CMS Proposes 2027 Medicare Payment Changes: What Physicians Should Review

1. Introduction

On July 14, 2026, CMS released the Calendar Year 2027 Medicare Physician Fee Schedule proposed rule, filed as CMS-1848-P, with public comments due September 14, 2026. This is a big one. It touches the annual conversion factor, how same-day office visits and procedures get paid together, the G2211 add-on code, remote monitoring billing requirements, and practice expense valuation, among other areas.

Before going further, it's worth being precise about what "proposed" actually means here. Nothing in this rule is final. CMS is required to accept public comment before finalizing any of these provisions, and a final rule is expected later in 2026, with changes generally taking effect January 1, 2027, only if finalized as proposed. Some provisions could be adjusted, narrowed, or dropped entirely between now and then. This article walks through what's actually in the proposal, not what's already decided.

2. What Is Changing in the 2027 Medicare Physician Fee Schedule?

The most immediate number every practice should know is the conversion factor, the dollar multiplier applied across the entire fee schedule. For CY 2027, CMS proposes two separate conversion factors depending on participation in a qualifying Advanced Alternative Payment Model, continuing a structure introduced in CY 2026. The proposed qualifying APM conversion factor is lower than the current year's rate, and the non-qualifying APM conversion factor is lower still, largely because a temporary payment increase Congress provided for CY 2026 is scheduled to expire.

Practices should monitor this figure specifically, since it affects the baseline value of every service on the fee schedule, not just the specific provisions discussed below. A lower conversion factor compounds with any code-specific changes, meaning a practice heavily reliant on a service facing its own proposed cut could see a larger combined impact than either change would suggest on its own.

3. Proposed Changes to E/M and Global-Period Payments

This is one of the most consequential proposals for procedural and primary care practices alike. CMS proposes to reduce Medicare payment when a physician bills a separately identifiable office or outpatient evaluation and management visit, using modifier 25, on the same day as a procedure carrying a 0-day, 10-day, or 90-day global period.

Under the proposal, the single most expensive service billed that day, whether that's the E/M visit or the procedure, would be paid at 100 percent. Every other qualifying service billed that same date would be paid at only 50 percent. Because the E/M visit is frequently the lower-valued of the two services in a typical same-day encounter, it's often the E/M payment that would actually be cut in half, not the procedure. CMS is also seeking comment on whether this same reduction should extend beyond office and outpatient E/M visits to other settings, including inpatient evaluation and management services, which would broaden the proposal's reach if adopted. A related change involves modifier 57, used to identify an E/M service that results in the decision to perform surgery, which CMS is also proposing to revise as part of this same set of changes.

4. G2211: Proposed Changes Physicians Should Know

HCPCS code G2211, the visit complexity add-on for E/M services tied to ongoing, longitudinal care of a patient's condition, was finalized back in the CY 2021 rule and implemented for CY 2025 after a statutory delay. For CY 2027, CMS proposes converting G2211 from a separate, flat-rate billing code into a modifier appended directly to the associated E/M code.

Under this proposal, the modifier would increase payment for the associated E/M service by 16 percent, applied as a consistent percentage across every level of E/M code, rather than the current flat dollar amount. CMS's stated rationale is that the additional resources involved in longitudinal care aren't really a separate service, but an inherent part of the visit itself, and that a percentage-based modifier better reflects that while reducing administrative burden compared to billing a separate code.

CMS is also proposing a second, related modifier available specifically to clinicians participating in a Medicare Shared Savings Program ACO or the Long-Term Enhanced ACO Design Model. This ACO-specific modifier would recognize the added resource costs of maintaining total cost of care accountability and quality reporting tied to longitudinal care, increasing payment by 32 percent, roughly double the base rate available to non-ACO clinicians.

5. Remote Monitoring Billing Changes

Practices billing remote physiologic monitoring or remote therapeutic monitoring should pay close attention here, since these proposals represent a genuine shift in how CMS wants these services delivered and billed.

1. Established patients only. CMS proposes extending the established-patient requirement, which already applies to RPM, to RTM services as well.
2. A mandatory initiating visit. Practitioners would need to furnish a separately reportable initiating visit, conducted either in person or via telehealth, specifically discussing the use of RPM or RTM with the patient before those services begin.
3. No more outsourced clinical staff. This is the change with the most operational weight behind it. CMS proposes that RPM and RTM services only be payable when performed by clinical staff who are direct employees of the billing practice, disallowing the use of contracted, third-party monitoring staff entirely starting January 1, 2027 if finalized.
4. Potential code consolidation. CMS is seeking comment on replacing the current family of roughly 17 RPM and RTM CPT codes with four simplified HCPCS G-codes.
5. Valuation and practice expense changes. CMS is proposing refinements to how several RPM and RTM codes are valued, reflecting the agency's belief that monitoring device costs have fallen since the original valuations were set.

For practices that currently rely on a third-party staffing arrangement to deliver RPM or RTM, the direct-employment requirement specifically is worth flagging early, since restructuring that staffing model, if this provision is finalized, would take real lead time to implement correctly.

6. Practice Expense and Physician Payment Changes

Practice expense relative value units make up a substantial share of what many services actually pay, and CMS's proposed refinements to RPM and RTM valuation specifically reflect a broader point worth understanding: practice expense methodology directly shapes reimbursement even when a code's clinical description hasn't changed at all. CMS explicitly noted, in explaining one specific valuation decision, that it did not support maintaining a prior year's work value where there was no apparent change in clinical practice or code description to justify it.

Practices should review which of their commonly billed services carry a meaningful practice expense component, since proposed refinements to underlying cost assumptions, particularly around technology and device costs, can shift payment even for services that otherwise look unchanged on the surface.

