2027 Medicare Physician Fee Schedule: What Changed in the Final Rule

Under the proposal, physicians may receive less payment for office visits performed on the same day as a procedure. It also proposes changes to remote monitoring staffing rules, quality reporting measures, and participation requirements.

These changes in the 2027 Medicare Physician Fee Schedule proposed rule are among those physicians and billing leaders should assess before planning next year’s operations.

The Centers for Medicare & Medicaid Services (CMS) released the proposal on July 14, 2026. Many provisions would begin on or after January 1, 2027, if finalized; others follow later schedules.

Lower Payments Proposed for Same-Day E/M Visits

CMS proposes paying less for a separately identifiable office or outpatient evaluation and management (E/M) visit when it takes place on the same day as a procedure. The proposal covers procedures with a 0-, 10-, or 90-day global period when the same physician provides both services, or when different physicians in the same practice provide them.

Under the proposal:

• The highest-valued affected service would receive 100% payment.
• Other affected procedures or E/M services would receive 50% payment.

This would not halve reimbursement for the entire encounter. Either the visit or a procedure could receive the reduction, depending on the services’ relative values.

Why Modifier 25 Matters

Modifier 25 identifies a significant, separately identifiable E/M service that goes beyond the care normally included in a same-day procedure.

The American Medical Association (AMA) opposes the proposed cut because, it says, payment calculations already account for shared resources. The AMA wants CMS to review individual services before making a broader cut.

Practices that regularly combine evaluation and treatment in one appointment should assess their financial exposure using actual service combinations.

Maternity Coding: New CPT Structure, Separate Payer Decisions

CMS proposes using the revised maternity care codes in the 2027 Current Procedural Terminology (CPT) code set. These codes would replace the existing global packages with more detailed reporting.

CMS also asked whether HCPCS G-codes should preserve the older global billing approach. The AMA supports the revised CPT structure and opposes keeping both systems, saying this could be confusing.

Code changes do not automatically change or affect payment rules. Medicaid programs and commercial insurers may follow different implementation plans, so maternity practices should check each payer’s instructions.

Remote Monitoring: Proposed Staffing and Payment Changes

The proposal could change staffing and reimbursement rules for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM).

Patient Eligibility and Staffing

CMS proposes requiring practitioners reporting RPM or RTM to furnish a separately reportable initiating visit when monitoring begins.

CMS proposes limiting RTM to established patients, consistent with the existing RPM approach. It also proposes restricting payment for applicable clinical-staff services to personnel employed by the practice, excluding services delivered by contractors.

For practices using outsourced monitoring teams, the central question is who performs each billable activity and whether that arrangement would satisfy the final requirements.

Service Valuation and Alternative Codes

CMS proposes lowering practice-expense relative value units (RVUs) for several monitoring services and removing direct practice costs from treatment-management codes.

Applicable reductions for existing codes may be phased in under statutory limits. Separately, CMS considered combining RPM and RTM reporting into four HCPCS G-codes.

The AMA warns that this alternative could reduce coding detail and allow significant reductions without the same phase-in protection. It has urged CMS to delay the changes pending further review through the AMA/Specialty Society Relative Value Scale Update Committee.

MIPS and MVPs: What Would Change?

The Merit-based Incentive Payment System (MIPS) connects clinician performance with future Medicare payment adjustments.

One important baseline is already finalized: the threshold for avoiding a negative adjustment remains 75 points through the 2028 performance year, corresponding to the 2030 payment year.

Core Quality Measures

CMS proposes replacing the outcome or high-priority measure requirement with a core measure requirement for traditional MIPS and MIPS Value Pathways (MVPs).

The proposal includes a small-practice exemption and an attestation option for clinicians without an applicable core measure. The AMA emphasizes that measure selection should reflect physicians’ clinical scope.

Mandatory MVP Reporting

CMS plans to phase out traditional MIPS in favor of MVPs by 2029. The AMA is pushing back on a mandatory switch, pointing out that some specialties still have no MVP to report through and that practices would be doing a lot of reporting work either way.

Interoperability and Electronic Prior Authorization

CMS proposes easing some MIPS Promoting Interoperability requirements. These include requirements for certified electronic health record technology (CEHRT), surveillance attestations, and reporting on the Security Risk Analysis.

