Guides Rule changes

The 2027 Medicare physician fee schedule: what changes for small practices

By Marlow’s billing manager, 20+ years in medical billing, former billing manager at Mount Sinai South Nassau, Oceanside · Updated November 9, 2026 · 8 min read

The short answer

Medicare’s 2027 conversion factor drops 2.31% to $32.63 for clinicians who are not qualifying APM participants, G2211 becomes modifier B1, and an office visit billed with a 0-day procedure on the same day loses 20% on the lower-paid service. At the Long Island locality, 99213 and 99214 fall about 4% while 90837 rises about 10%.

CMS released the calendar year 2027 Medicare Physician Fee Schedule final rule on November 4, 2026, and it was published in the Federal Register on November 9, 2026. The changes take effect for services on or after January 1, 2027. The short version: the conversion factor for most clinicians falls 2.31% to $32.63, the G2211 add-on code becomes modifier B1, and Medicare will pay 20% less for the lower-paid service when an office visit with modifier 25 is billed on the same day as a 0-day global procedure.

This guide covers the changes that reach a small independent practice, with Long Island payment amounts for four common codes, and a checklist for the weeks before January 1. Figures are as of November 2026 and come from the final rule and the files CMS posted with it.

The conversion factor

The conversion factor turns relative value units (RVUs) into dollars. Since 2026 there have been two: a higher one for qualifying APM participants (QPs) and a lower one for everyone else. Unless your clinicians are QPs through an Advanced APM, the first row is the one that applies.

Conversion factor	2026	2027	Change
Not a qualifying APM participant (most practices)	$33.4009	$32.6286	−2.31%
Qualifying APM participant (QP)	$33.5675	$32.9548	−1.83%

Why it falls: the statute gives a small update for 2027 (+0.25% for non-QPs, +0.75% for QPs), and budget neutrality takes off 0.12%. But the one-year 2.5% increase that Congress added for 2026 expires on December 31, 2026, and that loss outweighs the update. CMS describes this as current law requiring a 2.5% reduction compared with 2026 (CMS fact sheet).

The conversion factor is only half of the story. RVUs also changed code by code, so some services go up while the conversion factor goes down.

What it means on Long Island

Nassau and Suffolk are in Medicare locality 02, “NYC suburbs/Long Island”, which also covers the Bronx, Brooklyn, Staten Island, Rockland and Westchester. Queens is a separate locality (04). Each locality has its own geographic adjustments (GPCIs), and they shifted slightly for 2027.

The table below shows the non-facility (office) amount for one unit of each code at locality 02, for clinicians who are not QPs. We calculated it from CMS’s RVU and GPCI files using CMS’s payment formula: work RVU × work GPCI, plus practice expense RVU × PE GPCI, plus malpractice RVU × MP GPCI, times the conversion factor.

Code (paraphrased)	2026 office amount	2027 office amount	Change
99213, established patient office visit, low complexity	$109.76	$105.59	−3.8%
99214, established patient office visit, moderate complexity	$156.34	$150.43	−3.8%
90837, psychotherapy, 60 minutes	$183.23	$201.77	+10.1%
97110, therapeutic exercise, each 15 minutes	$32.90	$33.12	+0.7%

How to read it:

These are Medicare allowed amounts, which include the patient’s 20% coinsurance. They are before sequestration and before any multiple procedure reduction (97110 is cut further on second and later therapy units under Medicare’s therapy rules).
Our arithmetic can differ from the published fee schedule by a few cents. Wellpoint Federal (formerly National Government Services, or NGS), the Medicare contractor for New York, publishes the official 2027 amounts; check those once they are posted.
Psychotherapy rises because both the work and practice expense RVUs for these codes went up. 2027 is also the last year of CMS’s four-year phase-in of higher values for timed behavioral health services.

The changes that matter, one by one

G2211 becomes modifier B1

From January 1, 2027, HCPCS code G2211 is no longer payable. In its place:

Modifier B1 goes on the office or home visit itself and pays more for visits that are part of an ongoing relationship (the continuing focal point for a patient’s care, or ongoing care for a single serious or complex condition). The qualifying rules are the same as for G2211.
Modifier B2 pays twice as much as B1 and is only for clinicians in a Medicare Shared Savings Program ACO, ACO PC Flex or the LEAD model. It is optional.
The limit on using it with modifier 25 carries over unchanged.

One open question: CMS’s rule text and fact sheet describe B1 as 16% of the visit’s payment, but the companion file CMS posted to show B1 values applies the 16% to the work RVUs only, which gives a much smaller amount. Our G2211 to B1 guide explains the gap and what to change in your system.

The 80% rule for same-day visits and 0-day procedures

When a separately identifiable office visit (billed with modifier 25) happens on the same day as a procedure with a 0-day global period, by the same clinician or another clinician of the same specialty in the same group, Medicare will pay the highest-paid service in full and every other service on that day at 80%.

CMS had proposed 50% and wanted to include 10-day and 90-day global procedures. The final rule settled on 20% off and 0-day globals only. CMS expects the biggest effect on dermatology, otolaryngology and podiatry, with smaller effects on hand surgery, physician assistants and colon and rectal surgery (final rule, 91 FR 71118–71122 and 71653–71655).

