Calendar Year (CY) 2027 Medicare Physician Fee Schedule Final Rule

On November 4, 2026, CMS issued the CY 2027 Medicare Physician Fee Schedule final rule, effective for services furnished on or after January 1, 2027. The rule establishes two separate conversion factors as required by statute: a qualifying APM conversion factor of $32.95, representing a decrease of $0.62 (-1.83%) from the CY 2026 rate of $33.57, and a nonqualifying APM conversion factor of $32.63, representing a decrease of $0.77 (-2.31%) from the CY 2026 rate of $33.40. The decreases reflect the expiration of the 2.50% one-year increase provided by Public Law 119-21 (the Working Families Tax Cut legislation) for CY 2026, combined with a -0.12% adjustment for changes in work RVUs and statutory updates of +0.75% and +0.25% for qualifying and nonqualifying APM participants, respectively. For global surgery payment, the rule finalizes a payment reduction when a separately identifiable office/outpatient E/M visit is furnished on the same day as a 0-day global procedure by the same physician or a physician in the same group practice. The most expensive service is paid at 100% and the other service is paid at 80%. The proposed extension of this policy to 10- and 90-day global procedures was not finalized. CMS also finalizes a pause of the post-operative visit data collection required under section 523 of MACRA, citing data showing post-operative visits during global periods are not occurring at rates consistent with current global payments. The rule transitions HCPCS code G2211 (the E/M complexity add-on) to modifier B1, which increases payment on the associated E/M code by 16% rather than a flat rate. A new modifier B2 is finalized for practitioners in Shared Savings Program ACOs or LEAD Model ACOs, increasing the associated E/M visit payment by 32% to account for longitudinal care resource costs. Both modifiers are voluntary. For remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM), the rule finalizes requirements that RTM be furnished only to established patients, that an initiating visit be separately reportable, and that RVU valuations be updated. The requirement limiting RPM and RTM payment to clinical staff employed by the practice is delayed to January 1, 2029. The rule finalizes practice expense methodology reforms, including phasing out the indirect practice cost index (IPCI) over two years and replacing it with a PE stabilizer. Indirect PE will be allocated on both work RVUs and clinical labor PE RVUs rather than only the maximum of the two. The rule establishes new coding and payment for shared medical appointments and finalizes inclusion of smoking and tobacco cessation and SBIRT services in the final year of the four-year timed behavioral health code work RVU transition. CoCM service work RVUs are increased and clinical labor rates for the Behavioral Health Care Manager are updated. For the Clinical Laboratory Fee Schedule, the rule implements Consolidated Appropriations Act, 2026 amendments capping payment reductions from private payor rate data implementation at 15% per year through CY 2029. For the 340B Program, covered entities as defined at 42 CFR 10.3 are required to submit claim-level data to the Medicare Part D Claims Data 340B Repository for covered Part D drugs dispensed on or after January 1, 2027, with the first mandatory quarterly submission deadline extended to September 30, 2027. The rule also implements Public Law 119-21 provisions limiting Medicare eligibility to four specified groups, with procedures for termination and appeal rights for affected individuals.