Removing the reporting measure would not remove security risk analysis and risk-management obligations under the HIPAA Security Rule.

The proposed electronic prior authorization (ePA) schedules differ:

Measure	Proposed Timing
Medical-service ePA	Optional for the 2027 performance year, with an opportunity for 10 bonus points; mandatory in 2028, subject to applicable requirements and exclusions
Prescription-drug ePA	Begins in the 2028 performance year, with specified exclusions

Practice-Expense Changes Could Affect Payments by Specialty

CMS proposes removing specialty-level indirect practice cost indices and using physician work RVUs and clinical labor to allocate indirect practice expenses. Services with 10- and 90-day global periods would have exceptions.

The proposed 5% stabilization adjustment applies to changes in practice-expense RVUs for eligible services. It does not cap all Medicare payment changes at 5%.

The AMA has asked for more details and an analysis of the effects. Since the impact could vary by specialty, practices should review the codes they bill most often to see how their payments could change.

Advanced APMs: Benefits Could Depend on the Billing TIN

Under the CMS proposal, financial benefits for qualifying participation in an Advanced Alternative Payment Model (APM) would apply only to claims billed under participating tax identification numbers (TINs).

Physicians billing through multiple organizations could therefore receive different treatment across their billing entities.

The AMA opposes the restriction, raising concerns about administrative complexity, statutory authority, and future participation.

Shared Savings Program: More Flexibility and Changes to Patient Costs

CMS proposes giving accountable care organizations (ACOs) more flexibility in how they use CEHRT and report quality measures. The proposal would also allow certain patient out-of-pocket costs to be reduced or waived when program conditions are met.

Other provisions would revise beneficiary assignment and financial benchmarks. A proposed growth adjustment would encourage recruitment of additional practices, including rural, small, and independent organizations.

The AMA supports several proposals that offer more flexibility but wants a closer review of changes that could discourage participation. The cost-sharing proposal would not let practices waive patient balances outside the program’s rules.

Ambulatory Specialty Model: Broader Concerns Remain

CMS proposes technical refinements to the Ambulatory Specialty Model, including an exemption process for certain cardiology subspecialists.

Other changes would calculate administrative claims-based quality measures at the individual clinician level, even when practices report quality measures as a group.

The AMA still opposes mandatory participation, citing financial risk and comparisons made without performance targets set in advance. The potential first-year payment reductions of up to 9% it cites relate to the model, rather than Medicare payments for all specialists.

Frequently Asked Questions

What Should Practices Do Before January 1?

Keep billing under current rules through December 31, then apply the finalized policies to dates of service on or after January 1, 2027. Model the 0-day global E/M reduction against your own service pairs, and confirm your remote monitoring arrangements against the 2027 requirements — not the 2029 staffing rule, which is still two years out.

Would Prescription-Drug ePA Be Required for Every Prescription?

The proposed measure only asks practices to attest that they’ve handled at least one qualifying prescription-drug authorization, and certain exclusions apply. It doesn’t cover every prescription.

What This Means for Your Practice

• Bill under current Medicare rules through December 31. Use the proposals as a planning tool, and confirm final requirements and effective dates before changing any claims, staffing arrangements, or reporting workflows.
• Review your most common same-day E/M and procedure pairs, estimate the impact on collections from the proposed cut, and make sure your documentation supports every modifier 25.
• If your practice bills RPM or RTM, identify who performs each service. Review initiating visits, employee and contractor arrangements, and service costs against the final requirements before changing vendor contracts.
• Engage your quality-reporting lead and EHR vendor to assess applicable core measures, MVP options, and electronic prior authorization capabilities. Keep proposed reporting changes separate from existing HIPAA security obligations.
• For maternity services, confirm each payer’s implementation instructions. For Advanced APM participation, confirm which billing TINs participate rather than assuming every entity is treated the same.
• Assign someone to compare the final rule with your preparation plan and coordinate necessary updates. BillingFreedom’s medical billing services and revenue cycle management support help practices review coding, claims, and billing performance. Email info@billingfreedom.com to discuss your practice’s preparation.

Resources for Further Reading

The following resources provide additional information about the fee schedule and related topics.

• CMS: Overview of the proposed 2027 physician fee schedule
• Federal Register: Full proposed rule for 2027
• AMA: What the 2027 proposal could mean for physicians
• AMA: Detailed summary of the proposed rule