Obstetrics & Gynecology Reimbursement Changes: What to Review Before 2027 Medicare

Introduction

If your practice doesn't see a lot of Medicare patients, it's tempting to scroll past every headline about the Medicare Physician Fee Schedule. For OB/GYN practices specifically, that instinct is understandable and also a mistake. Medicare patients aren't typically pregnant, but Medicare's rates still shape what your practice gets paid, because commercial payers and Medicaid programs routinely benchmark their own fee schedules off Medicare's numbers.

CMS released the CY 2027 Medicare Physician Fee Schedule proposed rule in July 2026, and this year's version has more in it for OB/GYN specifically than most annual updates do. There's a lower conversion factor, a proposed cut that hits same-day procedure and E/M billing especially hard, the first real restructuring of maternity care coding in three decades, and a new code for a specific surgical scenario that's become common enough to warrant its own line item.

This article walks through what's actually in the proposed rule, what's still just proposed versus finalized, and what your practice should be reviewing now, before the final rule lands later this year.

Why Medicare Payment Rules Matter Even for Reproductive-Age Patients

This is worth addressing directly, because it's the reason a lot of OB-heavy practices underestimate how much this affects them.

Medicare's Physician Fee Schedule sets rates for roughly 12,600 services, built on relative value units that CMS accepts from AMA recommendations in the vast majority of cases. Medicare's own beneficiary population skews toward gynecologic services, not obstetric ones, since most Medicare enrollees are past reproductive age. But commercial insurance contracts and Medicaid payment structures frequently use Medicare's fee schedule as their benchmark, adjusting up or down from it rather than building payment rates from scratch.

That means a change to how Medicare values a delivery code, an antepartum visit, or a same-day procedure and E/M combination can ripple into what your practice collects from commercial payers and Medicaid, even for patients who will never touch Medicare themselves.

Where the CY 2027 Proposed Rule Stands Right Now

It's important to be precise about timing here, because the status of this rule changes the way you should be responding to it.

1. CMS published the CY 2027 Physician Fee Schedule proposed rule on July 16, 2026.
2. The public comment period runs through September 14, 2026.
3. CMS is expected to release the final rule later in the fall of 2026.
4. If finalized as proposed, the changes take effect January 1, 2027.

Everything in this article reflects the proposed rule as published. Provisions can and do change between proposed and final versions, sometimes significantly, based on public comments and further CMS analysis. Treat this as a preparation checklist, not a final answer, and plan to revisit your specific numbers once the final rule publishes.

The Conversion Factor Cut and What It Means

The headline number driving most of this year's payment changes is the conversion factor, the dollar multiplier CMS applies across the entire fee schedule.

The proposed rule includes two separate conversion factors, reflecting the ongoing split between qualifying Advanced Alternative Payment Model participants and everyone else.

1. The proposed CY 2027 qualifying APM conversion factor is $33.17, a decrease of $0.40, or about 1.19 percent, from the current $33.57.
2. The proposed CY 2027 non-qualifying APM conversion factor is $32.84, a decrease of $0.56, or about 1.68 percent, from the current $33.40.

The primary driver behind this decrease is the scheduled expiration of a temporary 2.5 percent conversion factor increase that Congress provided for CY 2026. Without further Congressional action extending or replacing that temporary boost, the fee schedule reverts to a lower baseline for 2027.

What this means for OB/GYN specifically

CMS's own specialty-level impact estimates project that obstetrics and gynecology services will see an approximate 2 percent decrease in the facility setting and a 1 percent decrease in the office setting under the proposed rule. Those are modest percentages on their own, but they compound with the other OB/GYN-specific proposals below, and they apply on top of whatever your payer mix does independently.

The Modifier 25 Proposal Aimed Directly at OB/GYN Workflow

This is the provision most likely to actually change how your practice bills day to day, and it's worth understanding in detail.

CMS is proposing to cut Medicare payment by 50 percent on any evaluation and management visit billed with modifier 25 on the same day as a procedure carrying a 0-day, 10-day, or 90-day global period, when performed by the same physician or another physician in the same practice. Under the proposal, the highest-paid service on that day's claim would still be reimbursed at 100 percent, while every other service billed that same day would be cut in half.

Why this hits OB/GYN especially hard

Modifier 25 is a routine part of OB/GYN billing. A same-day office visit combined with a minor procedure, whether that's a colposcopy, an endometrial biopsy, an IUD placement, or another in-office procedure with a global period, is an extremely common billing pattern in gynecology specifically. Dermatology, podiatry, ophthalmology, and orthopedics carry similarly high modifier 25 volume, but OB/GYN sits squarely in that group of specialties most exposed to this change.

