The US Medicare programme has finalised its 2027 physician payment rules, setting lower factors used to calculate fees and changing how it pays for some office visits that take place on the same day as a procedure.
The Centers for Medicare & Medicaid Services said the physician fee schedule will take effect on 1 January 2027. The rules govern payments for a wide range of services provided by doctors and other practitioners under Medicare Part B, which covers services including outpatient care.
For practitioners who do not qualify for a higher rate through an advanced alternative payment model, the conversion factor will fall from $33.40 in 2026 to $32.63 in 2027, a decrease of 2.31%. For qualifying participants in those payment models, the factor will fall from $33.57 to $32.95, a decrease of 1.83%.
The conversion factor is one part of a formula, not a flat fee paid for every appointment. Medicare assigns relative values to services based on the work, practice expenses and professional liability costs involved. It also adjusts for differences in local costs. Those elements help determine the payment for a particular service.
A change in the factor therefore does not mean that every doctor’s total Medicare revenue or every individual service payment will fall by the same percentage. The mix of services provided, local adjustments and other changes to the schedule all matter.
Why the factors are falling
The agency said a major reason for the decline is the expiry of a temporary 2.5% increase that Congress provided for 2026. Statutory updates for 2027 partly offset that expiry. The final calculation also includes an adjustment associated with changes to the relative values of some services.
Both final factors are lower than the levels in the agency’s July proposal. The proposed factor for practitioners outside the qualifying alternative-payment group was $32.84; the proposed factor for qualifying participants was $33.17.
Same-day visits and procedures
The rule also changes payment when a separately identifiable office or outpatient evaluation is billed on the same day as an eligible procedure with a zero-day global period, meaning one without an included post-operative period beyond the procedure day. The policy applies when the services are furnished by the same physician or by a physician of the same specialty in the same group practice.
Under the final approach, the higher-paid service is paid in full and the other eligible service or services are paid at 80% of their applicable rates. This is a reduction to the lower-paid service, not a blanket 20% reduction to the patient’s whole bill or to every same-day appointment.
The agency had proposed paying the other service or services at 50% and applying the policy to procedures with longer global periods as well. It narrowed the policy after considering public comments.
Before the final rule, the American Medical Association had opposed the proposed 50% reduction, arguing that it could put pressure on independent practices and patient access. The final policy is narrower and the reduction is smaller than in the proposal on which the association commented.
Other changes for care and reporting
The rule also creates a new way to calculate an additional payment for the complexity of certain office visits, using a visit modifier.
A requirement that remote monitoring be carried out by staff employed by the practice, rather than contractors, has been delayed until 2029.
Some patients could also see changes in out-of-pocket costs, but not automatically. From 1 April 2027, approved accountable care organisations will be able to reduce or eliminate Medicare Part B cost-sharing for eligible beneficiaries and specified services under an approved plan. Prescription drugs and durable medical equipment are among the exclusions.
Another part of the rule gives clinicians more time to move away from the traditional quality-reporting option known as MIPS. That option will end beginning with the 2031 performance period, rather than in 2029 as proposed, with clinicians able to transition to other approved reporting or payment routes.
The measures set payment and reporting conditions; they do not establish how any particular practice will respond or guarantee an improvement or deterioration in access to care. Effects will depend on the services delivered, the clinicians involved and how the changes operate in practice.
Featured image: AI-generated illustration.
