CMS released its final 2027 Medicare physician fee schedule and hospital outpatient and ASC payment rules Nov. 4, closing out a comment season that drew tens of thousands of responses from physicians, practices and industry groups.
For many physicians, the final rules landed harder than the July proposals. The conversion factor cut deepened, while CMS softened some of its most contested policies, including the same-day visit cut and proposed reductions to joint replacement work values. The changes take effect Jan. 1.
Here are 10 numbers associated with the final rules that will shape physician pay next year:
1. 2.31%: The cut to the Medicare conversion factor for clinicians who are not qualifying alternative payment model participants, dropping it to $32.63 from $33.40. CMS had proposed a 1.68% cut in July. Qualifying APM participants will see a 1.83% cut, to $32.95.
2. 2.5%: The one-time payment increase Congress approved for 2026, which expires at the end of the year. Its expiration is the main driver of the 2027 drop. Statutory updates of 0.25% for most clinicians and 0.75% for qualifying APM participants, plus a 0.12% negative adjustment tied to work RVU changes, do not make up the difference.
3. 33%: The decline in inflation-adjusted Medicare physician payment from 2001 to 2025, according to AMA data. The 2027 cut adds to that gap.
4. 20%: The payment cut for other same-day evaluation and management services billed with modifier 25 alongside a zero-day global procedure. The highest-paid service is paid in full. CMS had proposed paying the lower-valued service at 50% and applying the policy to 10- and 90-day global procedures as well. About 50 million of the 220 million office and outpatient E/M visits billed to Medicare in 2024 carried modifier 25.
5. 12.6%: The cut to the work RVU for total hip and total knee replacement, which falls to 16.70 from 19.11. CMS had proposed a cut closer to 20%, and the final rule reduced its proposed cuts to total knee, total hip, total shoulder and shoulder hemiarthroplasty by nearly half.
6. 32%: The increase in eligible office and outpatient E/M payments for clinicians in Medicare Shared Savings Program and LEAD Model ACOs under a new B2 modifier. CMS also finalized converting the G2211 add-on code into a modifier worth 16%, signaling a continued push toward value-based arrangements.
7. 5%: The cap on how much a single code’s practice expense value can change in a year under a new stabilization adjustment. CMS also finalized a two-year phaseout of the indirect practice cost index, with half the change applying in 2027 and the index eliminated in 2028.
8. 2.3%: The 2027 payment update for ASCs that meet quality reporting requirements, down from the 2.4% CMS proposed. A lower weight scaler, set at 0.814 compared with 0.872 this year, means half of the 30 ASC procedures generating the most Medicare dollars face a pay cut. Cataract removal, the highest-paid ASC procedure, falls 2%, while rotator cuff repair rises 35%.
9. 619: The number of procedures CMS added to the ASC covered procedures list, one more than it proposed. CMS also removed 637 services from the inpatient-only list in the second year of a three-year phaseout, continuing the migration of surgical volume to outpatient settings.
10. 2030: The deadline for clinicians to move from traditional MIPS to MIPS Value Pathways or advanced APMs. CMS had proposed beginning the transition with the 2029 performance period.
