CMS 2027 Medicare Physician Fee Schedule Rule: 9 Proposed Changes That Could Affect Healthcare Revenue

2027 MPFS Proposed Rule at a Glance

Medicare Physician Fee Schedule Implications on Medical Practices

1.2027 Medicare Physician Fee Schedule Conversion Factor

2. Practice Expense Changes

3. What Is CMS Proposing to Change About G2211 in 2027?

4. 2027 Shift Toward Value-Based and Alternative Payment Models

5. 2027 RPM and RTM Changes

6. What Could the 2027 MPFS Change About Telehealth Billing and Data Capture?

7. Shared Medical Appointment Codes Create a New Reimbursement Opportunity

8. Changes in Who Can Deliver and Support Advance Care Planning Services

9. 2027 QPP: New MIPS Measures, More MVPs, Flexible Reporting

Prepare Your Revenue Cycle for the 2027 Medicare PFS

FAQ

The CY 2027 Medicare Physician Fee Schedule (PFS) proposed rule introduces several changes that could affect Medicare reimbursement, physician billing, coding, practice expenses, telehealth, remote patient monitoring, quality reporting, and revenue-cycle management.

CMS released the proposed rule on July 14, 2026, outlining proposed changes to Medicare Part B payment policies for physicians and other eligible clinicians. The rule includes changes to conversion factors, relative values, evaluation and management services, remote monitoring, telehealth, quality reporting, and alternative payment models.

For physician practices, the impact goes beyond the headline payment update.

The AMA notes that CMS projects the Medicare Economic Index (MEI) at 2.5% for 2027, while the proposed MPFS conversion factors are down 1.19% for APM QPs and 1.68% for non-APM QPs. 

Changes to CPT/HCPCS valuations, practice expense calculations, modifiers, E/M billing, remote monitoring codes, and quality programs can all affect how services are documented, coded, billed, and ultimately reimbursed.

The key question is:

What will the proposed 2027 Medicare PFS changes mean for physician billing, reimbursement, and your revenue cycle?

2027 MPFS Proposed Rule at a Glance

• Effective date: January 1, 2027, if finalized
• Conversion factors: $33.17 for qualifying APM participants; $32.84 for other clinicians
• Practice Expense: Proposed methodology changes could redistribute PE payments across services and specialties
• G2211: Proposed percentage-based payment approach could increase eligible E/M payments
• RPM/RTM: Proposed changes to eligibility, initiating visits, staffing, and code valuation could affect program economics
• Telehealth: Proposed billing and coverage changes require service-level review
• Primary care: CMS is exploring new approaches to support longitudinal, comprehensive care
• Shared Medical Appointments: Proposed new codes could create a new billing pathway for group-based care
• Advance Care Planning: Proposed new codes could expand the role of clinical staff
• MIPS/QPP: Proposed measure and reporting changes could affect quality workflows and payment
• ACO/value-based care: Proposed changes could affect shared-savings and total-cost-of-care economics

Note: These are proposed policies and may change in the final rule.

Medicare Physician Fee Schedule Timeline

The 2027 Medicare Physician Fee Schedule is expected to take effect on January 1, 2027, following the release of the final rule in late 2026, giving providers time to prepare for the changes.

Practices should not wait until January to begin preparation. Most organizations need several months to:

• Update billing software.
• Revise coding protocols.
• Modify EHR templates.
• Train physicians and staff.
• Adjust revenue forecasts.

Implications of Medicare Physician Fee Schedule

For physician practices, the proposed rule has significant effects beyond Medicare reimbursement. It impacts budgeting, coding, documentation, staffing, practice operations, EHR workflows, and revenue cycle management (RCM). 

While the regular payment updates are positive, the end of temporary congressional funding means many clinicians may still see lower overall payment rates compared to 2026.  

Whether you run an independent practice, a multispecialty group, an ambulatory surgery center, or a hospital-owned physician practice, knowing about these proposed changes now gives your practice the time to prepare before the final rule is released later this year.  

Medicare Physician Fee Schedule Implications on Medical Practices: 

Key Changes Healthcare Organizations Should Know About Medicare Physician Fee Schedule Proposed Rule

Will the 2027 MPFS actually reduce your Medicare revenue? Let’s explore

1. 2027 Medicare Physician Fee Schedule Conversion Factor 

What CMS Is Proposing 

One of the most significant changes to the MPFS involves the continuation of two separate Medicare conversion factors for physicians and other clinicians who bill under Part B, as required by statute under the MACRA law.

The proposed changes would set the following conversion factors effective January 1, 2027:

The proposal to set two separate conversion factors would result from two different statutory payment updates:

Physician & Clinician Category

• Statutory Payment Update for Qualifying APMs: +0.75%
• All other clinicians: +0.25%
• Budget Neutrality Adjustment Of -0.53% related to changes to work relative value units (RVUs) for the physician fee schedule.

What This Could Mean for Practice Revenue 

Do not Apply the Conversion-Factor Reduction Across Your Practice’s Medicare Revenue 

Proposed conversion factor reduction is a nice starting point but should not be seen as the expected fall in your practice’s Medicare payment in 2027.

 For instance, imagine that your medical group reported 2026 Medicare Physician Fee Schedule revenues of $10 million. 

If your medical group were 100% exposed to the proposed 1.68% reduction applicable to non-qualifying clinicians, the simple sensitivity is simply: 

$10 million X 1.68% = $168,000 

This would result in around $168,000 in pressure annually on payments. That’s a sensitivity not a projection.

That payment result will differ depending on individual RVU, Practice Expense, and G2211 Utilization, as well as service mix, coding dynamics, volume of Medicare, or participation in qualifying APMs.

That difference is meaningful; some services would experience little to no dip in Medicare payment and may even rise in spite of the conversion factor. The Takeaway 

Why are Medicare physician payments going down in 2027?

While CMS is proposing statutory updates to physician payments, the temporary 2.5% physician payment update enacted for 2026 will lapse in 2027, resulting in lower payment conversion factors than would otherwise be the case. 

Specifically, CMS expects that the proposed changes would reduce Medicare payments by about 1.19% for qualifying APMs and about 1.68% for all other clinicians compared to the 2026 conversion factors.

What Practices Should Do

Tip: Use the conversion factor to estimate Medicare payment in 2027 through your sensitivity modeling, but forecast that payment in a CPT/HCPCS and service line level manner.

Practices can no longer rely on a statutory payment update to increase their revenues from Medicare.

The change in the conversion factor alone, combined with the mix of services billed and the Medicare patient mix, will determine the change in payments for each practice. 

It is critical that finance and/or RCM leaders consider their practice’s revenue from Medicare, based on their mix of services and patients, before finalizing the rule.

2. Practice Expense Changes  

What CMS Is Proposing 

CMS is proposing to modernize the methodology for determining the Practice Expense (PE) component of physician payments. The PE RVUs are meant to reimburse physicians for their overhead or indirect costs when providing services to Medicare beneficiaries.

Indirect costs typically consist of:

• Salaries for clinical and non-clinical staff
• Medical supplies and equipment
• Administrative costs and staffing
• Facility overhead
• Information technology

CMS contends that current methodologies for calculating indirect costs do not accurately reflect the way physicians’ practices operate in today’s economy. As a result, CMS wants to revise the way indirect costs are incorporated into the overall calculation of physician payments.

What This Could Mean for Practice Revenue

One of the biggest mistakes practices can make is evaluating the proposed Practice Expense changes using a single organization-wide percentage.

Consider a practice with three major Medicare service lines:

Your practice’s total impact would not be based on the greatest percent change. It would be based on your revenue exposure and utilization.

Example:

• Office E/M: +$80,000
• Office procedures: -$150,000
• Diagnostic services: -$60,000
• Illustrative net impact: -$130,000

What Practices Should Do 

This is why CFOs and revenue cycle leaders should not apply a blanket “2027 MPFS adjustment” across all their Medicare volume. Instead, extract your top 20-30 Medicare CPT/HCPCS codes sorted by allowed amount or volume and look at the difference in proposed 2027 payment versus the 2026 Medicare payment for each code. That exercise will show you what your real exposure is.

3. What Is CMS Proposing to Change About G2211 in 2027? 

What CMS Is Proposing 

HCPCS G2211 is an add-on code that recognizes the extra work involved in delivering longitudinal, relationship-focused care.

CMS suggested updating the payment methodology for G2211 by shifting from a flat payment to a percent-based payment and introducing a new modifier for eligible clinicians in accountable care organizations.

This approach is intended to ensure appropriate reimbursement for the increased level of care and encourage the adoption of accountable care models.

Who Could Be Affected? 

If finalized, this change would primarily affect physicians and other clinicians who typically report Evaluation and Management (E/M) services with a significant portion of their patient load, including:

• Primary care
• Internal Medicine
• Family Medicine
• Geriatrics
• Endocrinology
• Rheumatology

And other specialties focused on chronic disease management and longitudinal patient relationships

Clinicians who report office visits to E/M services and bill Medicare should pay close attention to this update, as changes to G2211 could significantly impact their reimbursement.

What This Could Mean for Practice Revenue: 

The G2211 Change Should Be Modeled at the E/M Level

The proposed change to G2211 is particularly important for organizations with large primary care, internal medicine, geriatrics, and chronic-care populations.

Under the proposed percentage-based methodology, the financial impact will depend on the underlying E/M service rather than simply the number of G2211 units reported today.

For example, if an eligible E/M service has a hypothetical Medicare payment of $100, a 16% enhancement would represent:

$100 × 16% = $16

The resulting payment would be approximately $116 before considering other payment adjustments.

For an eligible ACO-related service subject to the proposed 32% enhancement, the same $100 example would produce:

$100 × 32% = $32

or approximately $132.

These examples are illustrative rather than payment forecasts. The actual financial impact will depend on the E/M code, eligibility, utilization, documentation, and applicable ACO requirements.

What Practices Should Do:

For leadership, the important question is not “How much G2211 revenue did we generate in 2026?”

The better question is:

“How many eligible E/M encounters do we have,
What is the underlying payment for those services, and 

How would the proposed percentage methodology change the economics?”

That is the analysis finance and RCM teams should perform before building the 2027 budget.

4. 2027 Shift Toward Value-Based and Alternative Payment Models 

What CMS Is Proposing 

The 2027 Medicare Physician Fee Schedule Proposed Rule builds upon CMS’s ongoing efforts to strengthen primary care by proposing payment updates that recognize the value of longitudinal, comprehensive management of patients.

In addition to the suggested changes to G2211, CMS is seeking feedback on potential future reforms to transition away from fee-for-service reimbursement and adopt more global, population-based payment models for primary care.

What This Could Mean for Primary Care 

Primary care physicians often devote a significant amount of time to activities outside of direct patient encounters, including coordinating referrals, managing chronic conditions, reviewing laboratory results, communicating with patients, and consulting with other specialists.

This type of management has traditionally been inadequately reimbursed under the fee-for-service model.

The 2027 proposed rule reflects CMS’s interest in encouraging the shift towards value-based care by promoting

• Longitudinal and comprehensive relationships with patients,
• Prevention and management of chronic illness,and
• Care coordination, including team-based care and population health management.

What Practices Should Watch 

CMS is also requesting public comment on potential future payment reforms that would promote simplification and encourage the transition to alternative payment models.

While these are merely requests for information, they highlight CMS’s interest in moving towards more global reimbursement approaches for physician services in the future.

5. 2027 RPM and RTM Changes 

What CMS Is Proposing 

The 2027 proposed rule contains several significant changes to Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM). For example, CMS proposes to require an initiating visit, limit RTM to established patients, require clinical staff to be employed by the billing practice, and revise the valuation of several RPM/RTM CPT® codes. 

These proposed changes are designed to promote program integrity, ensuring that remote patient monitoring services are provided in the context of a broader treatment relationship.

What Could Be Affected? 

The most significant proposed changes relate to

• A separate initiating visit,
• RTM and established patients,
• Restrictions on outsourcing, and
• Revisions to several RPM/RTM CPT® codes.

Practices that provide remote patient monitoring services should review the proposed rule’s changes, including patient eligibility requirements, documentation, and CPT® code selection. 

What Practices Should Do: 

For organizations that outsource monitoring services to third parties, CMS’s proposed restrictions on outsourcing could impact their current business practices. Finally, practices should update their staff about these changes before the rule’s official adoption.

If clinical staff must be employed by the billing practice, leadership should compare the economics of the current outsourced arrangement with an internal model.

A simple analysis could include:

Outsourced model

Number of monitored patients × vendor cost per patient-month = annual vendor expense

Internal model

Clinical staff + supervision + technology + devices + billing + compliance + administrative overhead = annual internal cost

For example, if a practice has 2,000 monitored patient-months per year and pays a vendor $30 per patient-month:

2,000 × $30 = $60,000 annual vendor expense

The practice should then compare that $60,000 against the fully loaded cost of bringing the work in-house.

6. What Could the 2027 MPFS Change About Telehealth Billing and Data Capture? 

The 2027 proposed rule retains telehealth policies adopted in 2020-2022 and further advances Medicare’s digital health strategy, including care management, behavioral health, and chronic care management, where statutory authority allows.

While many of the telehealth flexibilities adopted in response to the COVID-19 pandemic require congressional approval, the 2027 proposed rule reflects CMS’s broader interest in making telehealth a permanent part of the U.S. health care system. 

Specifically, CMS proposed to include telehealth in various initiatives designed to improve care coordination and chronic care management and expand access to behavioral health.

What This Could Mean for Telehealth Revenue 

While many telehealth policies adopted during the COVID-19 pandemic may be eliminated if Congress fails to act, Medicare will likely continue to reimburse telehealth services in 2027.

Telehealth Should Be Analyzed Service by Service, Not as One Payment Category

One of the risks in planning for 2027 is treating “telehealth” as a single Medicare benefit.

It isn’t.

Leadership teams should separate their telehealth volume by:

• Service type
• Modality
• Patient location
• Provider type
• Behavioral health versus medical care;
• Audio-only versus audiovisual services;
• Temporary versus permanent statutory authority; and
• Medicare FFS versus Medicare Advantage.

That matters because the regulatory basis for each service can be different.

What Practices Should Do: 

Instead of asking:

“Will Medicare continue paying for telehealth?”

a better operational question is:

“Which telehealth services generated Medicare revenue for us in 2026, what authority supports each service, and what would happen to that revenue if the applicable flexibility changed?”

A claims-level inventory can answer that question much more reliably than an organization-wide telehealth percentage.

7. Shared Medical Appointment Codes Create a New Reimbursement Opportunity 

What CMS Is Proposing 

The proposed Shared Medical Appointment (SMAs) codes could create a clearer Medicare billing pathway for organizations using group-based care models, particularly in chronic disease management and patient education. 

SMAs are innovative approaches to physician care that allow physicians to see multiple patients with similar medical problems while providing each with individualized clinical services during the same appointment.

CMS supports developing SMAs because they can help achieve a number of important program goals, including chronic disease management, education, care coordination, practice transformation, and enhanced access to care.

By introducing new HCPCS codes for SMAs, CMS seeks to encourage the adoption of this new care model by physicians and show insurers that SMAs are legitimate services worthy of reimbursement. Organizations considering offering SMAs need to understand the requirements related to these proposed new codes.

What This Could Mean for Practice Capacity 

SMAs Could Be More Than a Coding Change

For organizations considering shared medical appointments, the potential opportunity is not simply the ability to submit a new code.

The bigger question is whether the model can increase clinical capacity without creating a proportional increase in staffing cost.

For example, if a physician traditionally sees eight individual patients during a four-hour block, a properly structured group-care model could potentially allow the practice to serve more patients during the same period while retaining individualized clinical interactions.

What Practices Should Evaluate 

Leadership should therefore evaluate three variables:

Capacity: How many additional patients can be served?

Cost: What additional physician, clinical staff, room, technology, and administrative resources are required?

Revenue: What is the expected Medicare and commercial reimbursement per patient?

This turns the SMA proposal into a capacity and margin question, rather than simply a new coding opportunity.

8. Changes in Who Can Deliver and Support Advance Care Planning Services 

What CMS Is Proposing 

Moreover, CMS proposed several coding-related changes that will take effect when the new rule is adopted in 2027. Specifically, they proposed to allow clinical staff, under the supervision of a physician, to furnish particular Advance Care Planning services. 

It refers to a set of services designed to help patients navigate various treatment options, understand the end-of-life care continuum, designate a health care surrogate, and discuss goals of care.

What This Could Mean for Care Delivery: 

Although physicians have traditionally been responsible for Advance Care Planning, it usually involves patients and their families, who need professional counseling to make informed decisions. 

Besides offering patients better care, this approach should help physicians and clinical staff create more comprehensive treatment plans and achieve better patient outcomes.

What This Could Mean for ACO Economics 

A lower fee-for-service payment does not necessarily translate into an equivalent reduction in the organization’s overall Medicare financial performance if the organization is also generating value through shared savings or other performance-based arrangements.

That means leadership should evaluate at least three layers:

Layer 1: Fee-for-service revenue

How much does the organization receive for individual Medicare services?

Layer 2: Cost of care

What does it cost the organization to manage the attributed Medicare population?

Layer 3: Value-based performance

How does utilization, quality, attribution, and total cost of care affect the organization’s ACO economics?

This is particularly important for primary care organizations, where the financial value of care coordination and longitudinal patient management may extend beyond the payment attached to an individual office visit.

Leadership takeaway: If you’re in an ACO, don’t evaluate the 2027 MPFS using only the fee schedule. Evaluate it alongside your total Medicare population economics.

9. 2027 QPP: New MIPS Measures, More MVPs, Flexible Reporting 

What CMS Is Proposing 

CMS will continue to refine the Quality Payment Program (QPP) in 2027 by revising and refining the measures in each category, including expanding the list of MIPS Value Pathways (MVPs).

Moreover, CMS proposed a new set of MIPS Core Measures that clinicians would report based on their specialty and patient population.

In addition, the proposed rule would encourage the adoption of virtual groups by allowing alternate reporting methods for clinicians who participated in MVP reporting.

What This Could Mean for Practice Operations 

Quality reporting bears directly on physician reimbursement. Therefore, practices need to optimize their quality-related operations, including 

• EHR documentation
• Registry reporting 
• Coding
• Analytics

What Practices Should Do 

Organizations that invest in these areas will be able to achieve the highest possible reimbursement rates.

Practices should evaluate whether their current EHR, coding, registry, and analytics workflows can support the proposed 2027 reporting requirements before the final rule is published. 

What Healthcare Leaders Should Calculate Before the Final Rule

Rather than waiting for the final rule and then starting the analysis, leadership teams can build a preliminary 2027 sensitivity model using current Medicare data.

At minimum, calculate:

1. Conversion-factor exposure

2026 Medicare PFS revenue × proposed percentage change

This provides a baseline sensitivity, not a final forecast.

2. CPT-level RVU exposure

For the organization’s highest-volume Medicare services:

2027 proposed payment − 2026 payment

Then multiply the difference by historical utilization.

3. G2211 exposure

Estimate the number of potentially eligible E/M encounters and model the proposed percentage-based payment methodology.

4. RPM/RTM exposure

Calculate current Medicare revenue, vendor costs, staffing costs, and the potential financial impact of proposed staffing and eligibility requirements.

5. Same-day E/M/global procedure exposure

Identify historical encounters affected by the proposed payment methodology and calculate the potential reduction.

6. ACO exposure

For ACO participants, combine fee-for-service sensitivity with the organization’s broader shared-savings and total-cost-of-care economics.

This analysis doesn’t need to be perfect in August. The goal is to identify where the organization has material exposure before the final rule is published.

2027 Medicare Physician Fee Schedule Readiness Checklist

Payment Impact 

• Identify the organization’s top 20–30 Medicare CPT/HCPCS codes by volume and allowed amount.
• Compare 2026 versus proposed 2027 payment for those services.
• Separate conversion-factor effects from RVU and Practice Expense effects.

G2211 & E/M 

• Quantify G2211 exposure at the E/M-service level.
• Identify same-day E/M/global-procedure claims that could be affected.

RPM/RTM & Telehealth 

• Review outsourced RPM/RTM arrangements and model potential staffing changes.
• Inventory telehealth revenue by service type and regulatory authority.

Systems & Operations 

• Assess whether EHR and RCM systems can support proposed documentation and reporting requirements.
• Model MIPS/QPP operational and financial exposure.

Medicare Economics 

• For ACO participants, incorporate MPFS changes into the broader Medicare economics.
• Build low, base, and high 2027 revenue scenarios rather than relying on one percentage.

Executive Readiness 

• Assign an executive owner to each material revenue or workflow risk.
• Re-run the model when CMS publishes the final rule.

What Drives Medicare Physician Payment Changes? 

The number you see most clearly in the 2027 MPFS notice is the conversion factor. 

However, for most of you, the conversion factor itself will not be the number with which the “actual financial results” of your organization will be determined. 

More important to leadership is the question: How does the proposed rule change the economics of the services that we provide?

Perhaps for one organization, the greatest risk will come in the form of Practice Expense redistribution.

Another may need to consider G2211. RPM/RTM may carry the greatest risk or the greatest opportunity for cardiology practices, whereas those of us in procedural groups may want to focus on global-procedure and E/M payments more closely. 

This analysis begins with the claims data rather than the percentage. CMS generates the policies.

Leadership has the mandate to transform those policies into revenue, margins, and impact on workforce and infrastructure decisions.

Prepare Your Revenue Cycle for the 2027 Medicare PFS 

When you read about this year’s 2027 Medicare Physician Fee Schedule (MPFS) proposed rule, don’t mistake its impact on the Medicare conversion factor for its potential overall effect on your practice.

Changes to CPT reimbursement, RVUs, E/M billing, G2211, RPM/RTM, telehealth, prior authorization, quality reporting and revenue-cycle workflows may also be affected by changes outlined in the proposed rule.

Consider asking these questions instead of focusing solely on the headline percentage:

What are the top-revenue-generating codes/services/workflows in our practice, and will they be impacted by these proposed 2027 changes? 

A code level review need to be conducted to better understand possible reimbursement risk areas, necessary billing system updates, and documentation gaps that should be addressed ahead of potential finalization of the 2027 policies.  

Note: This article discusses the CY 2027 Medicare Physician Fee Schedule proposed rule. CMS may modify individual provisions before publishing the final rule.