Molly Riley / White House (April 2025)
Medicare is changing what it pays doctors in 2027, and the result is more complicated than a single pay cut. Some same-day services will bring in less money, while approved groups of doctors may get a new way to lower certain patients’ out-of-pocket bills.
The Centers for Medicare & Medicaid Services released its final 2027 Physician Fee Schedule on Wednesday. Most of the payment changes begin January 1, 2027. The separate option to reduce patient cost sharing through approved Accountable Care Organizations starts April 1.
For patients, this does not mean every doctor visit suddenly becomes cheaper. For practices, it does not mean every service pays exactly the same percentage less. The effect depends on the service, how it is billed and the clinician’s payment-program status.
The baseline payment number falls
According to CMS’s final-rule fact sheet, the conversion factor for clinicians who do not qualify through an advanced alternative payment model falls from $33.40 to $32.63, a 2.31% reduction. For qualifying participants, it falls from $33.57 to $32.95, a 1.83% reduction.
The conversion factor is a dollar multiplier used in the payment formula. The amount paid for an individual service also depends on its assigned relative value and geographic adjustments. A reduction in that multiplier is therefore not the same thing as saying every physician’s total income, or every Medicare payment, drops 2.31%.
CMS says the decline reflects the expiration of a temporary 2.5% increase Congress provided for 2026, partly offset by statutory updates, along with an adjustment tied to changes in the work values assigned to services.
A visit and a procedure on the same day
The final rule reduces payment when a separately identifiable office or outpatient evaluation visit is billed on the same day as a procedure with a zero-day global period. That is Medicare’s billing category for procedures whose bundled payment does not include a longer postoperative period.
Under the final policy, the higher-priced service is paid in full and the other qualifying same-day service is paid at 80%, a 20% reduction. CMS narrowed the rule from its proposal: procedures with 10-day and 90-day global periods are not included in this new reduction, and the agency did not adopt the proposed 50% cut.
CMS describes the change as a way to avoid paying twice for overlapping clinical work. Medical practices see a different risk: less payment for providing a visit and procedure together. Fierce Healthcare reported that the Medical Group Management Association criticized the same-day reduction and the conversion-factor cuts, arguing they add financial pressure to practices.
Patients should not read the 20% figure as a guaranteed discount on the whole appointment. It applies to payment for the lower-priced qualifying service, not an across-the-board reduction in every bill.
Possible out-of-pocket relief, with limits
Starting April 1, approved Accountable Care Organizations may reduce or eliminate Part B cost sharing for eligible patients and services under an implementation plan approved by CMS. These organizations bring providers together around responsibility for the quality and cost of care.
The Shared Savings Program fact sheet makes clear that this is optional and requires approval. It excludes prescription drugs and durable medical equipment, prosthetics, orthotics and supplies. It is not a nationwide waiver of every Medicare copay.
A useful question for a patient is whether their doctors participate in an approved cost-sharing arrangement and whether the particular service and patient qualify. The rule creates the possibility of relief; it does not establish that relief for everyone today.
Other deadlines doctors need to watch
Traditional Merit-based Incentive Payment System reporting ends beginning with the 2031 performance year, according to HHS’s announcement. Clinicians have through 2030 to transition to MIPS Value Pathways or advanced alternative payment models.
CMS also delayed until January 1, 2029 a restriction allowing payment for remote monitoring only when the work is performed by clinical staff employed by the practice rather than contractors. Other remote-monitoring changes begin in 2027.
The practical takeaway is to separate the dates and the dollars: January brings revised doctor-payment rules, April can bring approved patient cost-sharing relief, and later reporting and staffing deadlines give practices more time to prepare.
JBizNews Desk | Washington
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