And this isn't a Medicare-only concern in practice. Because commercial payers benchmark off Medicare's fee schedule and policies, a finalized modifier 25 reduction has a real chance of influencing how commercial payers handle the same billing pattern, even for practices with relatively low Medicare volume.

Maternity Care Coding Is Being Restructured for the First Time in Decades

This is the most structurally significant proposal in this year's rule for obstetric practices specifically.

For more than 30 years, maternity care has been billed under a global obstetric package structure, commonly referred to as the MMM global period, bundling antepartum care, delivery, and postpartum care into a single global code. New CPT codes for maternity care are restructuring this model into individual, separately reportable codes rather than one bundled package.

In the CY 2027 proposed rule, CMS is weighing two paths: adopting the new CPT codes with some adjustment to the AMA's proposed valuations, or creating new HCPCS Level II codes that would preserve the current coding and payment structure instead. The AMA has said the shift toward individual codes is meant to more accurately reflect how maternity care is actually delivered today, compared to when the global package structure was first built.

The proposed valuation shift

Under the restructuring being considered, antepartum and postpartum codes would see reduced relative value units, while labor and delivery codes would see work RVUs increase by roughly 15 percent. In effect, the proposal shifts more of the total payment weight toward the delivery itself and less toward the surrounding antepartum and postpartum visits, compared to how the bundled package currently allocates value.

This is exactly the kind of change that's easy to miss if your practice is still thinking in terms of the old global package. If finalized, billing workflows, documentation habits, and even how your practice explains global maternity charges to patients may need to be rebuilt around the new individual code structure.

A New Code for Hysterectomy After Cesarean Delivery

CMS is proposing a new CPT code, listed in the proposed rule as 59XX9, specifically for subtotal or total hysterectomy performed after a cesarean delivery, effective January 1, 2027. CMS proposes to accept the RUC-recommended work relative value unit of 15.56 for this code.

This procedure has historically been billed using codes that weren't built to reflect the specific clinical scenario of a hysterectomy performed in the context of a cesarean delivery. A dedicated code, if finalized, gives practices a more accurate way to document and bill for this combination, which can matter both for reimbursement accuracy and for cleaner claims that don't require extensive supporting documentation to justify an unbundled or modifier-heavy claim.

The Coding Gap Nobody's Talking About

Worth flagging, even though it's not a proposed change so much as a notable absence: this year's fee schedule proposal addresses maternity care coding in detail, but menopause-related care isn't specifically addressed in the same way. Menopause is a condition with essentially universal prevalence among women who live long enough to experience it, and the clinical understanding and management of menopause has evolved considerably in recent years, while the coding structure supporting that care largely hasn't kept pace.

For GYN practices managing a substantial menopause and perimenopause patient population, this is worth watching independently of the CY 2027 cycle specifically, since it reflects a broader, ongoing gap between clinical practice and coding structure rather than something this year's rule is expected to resolve.

Common Mistakes Practices Make During a Fee Schedule Transition Year

1. Assuming a proposed rule provision will finalize exactly as written, without planning for the possibility that CMS adjusts it based on comments.
2. Ignoring proposed changes because Medicare volume is low, without accounting for how commercial and Medicaid payers benchmark off Medicare rates.
3. Waiting until January to review modifier 25 billing patterns, instead of auditing current same-day procedure and E/M billing now to understand exposure.
4. Treating the maternity care code restructuring as a distant issue, when documentation and workflow changes take real lead time to implement correctly.
5. Not submitting comments during the open comment period, even though CMS reviews and sometimes responds to specialty society and practice-level feedback before finalizing.
6. Failing to model the new hysterectomy-after-cesarean code against how the procedure is currently billed, missing an opportunity for cleaner, more accurate claims once it's available.

Actionable Tips to Prepare Before January 1, 2027

1. Run an internal audit now of how often your practice bills modifier 25 alongside same-day procedures with a global period, so you understand your specific financial exposure if the proposal finalizes as written.
2. Review your current maternity care billing workflow and start mapping how it would translate under an individual-code structure, rather than waiting until the final rule to start that process.
3. Flag the proposed hysterectomy-after-cesarean code and prepare documentation templates for it now, so your practice can adopt it cleanly if finalized.
4. Check your top commercial and Medicaid payer contracts to understand how directly, and how quickly, they typically follow Medicare fee schedule changes.
5. Watch for the final rule release in the fall of 2026 specifically, rather than assuming the July proposed rule numbers are final.
6. Consider whether your practice or specialty society wants to submit comments before the September 14, 2026 deadline, particularly on the modifier 25 proposal given how disproportionately it affects OB/GYN billing patterns.

