On July 14, 2026, the Centers for Medicare and Medicaid Services (CMS) released the 2027 Physician Fee Schedule Proposed Rule (Proposed Rule), which outlines proposed changes to payments under the Medicare Physician Fee Schedule (PFS) and other Medicare Part B policies effective in 2027. Among other changes, the Proposed Rule details significant reimbursement updates for next year, including:[1]
- Separate Conversion Factors: As introduced in 2026, CMS will continue to maintain separate conversion factors for alternative payment model (APM) qualifying participants (QPs) and providers who are not QPs.
- Overall Decrease: The non-qualifying APM conversion factor for 2027 is proposed to be $32.84, a 1.68% decrease from the current conversion factor. The qualifying APM conversion factor for 2027 is proposed to be $33.17, a 1.19% decrease. The proposed reductions primarily reflect the expiration of the one-year 2.50% statutory conversion factor increase that applied to CY 2026.
- Impact by Specialty: While reimbursement under the Medicare PFS as a whole is expected to decline, the anticipated impact by specialty and by place of service varies substantially:[2]
- Evaluation and Management (E/M) Complexity Add-On: In 2025, CMS implemented an E/M add-on code (G2211) for higher complexity visits. CMS proposes to replace this add-on code with a modifier that would increase payment for the associated E/M code by 16% (as opposed to the current flat rate).
- Reduce Payment for E/M Visits during Global Periods: CMS proposes to reduce payment when a separately identifiable office/outpatient E/M visit is furnished by the same physician or practice on the same day as a global procedure. Under the proposal, the higher-valued service would be paid in full and the lower-valued service would be paid at 50%.
- Reforming Practice Expense Methodology: CMS proposes broad changes to the practice expense methodology, including a shift away from the current surveys relied upon produced by the American Medical Association (AMA) and reducing reliance on specialty-specific practice expense per hour data. CMS notes that this transition would be a multi-year process, with the intention being to utilize more objective, auditable cost data that is routinely updated
While not yet finalized, the Proposed Rule is likely to receive close scrutiny from healthcare operators given the proposed decline in conversion factors after several years of reimbursement pressure and elevated operating costs.
CMS is soliciting comments from the public on the Proposed Rule before finalizing changes later this year.
References
[1] Calendar Year 2027 Medicare Physician Fee Schedule Proposed Rule Fact Sheet
[2] Calendar Year 2027 Medicare Physician Fee Schedule Proposed Rule
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