How the 2027 Medicare Physician Fee Schedule Conversion Factor Cut Changes What Your Practice Gets Paid

The 2027 Medicare Physician Fee Schedule proposed rule sets the conversion factor at $32.8409 for most clinicians, a 1.68% drop from the current $33.4009. Clinicians who count as qualifying Advanced APM participants (QPs) get $33.1693, down 1.19% from $33.5675. CMS released the proposal on July 14, comments closed September 14, and the final rule is due in November, with new rates starting January 1, 2027.

The drop comes from plain arithmetic. Congress gave physicians a one-time 2.5% bump through the Working Families Tax Cut legislation, and that bump expires on December 31. What replaces it is much smaller.

• The MACRA statutory update adds 0.25% for non-QPs and 0.75% for QPs.
• CMS adds an estimated 0.53% to balance proposed changes in work RVUs for some services.
• Take away the expiring 2.5%, and both factors land below today’s rates.

Those two numbers only matter once you know which one CMS will apply to each of your clinicians, and that choice was locked in long before this rule came out.

Which 2027 Medicare Conversion Factor Applies to Your Clinicians

The higher QP conversion factor in 2027 goes only to clinicians who earned QP status during the 2025 QP performance period, because CMS sets each payment year’s status from performance two years earlier. Nothing your clinic signs or joins this fall changes the rate you get in January.

• QP status comes from meeting payment or patient-count thresholds through an Advanced APM, measured at set snapshots during the performance period.
• Clinicians in the same practice can land on different conversion factors for the same code if only some of them sit on an Advanced APM participant list.
• You can confirm each clinician’s status by NPI in the CMS participation lookup.
• QPs lose one perk next year. The APM incentive payment is unavailable for the 2027 payment year and returns in 2028 as a 3.1% lump sum.

For most independent clinics outside an Advanced APM, every claim will price at the non-QP rate, which makes the non-QP rate the one to run through your own codes.

What the 2027 Conversion Factor Cut Means per Visit

At the non-QP rate, the 2027 conversion factor trims about $1.59 from a 99213 and $2.28 from a 99214, as long as each code keeps its current RVUs. Medicare prices a service by multiplying its total RVUs (work, practice expense, and malpractice, each adjusted for your locality) by the conversion factor, so the cut grows with the RVUs a visit carries.

Code	Office total RVUs	Current national payment	At proposed 2027 CF	Change per visit
99213	2.85	$95.19	$93.60	−$1.59
99214	4.06	$135.61	$133.33	−$2.28
99215	5.76	$192.39	$189.16	−$3.23

The current figures come from the CMS final-rule E/M rate table compiled by the American Urological Association, and the 2027 column applies the proposed non-QP rate to the same RVUs before geographic adjustment.

Two details shape what reaches your bank account.

• Medicare pays 80% of the allowed amount and the patient or a secondary plan owes 20%, so a smaller allowed amount also shrinks the coinsurance your front desk collects.
• The 2% sequestration reduction, now set in law through fiscal 2032, comes off Medicare’s 80% share only, while the patient’s 20% is still figured on the full allowed amount.

Per visit, the losses look small. Across 1,000 Medicare 99214 visits in a year, the conversion factor alone removes about $2,280. That math holds only if RVUs stay put, and the 2027 proposal moves RVUs too.

Why 2027 RVU Changes Move Some Specialties More Than the Conversion Factor

RVU changes in the 2027 proposal outweigh the conversion factor for several specialties. CMS’s specialty impact table, which leaves out the conversion factor effect, shows dermatology and otolaryngology down 9% and orthopedic surgery down 7% from RVU changes alone, according to an HFMA brief. Family practice moves the other way, with CMS projecting about a 1% gain in total allowed charges, which the AAFP credits to valuation updates that soften part of the conversion factor cut.

Three forces drive that spread.

• Practice expense methodology: CMS proposes to lean less on specialty-specific practice expense per hour survey data, starting a multiyear move toward more objective cost data.
• Work RVU revisions: The 0.53% added to the conversion factor exists because CMS is revaluing work for some services and has to keep total spending level.
• Budget neutrality: Any RVU change projected to raise spending by more than $20 million forces an offsetting cut across the whole fee schedule, a limit that has stood for decades.

That last rule is why a change aimed at one kind of service ripples across the whole fee schedule, and the 2027 proposal reshapes office E/M payment in two ways that hit claims directly.

How Same-Day E/M Payment Cuts Stack on the 2027 Conversion Factor

When an office E/M visit and a procedure with a 0-, 10-, or 90-day global period happen on the same day, the 2027 proposal pays the more expensive service in full and the other at 50%. The rule applies whether one physician does both or a colleague in the same group bills one of them.

• Modifier 25 still gets the visit paid, at half rate whenever the procedure is the pricier service.
• A 99213 billed next to a pricier minor procedure would drop from about $93.60 to $46.80, a loss roughly 29 times larger than the conversion factor cut on that same visit.
• CMS argues the shared work creates duplicate payment. It floated a narrower version in the 2019 proposed rule and did not finalize it. An AMA-led coalition letter sent in August urges CMS to drop the 2027 version too.

The exposure concentrates in procedure-heavy clinics. A Milliman analysis commissioned by the American Academy of Dermatology Association estimates the policy would remove about $969 million in Medicare allowed amounts overall, measured in 2024 terms, and about 6.1% of total Part B allowed for dermatology. Ophthalmology, pain management, ENT, urology, orthopedics, and family medicine practices that pair visits with injections or minor procedures sit in the same path.