Expert Recommendations

Practices that come through a major fee schedule transition year in good shape tend to start their internal review the moment the proposed rule publishes, not after the final rule lands. By the time the final rule is out, there's a short runway before January 1, and practices that haven't already modeled their own exposure are scrambling to update documentation, coding workflows, and patient financial conversations all at once.

For the modifier 25 proposal specifically, it's worth running the numbers on your own claims data rather than relying on national averages. A practice with a high volume of same-day colposcopy or biopsy visits paired with E/M billing will feel this differently than a practice with a lower same-day procedure rate, and knowing your own exposure now gives you time to adjust scheduling patterns or documentation practices before the cut, if finalized, actually hits your revenue.

On the maternity care restructuring, this is a case where getting ahead of the documentation requirements matters more than getting ahead of the exact payment numbers. Even if CMS adjusts the specific RVU figures between the proposed and final rule, the shift toward individual, separately reportable codes for antepartum, delivery, and postpartum care is the structural change your practice needs to be ready to document correctly, regardless of exactly how the final valuations land.

Frequently Asked Questions

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

It's the annual CMS rule that sets Medicare Part B payment rates and policies for physician and outpatient services, published in proposed form on July 16, 2026, with a final version expected in the fall of 2026 and an effective date of January 1, 2027, if finalized as proposed.

Why does the Medicare fee schedule matter for OB/GYN practices with mostly reproductive-age patients?

Commercial insurance contracts and Medicaid payment structures frequently benchmark their own rates off Medicare's Physician Fee Schedule, so changes to Medicare's rates and policies can influence payment for non-Medicare patients as well.

What is the proposed conversion factor for CY 2027?

The proposed rule includes a qualifying APM conversion factor of $33.17, down from $33.57, and a non-qualifying APM conversion factor of $32.84, down from $33.40, both reflecting the scheduled expiration of a temporary 2.5 percent increase Congress provided for CY 2026.

What is the modifier 25 proposal in the CY 2027 rule?

CMS is proposing to reduce Medicare payment by 50 percent on an evaluation and management visit billed with modifier 25 on the same day as a procedure with a 0-day, 10-day, or 90-day global period, when performed by the same physician or another physician in the same practice, with only the highest-paid service on the claim reimbursed at 100 percent.

Why does the modifier 25 proposal affect OB/GYN more than some other specialties?

OB/GYN has a high frequency of same-day procedure and evaluation and management visit combinations, such as an office visit paired with a colposcopy or biopsy, which makes the specialty particularly exposed to a payment reduction targeting that specific billing pattern.

What's changing with maternity care coding?

New CPT codes are restructuring maternity care from the longstanding global obstetric package model into individual, separately reportable codes for antepartum, delivery, and postpartum care, with CMS considering whether to adopt these new codes with adjusted valuations or create alternative HCPCS codes that preserve the current bundled structure.

Is the maternity care coding change finalized?

No. As of the proposed rule, CMS is still evaluating whether to adopt the new CPT structure with adjustments or an alternative HCPCS approach, and the outcome will be determined in the final CY 2027 rule expected in the fall of 2026.

What is the new hysterectomy code proposed for 2027?

CMS proposes a new CPT code, referenced as 59XX9, for subtotal or total hysterectomy performed after a cesarean delivery, effective January 1, 2027, with a proposed work relative value unit of 15.56.

When does the comment period close for the CY 2027 proposed rule?

The public comment period closes September 14, 2026. Practices and specialty societies can submit comments to CMS on any provision, including the modifier 25 and maternity care coding proposals, before that deadline.

When will the final CY 2027 rule be released?

CMS is expected to release the final rule later in the fall of 2026, with provisions taking effect January 1, 2027, assuming no further legislative changes affect the timeline or the conversion factor.

Conclusion

This year's Medicare Physician Fee Schedule proposal has more direct relevance to OB/GYN than most annual updates, between the conversion factor decrease, a modifier 25 proposal aimed squarely at common gynecology billing patterns, and the first real restructuring of maternity care coding in three decades. None of it is finalized yet, and some of it may change before the final rule publishes this fall. But the practices that come out ahead of this transition are the ones reviewing their own billing patterns and documentation now, rather than waiting for January 1 to figure out what changed.