2027 Medicare CF.
Expiration of a 1-year (+)2.5% increase approved by Congress for 2026. (negative impact)
MACRA annual update of (+)0.75% for Qualifying APM participants or (+)0.25% for all others (positive impact).
A 2027 RVU budget neutrality adjustment of (+)0.53%. This adjustment preserves budget neutrality and reflects year-over-year spending changes. (positive impact)
Despite the positive impact of the annual update required by statute and the positive RVU budget-neutrality adjustment for 2027, these factors were insufficient to offset the impact of the expiration of the 1-year patch.
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Key Proposals
CMS is proposing several measures that would significantly affect reimbursement and quality reporting. Key proposals are briefly outlined below. This is not a complete list of the proposals in the rule.
Payment reduction for E/M services reported on the same day as another service: CMS proposes to reduce payment when an E/M service is reported on the same day as a 0-, 10-, or 90-day global service. Under the proposal, the most expensive service would be paid at 100%, and all other services furnished on the same day would be paid at 50%.
Currently, with a modifier and appropriate documentation, clinicians can be reimbursed for both services.
E/M visit complexity add-on (HCPCS code G2211): transition to a modifier and change in payment structure.G2211 provides additional payment to capture the additional work of an E/M code when caring for more complex patients. CMS proposes transitioning from reporting a separate code (G2211) to reporting a modifier appended to the associated E/M code. Additionally, CMS proposes bundling the payment into the payment for the E/M code. CMS proposes to increase the payment for the associated E/M code by 16%, rather than paying the same rate across all E/M codes.
In 2026, G2211 was assigned 0.52 wRVUs. Based on Table AD-7 in the proposed rule, in 2026 this meant that the addition of the payment for G2211 reflected a 29% increase in value for the lowest-level E/M code (99212) and a 9% increase in value for the highest-level E/M code (99215).
Changes to criteria and valuation for reporting remote monitoring: CMS is proposing that the service be provided only to established patients and not by contractors. CMS is also proposing to update the valuation of these services.
Many medical practices hire contractors to manage remote monitoring services, so this proposal could affect these relationships. Valuing remote monitoring services requires identifying the specific technology and the duration it was used to provide the service. Identifying these inputs has been very complex and challenging.
Changes to the methodology for calculating practice expense (PE) RVUs: CMS is proposing multiple changes to the calculation of PE RVUs. This is a highly technical and complex proposal. Its overall impact will likely vary across the fee schedule.
Historically, CMS has relied on data from the American Medical Association to calculate PE RVUs. The agency has indicated that it plans to phase out its reliance on this data. It states that it is seeking an “approach that relies on more objective, routinely updated and auditable cost data.”
Request for information (RFI): CMS seeks comments on how to improve the valuation of primary care services and the accuracy of payment for global surgical services (e.g., services that include follow-up visits in the overall value of the service). The agency also seeks comments on improving the sharing of laboratory tests, imaging, and their results, which it views as siloed and in need of reform.
None of the topics in the RFIs is surprising. In public comments and regulatory language, the agency has made it clear that improving primary care payment is a priority. For years, the agency has struggled to reform payment for global surgery codes. Finally, improving interoperability across both Medicare and Medicaid has also been a stated goal of the agency.
Sunsetting of the Merit-based Incentive Payment System (MIPS): CMS proposes to sunset traditional MIPS reporting in 2029 and transition clinicians to what the agency describes as “more clinically meaningful, specialty-focused” MIPS Value Pathways (MVPs).
In 2022, when MVPs were first introduced, CMS had proposed sunsetting MIPS by 2027 or 2028. This current proposal has a much more aggressive timeline.
Comments are due on September 14, 2026.
A fact sheet summarizing the proposed rule is available HERE. A press release on the proposed rule is available HERE.
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For more information and questions, please contact:
Sheila Madhani
Madhani Healthcare Consulting
Email: smadhani@madhani-health.com
Tel: (202) 679-2977