7. Other 2027 Proposals Worth Watching

Beyond the provisions above, the CY 2027 proposed rule touches several other areas practices should be aware of, even where the specifics are still developing.

1. Primary care and chronic disease management continue to be a stated CMS priority, reflected in proposals like the G2211 changes discussed above.
2. Clinical laboratory payment includes a proposal to move a set of algorithmic laboratory analysis codes off the Clinical Laboratory Fee Schedule and toward contractor pricing instead, part of a broader shift CMS describes around software-based diagnostic services.
3. Telehealth platform transparency is addressed through two new proposed modifiers, BB and BC, which would need to be reported when a billing practitioner has a payment arrangement with the entity that owns the virtual care platform used for a telehealth visit. These modifiers wouldn't change payment amounts, but would make platform-affiliated telehealth visible in claims data for the first time.
4. Behavioral health, shared medical appointments, and advance care planning are also referenced in the broader proposed rule. Given how much of this proposal is still subject to change, practices with meaningful volume in these areas should review CMS's own fact sheet directly for the current specifics rather than relying on a general summary.

8. What Medical Practices Should Do Now

1. Review services heavily dependent on Medicare reimbursement, particularly any that involve same-day E/M and procedure billing, G2211, or RPM and RTM services.
2. Identify the specific CPT and HCPCS codes your practice bills most frequently within these categories, so you can model potential impact using your own claims history rather than industry averages.
3. Review documentation and billing workflows tied to modifier 25 usage and remote monitoring staffing arrangements specifically, since both are areas where the proposed changes would require real operational adjustment if finalized.
4. Monitor the final rule before changing any billing policy. Nothing in this proposal is in effect yet, and adjusting workflows prematurely based on a proposal that could still change creates its own risk.
5. Plan to train billing teams once policies are finalized, particularly on the mechanics of the G2211 modifier transition and any finalized modifier 25 payment reduction, so staff aren't learning new requirements under deadline pressure in December.

9. Frequently Asked Questions

What is the CY 2027 Medicare Physician Fee Schedule proposed rule?

It's CMS's annual proposed rule setting Medicare Part B payment rates and policies for calendar year 2027, released July 14, 2026 as CMS-1848-P, with public comments accepted through September 14, 2026.

Is the CY 2027 proposed rule final?

No. It's a proposed rule, not a finalized policy. CMS will review public comments before issuing a final rule, expected later in 2026, and any adopted changes would generally take effect January 1, 2027.

What is CMS proposing for modifier 25?

CMS proposes reducing payment to 50 percent for the lower-valued of two same-day services when a separately identifiable E/M visit is billed with modifier 25 alongside a procedure carrying a 0, 10, or 90 day global period, while the higher-valued service would still be paid at 100 percent.

What is changing with the G2211 code?

CMS proposes converting G2211 from a separate, flat-rate add-on code into a modifier appended to the associated E/M code, increasing that E/M code's payment by 16 percent rather than paying a flat additional amount.

Is there a different rate for ACO-participating clinicians under the G2211 proposal?

Yes. CMS proposes a separate, related modifier available only to clinicians in a Medicare Shared Savings Program ACO or the Long-Term Enhanced ACO Design Model, increasing payment by 32 percent to reflect additional longitudinal care and quality reporting resource costs.

What is changing for remote physiologic and remote therapeutic monitoring?

Proposed changes include extending the established-patient requirement to RTM, requiring a separately reportable initiating visit before RPM or RTM begins, and limiting payment to services furnished by clinical staff directly employed by the billing practice rather than outsourced contractors.

Can practices still use contracted staff for remote monitoring services?

Under the proposal, no. CMS proposes disallowing payment for RPM and RTM services performed by contracted, third-party clinical staff, requiring direct employment by the billing practice instead, effective January 1, 2027 if finalized.

What are the proposed BB and BC telehealth modifiers?

These are new modifiers CMS proposes requiring on telehealth claims when the billing practitioner has a payment arrangement with the company that owns the virtual care platform used for the visit. They would not change payment amounts but would make platform-affiliated telehealth visible in claims data.

Why is the Medicare conversion factor changing for 2027?

The proposed conversion factor decrease is largely driven by the scheduled expiration of a temporary payment increase Congress provided for CY 2026, combined with standard annual budget neutrality adjustments.

When will practices know if these changes are final?

CMS is expected to release the final CY 2027 Physician Fee Schedule rule later in 2026, after the September 14, 2026 comment period closes, with any finalized provisions generally taking effect January 1, 2027.

10. Conclusion

The CY 2027 Medicare Physician Fee Schedule proposed rule touches enough different parts of physician billing, conversion factor, same-day E/M payment, G2211, remote monitoring staffing, and practice expense valuation, that almost every practice will find something in it worth reviewing. None of it is decided yet, and the comment period exists specifically so that practices, specialty societies, and other stakeholders can weigh in before CMS finalizes anything. The practices that come out ahead of this transition are the ones reviewing their own billing patterns now, not the ones waiting until January to figure out what actually changed.

Edge RCM CTA

Understanding exactly how a proposed rule like this one could affect your practice's specific billing patterns takes more than reading a summary, it takes modeling your own claims data against the actual proposed provisions. Edge RCM helps practices review coding patterns, modifier usage, and remote monitoring billing workflows to understand real exposure to proposed payment changes like these, so you're prepared regardless of how the final rule lands. If your practice bills G2211, modifier 25 combinations, or RPM and RTM services regularly, Edge RCM can help you get a clear picture of what CY 2027 could mean for your revenue.