2027 Medicare Physician Fee Schedule Final Rule Released

On November 4, 2026, the Centers for Medicare and Medicaid Services (CMS) released the 2027 Medicare Physician Fee Schedule (PFS) final rule. The PFS includes programmatic and reimbursement policies affecting physicians who provide services to Medicare beneficiaries, changes to the Merit-based Incentive Payment System (MIPS), and alternative payment model (APM) participation provisions.

Michigan State Medical Society (MSMS) is reviewing the final rule and will provide a more detailed overview in an upcoming Medigram, along with grassroots action alerts to urge Congress to address Medicare payment and other concerning policies finalized in the PFS, such as Modifier 25. In the meantime, below are some key issues in the final PFS.

Rate Setting and Conversion Factor

The finalized Medicare payment update does not reflect the growth in physician practice costs and represents a reduction in the 2027 conversion factors for physicians.

Practice Expense Methodology

The final rule revises the methodology for determining practice expense relative value units (RVUs).

Modifier 25 With 0-Day Global Codes

CMS modified its original proposal by finalizing a 20 percent reduction in payment, instead of 50 percent, when a separately identifiable office/outpatient evaluation and management (E/M) visit is furnished on the same day as a service with a 0-day global period. The highest-valued service will be paid at 100 percent, while the other applicable service or services will be paid at 80 percent. CMS did not include 10-day or 90-day global procedures in the final policy.

HCPCS Code G2211 Redesign

Healthcare Common Procedure Coding System (HCPCS) code G2211 will become a modifier appended to an E/M base code. There will be two modifiers—B1 and B2. The B1 modifier will increase payment of the associated E/M code by 16 percent. The increase for B2 is 32 percent and is available only to practitioners participating in a Medicare Shared Savings Program (MSSP) accountable care organization (ACO) or as participant providers in a Long-term Enhanced ACO Design (LEAD) Model ACO. CMS indicates that claims submitted with B2 will be included in beneficiary assignment calculations, historical benchmark expenditures, and performance year expenditures for both the Shared Savings Program and the LEAD Model.

Maternity Care Services

CMS adopted the American Medical Association’s updated Maternity Care Services coding structure for 2027. The new coding structure takes effect January 1, 2027.

Remote Monitoring

The final rule requires the following updates for remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) for calendar year (CY) 2027:

1. RTM services must be furnished only to established patients.
2. Practitioners reporting RPM or RTM services must furnish a separately reportable initiating visit in association with the onset of RPM or RTM services.
3. CMS will update how these services are valued under the PFS.

The requirement to allow payment for RPM or RTM services only when performed by clinical staff employed by the practice has been delayed until January 1, 2029.

Transition from MIPS to MVPs

The final rule sunsets the traditional Merit-based Incentive Payment System (MIPS) reporting option following the CY 2030 performance period, corresponding with the 2032 payment year, and transitions to MIPS Value Pathways (MVPs) beginning with the CY 2031 performance period, corresponding with the 2033 MIPS payment year. Per CMS, MIPS-eligible clinicians will be required to report an MVP to meet MIPS reporting requirements unless they are eligible to report the Alternative Payment Model (APM) Performance Pathway (APP).

New MVPs

Three new MVPs related to diabetes, hypertension, and hospitalists are added.

For further information, MSMS Senior Director of Advocacy and Payor Relations, Stacey P. Hettiger at 517-336-5766 or shettiger@msms.org.

Resources:

• Final Medicare PFS Rule
• CMS Press Release
• CMS PFS Fact Sheet
• CMS MSSP Fact Sheet
• CMS QPP Fact Sheet