Primary care clinics that rarely do same-day procedures face a different E/M change, one that rewrites how longitudinal care gets paid.

How the 2027 G2211 Modifier Changes Longitudinal Care Payment

The 2027 proposal deletes G2211 as a separate add-on code and replaces it with a modifier that raises the E/M payment by 16%, so the bonus scales with visit level. Today G2211 pays a flat $17.37 in the office, the same amount on a 99213 as on a 99215.

Visit level	Flat G2211 today	16% modifier at proposed 2027 rate
99213	$17.37	$14.98
99214	$17.37	$21.33
99215	$17.37	$30.27

A panel built mostly on 99213 visits loses a little on every longitudinal visit, while 99214 and 99215 visits come out ahead.

• A second modifier pays 32% for clinicians in Medicare Shared Savings Program ACOs and the LEAD model.
• The 2027 column holds current RVUs at the proposed rate, so final amounts will shift with the final RVUs.
• G2211 already has a budget neutrality history. MGMA staff said its original rollout pulled roughly $1 billion out of the fee schedule.

The modifier changes only what Medicare pays directly, yet the conversion factor underneath it reaches into payer contracts far outside traditional Medicare.

How the 2027 Medicare Rate Flows Into Your Other Payer Contracts

Any commercial or Medicare Advantage contract that pays a percentage of the Medicare fee schedule drops along with Medicare, unless the contract locks rates to a specific year. A contract at 120% of Medicare pays about $160.00 for a 99214 at the proposed rate, down about $2.73 from today.

• Medicare Advantage plans generally pay out-of-network providers what original Medicare would pay, so those claims follow the new rate automatically.
• Some contracts reprice to the current Medicare fee schedule every January 1, while others update on the contract anniversary. The wording in your fee schedule exhibit decides which.
• MIPS adjustments ride on top. The 2027 payment year applies MIPS adjustments based on 2025 performance, with a 75-point threshold and a maximum penalty of 9%, so a low score compounds the conversion factor cut on every covered fee schedule claim.

Each of these effects depends on the final number, and Congress still has a window to change it.

Will Congress Reverse the 2027 Medicare Conversion Factor Cut

A congressional fix for the 2027 conversion factor is possible but far from promised. CMS has no authority to add money to the conversion factor by regulation, so any reversal has to come from Congress before or after the November final rule.

• Congress approved temporary increases to soften fee schedule cuts in five of the last six years, MGMA’s government affairs staff noted in September.
• MGMA’s Anders Gilberg told Physicians Practice he is unsure Congress will act to stop the cut this year.
• A House bill would tie physician pay to medical inflation, replace MIPS, and raise the budget neutrality threshold to $54.3 million. Gilberg called it an important bill while noting it does nothing for the 2027 cut.
• Recent final numbers have landed close to the proposal. The current non-QP factor moved only two cents between proposed (33.4209)andfinal(33.4009), and Gilberg has said he has seen little movement between proposed and final rules under this administration.

Planning around the proposed rates is the safer bet, and that plan has to cover every clinician who bills in your clinic, including the ones Medicare pays at a fraction of the fee schedule.

How the 2027 Conversion Factor Cut Reaches NPs, PAs, Therapists, and Anesthesia

The 2027 conversion factor cut flows to every clinician Medicare pays from the fee schedule, and several of them start from a lower base. Nurse practitioners and physician assistants billing under their own NPI receive 85% of the physician rate, so a 99214 worth $133.33 at the proposed rate pays them about $113.33.

• Office services billed incident to a physician, under Medicare’s supervision rules, pay at the full physician rate, which makes those rules worth a fresh look while rates fall.
• Physical, occupational, and speech therapists bill the same fee schedule, and services furnished in whole or in part by physical or occupational therapy assistants pay at 85% of the fee schedule amount.
• Anesthesia runs on its own conversion factors, proposed at $20.2143 for non-QPs (−1.38%) and $20.4165 for QPs (−0.89%).
• Nonparticipating clinicians receive 95% of the fee schedule amount, and on unassigned claims they can bill patients up to a limiting charge of 115% of that nonpar amount, so the cut lowers that ceiling too.
• One conversion factor sets both office and facility rates. A 99214 in a hospital outpatient setting pays $84.50 today because its practice expense RVUs are lower, and the cut comes off that smaller base as well.

Your locality’s exact amounts for any code will appear in the CMS Physician Fee Schedule Look-up Tool after CMS loads the final rates, and the checklist below is built around those numbers.

What to Check Before the 2027 Medicare Fee Schedule Takes Effect

Putting those locality rates to work comes down to repricing what each type of clinician already bills and fixing the claims where the new rules bite hardest.

• Look up QP status for every rendering clinician and tag each NPI with the right conversion factor.
• Pull your top 20 Medicare codes by volume and reprice them at each clinician’s proposed conversion factor with your locality’s GPCIs.
• Run a report of office E/M visits billed on the same date as a 0-, 10-, or 90-day global procedure and total the 50% exposure by provider.
• Check the 99213 versus 99214 mix on your G2211 visits to see whether the modifier helps or hurts your panel.
• Map which visits bill under an NP or PA NPI and which bill incident to a physician, and confirm each meets Medicare’s supervision rules.
• Read the fee schedule exhibit in each commercial and Medicare Advantage contract to find when it reprices.
• Pull your 2025 MIPS final score to see which adjustment rides on next year’s claims.
• Load the final CMS fee schedule into your practice management system once it publishes, then compare January remittances against expected allowed amounts so underpayments surface in weeks instead of months.