CMS also wrote that it does not expect practices to bring patients back on another day to avoid the cut, and that it will watch claims for that pattern. Our modifier 25 guide covers it in detail.

Global surgery data collection is paused

Under section 523 of MACRA, practices with 10 or more clinicians in nine states had to report post-operative visits with the no-pay code 99024. New York was never one of the nine. For 2027, CMS is pausing that data collection.

Remote monitoring

For remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM), CMS finalized three changes for 2027:

RTM may only be furnished to established patients.
RPM and RTM both need a separately reportable initiating visit when the service starts.
Both families were revalued.

A fourth proposal, paying only when the practice’s own employed clinical staff do the monitoring (not a vendor), was delayed to January 1, 2029.

Telehealth

The Consolidated Appropriations Act, 2026 extended Medicare’s telehealth flexibilities (no geographic limits, the expanded list of originating sites, the wider list of eligible practitioners) through December 31, 2027. The in-person visit requirement for tele-mental health does not apply to services through that date, and audio-only telehealth is extended too.

New for January 1, 2027: two telehealth modifiers, BB and BC, required by the same law. They do not change payment. They apply when a telehealth service is furnished through a virtual platform the clinician contracts with or pays to use, and when a telehealth service is furnished incident to a clinician’s service. CMS says detailed guidance will be posted on its website.

Advance care planning

New codes G0572 (first 20 minutes) and G0573 (each additional 20 minutes) cover advance care planning done by clinical staff under the direct supervision of the billing clinician. From 2027, 99497 and 99498 are for time the billing clinician spends personally.

Other new codes

G0686 and G0687: shared medical appointments (group visits), with an add-on for extra time.
G0576: an add-on to an office or home visit for each 15 minutes the clinician personally spends on the diagnosis and treatment of vaccine adverse effects.

MIPS

The performance threshold stays at 75 points for the 2027 performance year. CMS also set an end date for traditional MIPS: it stays available through the 2030 performance year, and from the 2031 performance year clinicians not in an APM will have to report through a MIPS Value Pathway (MVP). The proposal had been two years sooner.

Efficiency adjustment

The 2.5% efficiency adjustment to work RVUs, started in 2026 for codes that are not time-based, is applied every three years. CMS did not apply a new round for 2027, but the 2026 reduction stays in the values.

Specialty impacts

CMS publishes an estimate of how the RVU changes move total Medicare allowed charges for each specialty. These numbers do not include the conversion factor change, so the full effect is roughly each figure below minus about 2.3%.

Specialty	Estimated 2027 impact of RVU changes
Clinical social worker	+11%
Clinical psychologist	+9%
Physical and occupational therapy	+3%
Psychiatry	+2%
Nurse practitioner	+2%
Family practice	+1%
Internal medicine	+1%
Chiropractic	+1%
Cardiology	0%
Podiatry	−1%
Interventional pain management	−2%
Dermatology	−4%
Orthopedic surgery	−6%

Source: CMS, CY 2027 PFS Final Rule Estimated Impact on Total Allowed Charges by Specialty (updated November 5, 2026). These are averages across a specialty. Your own mix of codes decides your own number.

If you have Medicare Advantage or commercial contracts

This rule sets traditional Medicare rates. CMS says in the rule that it does not directly govern how Medicare Advantage plans pay their contracted providers. Still, if any of your contracts pays a percentage of the Medicare fee schedule, the 2027 changes may flow through to it. Check three things in each contract: whether it is tied to Medicare, which year’s schedule it uses, and when it updates.

The same applies to G2211. A plan that paid G2211 in 2026 will not necessarily accept modifier B1 on January 1. Look for each plan’s 2027 bulletins.

What to do before January 1

Load the 2027 Medicare amounts into your practice management system as soon as Wellpoint Federal posts them, and reset any fee schedule reports that compare paid amounts to expected.
Replace G2211 in your charge templates with modifier B1 on the visit line. Add B2 only if your clinicians are in a Shared Savings Program ACO, ACO PC Flex or LEAD.
Check how your system handles a fifth modifier. CMS says to use modifier 99 in the fourth position and list the rest in the claim narrative when more than four are needed.
Review your same-day visit and procedure workflow for 0-day global codes. Expect 20% less on the lower-paid service, and do not change scheduling just to avoid the reduction.
For RPM and RTM, confirm each new patient has an initiating visit on file and that RTM patients are established.
Set up G0572 and G0573 if clinical staff do advance care planning conversations.
Add telehealth modifiers BB and BC to your system once CMS posts the guidance, if they apply to you.
List every payer contract that refers to Medicare rates and note when each one updates.
Run a baseline: your 2026 Medicare payments by code, so you can compare the first 2027 remittances against it.

Sources

General information, not advice on a specific claim, contract or legal question. Rules and rates change; check the linked sources for the current version. CPT® is a registered trademark of the American Medical Association. Code descriptions here are paraphrased.