On July 14, the Centers for Medicare & Medicaid Services (CMS) released the 2027 Physician Fee Schedule Proposed Rule, introducing several significant coding and payment changes. One of the biggest updates involves the conversion factor, which last year was divided into two categories: one for Qualifying Alternative Payment Model (QP) participants and another for non-QP participants. While the statute continues to require a 0.75% update for QPs and a 0.25% update for non-QPs, the temporary 2.50% increase established under the Working Family Tax Cut (WFTC) expires at the end of 2026. As a result, the proposed 2027 conversion factor would decrease to $33.17 for QPs (a 1.19% reduction) and $32.84 for non-QPs (a 1.68% reduction).
CMS is proposing a significant change to Modifier -25, used to report a significant, separately identifiable E/M service on the same day as another procedure or service, and Modifier -57, which identifies an E/M service resulting in the initial decision to perform major surgery. CMS believes that the combination of E/M services and procedures on the same date of service may overvalue physician work and result in duplicative payment. Under the proposal, the highest-valued service—either the E/M visit or surgical procedure—would be reimbursed at 100%, while all additional E/M services or procedures performed on the same day would be reimbursed at 50%.
The complexity add-on code G2211 would likely transition to a modifier (MOD1) appended to an E/M code. Instead of paying a flat amount, the modifier would increase the value of the associated E/M service by 16%, maintaining a consistent percentage increase across all applicable E/M codes. A second modifier (MOD2) would be available only to practitioners participating in a Shared Savings Program ACO or Participant Providers in a Long-term Enhanced ACO Design (LEAD) Model ACO and would increase payment for the associated E/M visit by 32%. Under the LEAD Model, the MOD2 modifier would be optional and could be reported for any beneficiary receiving services from a participating provider—not just beneficiaries aligned with the LEAD Model. Claims reported with the MOD2 modifier would also be included in beneficiary assignment, historical benchmark expenditure calculations, and performance year expenditure calculations for the Shared Savings Program.
CMS is also proposing several changes to Remote Physiologic Monitoring (RPM) and Remote Therapeutic Monitoring (RTM). A separate initiation visit would be required before these services could begin. Payment would also be limited to RPM and RTM services furnished by clinical staff employed by the practice rather than by outside contractors. In addition, CMS is proposing to limit these services to established patients. Finally, CMS is considering bundling the existing RPM and RTM CPT codes and replacing them with four new HCPCS G-codes to describe remote monitoring services.
CMS continues to seek public comment on restructuring the global surgical payment package. Several years of data analysis continue to demonstrate that post-operative visits are not occurring at the frequency assumed in the current RVU allocation. CMS is requesting feedback on expanding its data collection efforts, as well as identifying other data sources that could be used to more accurately value global surgical services.
Two new Advanced Care Planning (ACP) codes are also expected to be introduced next year. These codes would capture clinical staff time provided under the direct supervision of the billing practitioner, while the existing CPT codes 99497 and 99498 would be limited to the billing practitioner's direct time spent with the patient.
Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) will likely see Diabetes Self-Management Training (DSMT) and Medical Nutrition Therapy (MNT) transition from the all-inclusive rate to stand-alone billable services. Similar to the expansion of care management services, CMS continues to focus on improving access to preventive care for Medicare beneficiaries in rural communities while supporting broader federal initiatives to strengthen rural healthcare.
For CY 2027, CMS is requesting stakeholder feedback on ways to better value primary care services to support its long-term goal of shifting the healthcare system from reactive treatment to a greater emphasis on prevention. Building on previous efforts within the Physician Fee Schedule and CMS Innovation Center models, CMS is specifically seeking input in three areas: reevaluating how primary care is reimbursed under the PFS, understanding how technology should be incorporated into primary care payment, and exploring prospective payment methodologies for primary care within the Medicare Shared Savings Program, with the potential for broader implementation across Original Medicare.
You can read the full CMS press release here: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule