Physician advocates urge Congress to counter cuts in final 2027 Medicare Physician Fee Schedule

Medicare’s final 2027 payment rule gives primary care practices new ways to bill for prevention and behavioral health, but it also cuts the conversion factor more deeply than the federal government first proposed.

Physician organizations are praising the first and warning about the second.

The Centers for Medicare & Medicaid Services (CMS) finalized the 2027 Medicare Physician Fee Schedule on Nov. 4, effective Jan. 1, 2027. The conversion factor, the dollar amount Medicare multiplies by a service’s relative value units to set payment, falls to $32.95 for clinicians in qualifying advanced alternative payment models, down 1.83% from $33.57. For all other clinicians, it drops to $32.63, down 2.31% from $33.40. CMS had proposed cuts of 1.19% and 1.68% in July.

Groups press Congress to stop the cuts

The Medical Group Management Association (MGMA) said it is disappointed by the cuts.

“Conversion factor cuts of 1.83% for qualifying APM participants and 2.31% for all other clinicians further degrade an already fragile payment system and amplify severe financial challenges caused by years of inadequate Medicare reimbursement,” Anders Gilberg, MGMA senior vice president of government affairs, said in a statement.

The Primary Care Collaborative (PCC) said budget neutrality requirements mean Medicare will apply across-the-board payment reductions on Jan. 1 unless Congress steps in.

“We urge Congress to take immediate steps to address the harmful payment cuts imminent in the new year,” PCC President and CEO Ann Greiner said in a news release.

The American Academy of Neurology (AAN) said it is “deeply concerned with year over year cuts to physician payments and is committed to working with Congress to avert this cut before it goes into effect for 2027.” It supports “an inflationary adjustment tied to the Medicare Economic Index.”

New pay for coaching, group visits and behavioral health

For primary care, the rule’s biggest news may be prevention. PCC said CMS finalized several policies the group sought, including practice expense reforms and a new option for accountable care organizations (ACOs) to waive beneficiary cost-sharing for Part B services.

“We’re grateful that CMS appears to have doubled-down on its commitment to strengthening whole-person primary care by establishing reimbursement for health coaching, shared medical appointments and more resources for behavioral health integration,” Greiner said.

PCC said the final rule also:

• Clarified that health coaching can be offered under general supervision
• Increased reimbursement for the Psychiatric Collaborative Care Model and updated pricing for behavioral health care managers
• Added flexibility for shared medical appointments, which may be used for lifestyle-modifiable conditions

Shared medical appointments are team-based group visits that combine a medical visit with education and behavioral support. The American College of Lifestyle Medicine (ACLM) said the final rule strengthened CMS’s original proposal by adding payment for longer sessions.

“It is one small step in the evolution of payment policy, but an important leap toward a future in which lifestyle medicine is accessible to everyone as part of standard care delivery,” ACLM CEO John Findley, M.D., said in a news release.

Billing changes that touch every visit

CMS converted the add-on code G2211, which covers the complexity of ongoing care, into a modifier. The modifier, B1, raises payment for the associated evaluation and management (E/M) visit by a flat 16%, according to CMS. Clinicians in the Medicare Shared Savings Program or the LEAD Model can use modifier B2, which raises payment by 32%.

Accountable for Health CEO Mara McDermott, J.D., cited the 32% increase as a meaningful step away from fee-for-service payment, she said in a statement. The group was disappointed, though, that CMS did not extend the enhanced modifier to clinicians in the Comprehensive Kidney Care Contracting Model.

On same-day services, CMS finalized payment of 100% for the higher-cost service and 80% for the other when an office visit and a minor procedure occur together. That is less severe than the 50% CMS proposed for the lower-cost service. MGMA objected to the 20% reduction for office visits billed with modifier 25, which Gilberg said is “interfering with physician practices’ ability to offer same-day care.”

Accountable care changes

Starting April 1, 2027, approved ACOs may reduce or eliminate Part B cost-sharing for many services, CMS said. The National Association of Accountable Care Organizations (NAACOS) said it applauds the rule. NAACOS credited CMS with:

• Improving benchmarking, including a larger prior savings adjustment and guardrails on the Accountable Care Prospective Trend
• Adding benchmark adjustments to encourage ACOs to recruit practices inexperienced with financial risk
• Simplifying quality reporting requirements
• Expanding flexibility to reduce beneficiary cost-sharing

McDermott said the rule raises the credit ACOs receive for prior-year savings from 50% to 75%. She also voiced concern about “reductions to regional benchmark adjustments” and continued pressure on physician payments. MGMA acknowledged “modest policy improvements to enhance value-based care” in the Medicare Shared Savings Program.

Specialty voices, obstetric codes and remote monitoring

The American Association of Orthopaedic Surgeons (AAOS) said proposed cuts to total knee, total hip and total shoulder arthroplasty and shoulder hemiarthroplasty “were reduced by nearly 50%.”

“Today’s decision represents meaningful progress for patients and the physicians who care for them,” AAOS President Wilford K. Gibson, M.D., said in a news release. He thanked lawmakers for raising concerns about the effect on physician practices, “particularly independent practices and those serving rural or underserved communities.”

The American College of Obstetricians & Gynecologists (ACOG) thanked CMS for including the American Medical Association’s new obstetric codes in the final rule. ACOG said the G-codes proposed over the summer were not included.

“This new system represents an important step forward for patients and ob-gyns alike, replacing a one-size-fits-all bundled payment approach with a coding framework that more accurately reflects and supports the individualized care that is the hallmark of ob-gyn practice,” ACOG President Camille A. Clare, M.D., said in a statement.

The American Medical Association (AMA) also applauded the change. AMA President Willie Underwood III, M.D., said in a news release that CMS’ adoption of modernized maternal care codes is “a significant step to advance maternal health in the United States.” The 30-year-old global maternity care bundle will be replaced Jan. 1, 2027, he said.

ACOG said health plans may use 2026 maternity care codes for pregnancies that begin in 2026 and end in 2027. First prenatal visits in 2027 will use the new codes.

The Peterson Center on Healthcare focused on remote monitoring, which it called “a cautionary tale about what happens when payment rewards volume rather than patient outcomes.” Executive Director Caroline Pearson said CMS’s changes “are a check against the rapid growth of these services.” She warned that some providers and vendors may stop delivering remote monitoring.

“What comes next has to be smarter: payment tied to clinical outcomes and targeted to the patients who benefit, so it builds confidence instead of eroding it,” Pearson said in a statement.

What’s next

The rule takes effect Jan. 1. Groups from primary care to orthopaedics say the conversion factor is a job for Congress. MGMA wants Congress to fix the conversion factor and modifier 25 changes immediately. To prevent annual disruption, Gilberg said, lawmakers should prioritize comprehensive reform of the Medicare Access and CHIP Reauthorization Act (MACRA) by passing the Patients First Act.