Brace for impact: CMS announced a reduction to physician fees for CY 2027 that would, in aggregate, lower payments across the board. The conversion factor (CF), one of CMS’ primary ratesetting mechanisms, would drop between 1% and 2% depending on the professional fee setting.
CMS also announced in the proposed 2027 Medicare physician fee schedule, released today, that it may seek an alternative method of calculating fees in a repudiation of the AMA’s valuation system. In fact, the agency questions if it should move away from the CPT code set entirely. Also, CMS is eyeing a revamped system for primary care payments is teasing new codes that are set to come online next year.
First up: Conversion factor cuts
For practices that don’t operate as an alternative payment model (APM), the CF would drop by 1.7% to the amount of $32.8409. For those in APM situations, such as value-based payment models, the CF would fall by a softer margin of 1.2%, to $33.1693.
The separate anesthesia CF also drops across both groups, falling by 1.4% for non-APM participants and 0.9% for those in an APM. The chart below shows the differences between the 2026 CF levels and those that CMS is proposing for CY 2027.
Calculating the proposed CY 2027 PFS conversion factor (CF)
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CY 2027 non-APM CF (proposed)
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CY 2026 non-APM CF
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YTY % change
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$32.8409
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$33.4009
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-1.7%
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CY 2027 Qualifying APM CF (proposed)
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CY 2026 Qualifying APM CF
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YTY % change
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$33.1693
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$33.5675
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-1.2%
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CY 2027 non-APM anesthesia CF (proposed)
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CY 2026 anesthesia CF
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YTY % change
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$20.2143
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$20.4976
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-1.4%
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CY 2027 Qualifying APM anesthesia CF (proposed)
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CY 2026 anesthesia CF
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YTY % change
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$20.4165
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$20.5998
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-0.9%
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Keep watch: New codes on the horizon
In a sneak peek at CPT changes coming in 2027, CMS says practices can expect four new skin cell suspension autograft codes in place of existing codes 15011-15018, which will be deleted, and a new musculoskeletal code for bone tumor cryoablation as well as two codes for intraosseous fiducial marker placement.
In addition, four spinal osteotomy codes, 22210, 22212, 22214 and 22216, will be revised in the CPT manual “to clarify that the codes include complete resection of the interspinous ligament and the entirety of the ligamentum flavum (ie, laminar and subarticular) to allow deformity correction through spinal column realignment,” according to CMS.
Orthopedic practices can also expect a new code for implant of an extra-articular medial shock absorber and a new Category I code for osteochondral acellular scaffold implant in the knee in place of Category III code 0737T.
RFI: CMS questions abandoning the CPT code set, adopting ICD-10-PCS
Citing several alleged problems with the CPT code set, including a monopoly by the AMA and conflict with Make America Healthy Again goals, CMS issued a request for information on whether, and how, the agency could move away from the CPT code set.
The agency asked for input on five topics: The pros and cons of using the ICD-10-PCS code set – an alphanumeric system that uses codes consisting of seven characters; evidence of “harms or challenges associated with AMA’s monopoly over CPT-4 licenses for health care entities”; evidence that creation of CPT codes “follows a process of identification of medical necessity”; and possible alternatives to the AMA’s CPT and RVS Update Committee’s processes.
Revisions to complexity of care payment, coding
You’ll say goodbye to code G2211 and hello to a new modifier that boosts payment for office/outpatient or home/residence E/M code, if CMS finalizes another of its proposed changes.
The agency proposes two modifiers. The first would be for general use and boost the E/M code’s reimbursement by 16%. The descriptor would be a more streamlined “Visit complexity inherent to new or established office/outpatient or home or residence evaluation and management service, associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient's single, serious condition or a complex condition.”
The second modifier would be exclusively for participants in a Shared Savings Program or a Long-term Enhanced ACO Design (LEAD) Model ACO and give a 32% boost to payments for the E/M service.
E/M service + global surgery period procedure = Pay cut
Modifier 25 could trigger a 50% pay cut to one of your services if CMS finalizes one of its proposed changes. The cut would apply when the same physician reports a procedure with a 0, 10 or 90-day global period on the same day as an E/M service. CMS would pay 100% of the most expensive service on that day. It would pay any other surgical or E/M services at 50%.
More practice expense changes coming?
After the dramatic shift in how CMS decided to calculate practice expense relative value units (PE RVU) in 2026, CMS want to know if they chose the correct course of action. Last year, CMS finalized a major site-of-service RVU differential whether operating in a facility or non-facility setting.
Now the agency seeks to understand “whether we should consider an alternative approach to improving assumptions about indirect practice costs, particularly for physicians employed by a hospital, health system, or other entity,” according to a CMS fact sheet.
RFI redux: Primary care redesign?
In a section of the rule titled “Request for Information: Redesigning Primary Care to Make America Healthy Again,” CMS issues a broad call for comments on possible primary care payment changes.
“We are increasingly concerned about the relative undervaluation of primary care services,” the agency says. “We are seeking comment on how to re-imagine and improve the relative valuation of primary care services.” Specifically, the agency seeks to understand how several potential redesigns might play out, across three possible avenues:
- Revaluation of services under the current structure of E/M coding. This may include a restructuring of E/M office visit codes (99202-99215), along with annual wellness visits (G0438-G0439) and care management services. CMS seems particularly keen on E/M office visits: “The current O/O [office/outpatient] E/M code set may still insufficiently reflect differences in the nature and intensity of care provided. As such, we are considering establishing distinct categories of O/O E/M visits in future rulemaking. Potential categories could be longitudinal care, acute care, or consultative visits, with distinctions based on the clinical purpose of the encounter and the associated resource costs of furnishing care,” the agency states.
- Updated payment structure for “technology-enabled care.” This falls more under the service buckets of annual wellness visits and care management services, according to CMS. “We are seeking comment on how technology and clinical AI are impacting primary care, both broadly and more narrowly within the care management codes and the AWV,” the agency states.
- Turning to a prospective payment system. CMS wants to know what commenters think about a primary care-focused prospective payment system in both the Medicare Shared Savings Program (MSSP) and across traditional fee-for-service Medicare.
New rules for remote monitoring proposed
CMs is proposing to require that remote therapeutic monitoring (RTM) services be provided only to established patients, and that providers of both RTM and remote physiological monitoring (RPM) must first perform a separately reportable initiating visit. In addition, CMS is proposing to restrict payment of remote monitoring when provided by clinical staff employed by the practice, not contractors.
The agency is also looking to revalue downward the payment for those services as the cost of devices drops. And the agency is requesting comment on bundling the services and creating four new G codes to describe them in response to recent reports from the HHS OIG.
Quality Payment Program: MVP takes over
CMS is finally announcing a sunset date on traditional MIPS reporting: With the 2029 performance period/2031 MIPS payment year, MIPS Value Pathways (MVP), the reimagining of the program announced in 2020 and developed as an alternative path since then, will be the only way to do it.
MVP will add three new categories – Diabetic Disease, Hypertension and Hospitalist – to the program, the latter two described as aligning “policies in MIPS and APMs [advanced alternative payment models] within the Quality Payment Program with the foundational pillars of MAHA,” which is HHS Secretary Kennedy’s Making America Healthy Again initiative.
CMS is also proposing to add new improvement activities under the "Advancing Health and Wellness" subcategory that “address nutrition, implement lifestyle approaches to disease management, and support patient wellness to ensure a healthier future.”
For 2027, traditional MIPS is still running, and CMS proposes 180 MIPS quality measures, three of which would be “available only for utilization in MVPs.” This involves dozens of changes to remove “low-bar” and topped-out measures.
CMS also proposes the requirement to submit at least one outcome or high priority measure under MIPS be changed to one MVP “core measure” if available. Clinicians in small practices would be exempt.
CMS proposes only minor changes to the Advanced APM track of QPP, including adjustment to full and partial QP (qualifying APM participant) applications to “ensure that only TINs participating in Advanced APMs receive additional incentive payments.”
More risk sought for the Medicare Shared Savings Program
For the MSSP, its signature accountable care model, CMS announces its intention to “strengthen financial incentives for ACOs to participate in the program while mitigating selection issues and benchmark rebasing concerns” and to encourage two-sided risk.
To that end, they offer a “time-limited opportunity to change [ACOs’] final selection between the BASIC track,” which ranges from reward-only to modest risk components, “and ENHANCED track,” which has both significant risk and reward elements.
For example, the shared saving rate for the most risky BASIC track, Level E, would go from 50% to 60%.
Also, CMS proposes to change the regional adjustment for ENHANCED track participants from 50% to 35%, in part because they find that the track is not returning as much in savings to the program as BASIC, requiring that they “rebalance financial incentives across tracks.”
The agency proposes to alter some benchmark mechanics – for example, the “scaling factor” for prior savings adjustment would change from 50% to 75%, and the cap on upward adjustments to the historical benchmark would also be adjusted.
CMS also would make alterations to beneficiary eligibility, which determines which patients’ care factors into an ACO’s shared savings. The agency also proposes to add screening methods and coding for beneficiary assignment via primary care services, including “Vaccine Adverse Effects.”
CMS proposes to abandon the prepaid shared savings payment option, which since 2025 has authorized upfront payment to certain MSSP participants, due to “low uptake”; they propose instead to “offer ACOs the ability to reduce or eliminate Part B cost sharing.”
There are also several proposed changes involving clinical quality measures (CQM). For example, the agency will consider allowing all measures taken by Medicare CQMs to be scored “using flat benchmarks” (that is, unaffected by historical benchmarks).