CMS Releases Final Rule for 2027 Medicare Physician Fee Schedule

November 12, 2026

On November 4, the Centers for Medicare and Medicaid Services (CMS) released the final rule for the 2027 Medicare Physician Fee Schedule (MPFS).  

The AMA is working on a formal summary of the 2,500-page final rule. In the meantime, the MMA offers the following overview: 

Conversion Factors 

CMS finalized four conversion factors, all of which are lower than the 2026 conversion factors: 

1. $32.9548 for Medicare payments to qualified providers (QPs) in advanced alternative payment models (APMs). This reflects a 1.83% decrease from 2026. 

2. $32.6286 for Medicare payments to all physicians who are not QPs, including Merit-based Incentive Payment System (MIPS) eligible clinicians. This reflects a 2.31% decrease from 2026. 

3. $20.3068 for Medicare payments to QPs for anesthesia services. This reflects a 1.42% decrease from 2026. 

4. $20.1056 for Medicare payments to non-QPs for anesthesia services. This reflects a 1.91% decrease from 2026. 

These changes reflect: 

• Expiration of a temporary 2.5% increase for CY 2026 included in H.R. 1; 

• A 0.12% decrease due to a budget neutrality adjustment to balance proposed coding and payment policy changes finalized in the rule, compared with a positive 0.53% in the proposed rule, reflecting CMS’ decision to modify the Modifier 25 policy; and 

• A 0.5% increase for Qualified APM Participants (QPs) in Advanced Alternative Payment Models (APMs) under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). 

As CMS cuts Medicare payments, it projects that the Medicare Economic Index (MEI, a CMS measure of practice cost inflation) will rise 2.6% in 2027. The MMA and AMA continue to advocate for the passage of the bipartisan Patients First Act (H.R. 9693) to establish permanent, inflation-based updates to Medicare physician payments.  

Payment Cuts for Same-Day Procedures (Modifier 25) 

In response to advocacy by the MMA, AMA, and 150 entities across organized medicine in a joint sign-on letter, CMS scaled back a proposed payment cut for outpatient evaluation and management (E/M) services offered on the same day as a procedure, which requires a billing code modifier 25. Specifically, CMS had originally proposed to pay the highest-valued service in full but reduce payment for same-day services by 50% for procedures with 0-, 10-, and 90-day global periods. 

In the final rule, CMS instead: 

• Limited the cut to 0-day global procedures only; 

• Reduced the payment cut to 20% instead of 50%; and 

• Limited the cut to services provided by the same physician or by a physician of the same specialty in the same group practice (i.e., to allow full payments for same-day services offered by different specialists). 

The cuts take effect January 1, 2027. The AMA is exploring opportunities to secure additional changes before the effective date. 

Relative Value Unit Recommendations  

Each year, the Relative Value Scale Update Committee (RUC), a body maintained by the AMA and national specialty societies, recommends changes to relative value units (RVUs). This year, CMS adopted 90% of the RUC recommendations, including changes to RVUs associated with maternity care services, prostate biopsy, and magnetic resonance angiography.  

Maternity Services Codes 

CMS has adopted the AMA’s recommendations to update the Maternity Care Services code set effective January 1, 2027. Currently, maternity care is largely reported using one bundled, “global” code that captures nine months of care as a single service. The CPT revisions will allow care to be reported at a more granular level to improve transparency for patients, physicians, and researchers. 

Merit-Based Incentive Payment System (MIPs) 

The final rule maintains the 2026 MIPS performance threshold at 75 points through the 2028 performance year (i.e., MIPS-eligible clinicians at or below 75 points will avoid a MIPS penalty of up to 9%). In response to AMA advocacy, CMS is delaying the sunset of traditional MIPS reporting from 2029 to 2031, after which CMS will transition to a new MIPS Value Pathways (MVPs) system.  

The AMA has urged Congress to address fundamental problems with MIPS with more significant, lasting changes to the program, including, but not limited to, the Medicare Physician Data-driven Performance Payment System Act (H.R. 8622).  

Advanced Alternative Payment Model (APM) Determinations 

Starting January 1, 2027, CMS will evaluate APM Qualifying Participant (QP) status at the TIN/NPI combination level, instead of the NPI level. Under this change, APM incentive payments and QP conversion factor adjustments would only apply to the clinician’s APM-relevant TINs.  

CPT Request for Information 

In its proposed rule released July 14, CMS included a request for information (RFI) to critically analyze the AMA’s CPT coding system, CPT licensing, the CPT code development process, and the RUC. CMS accepted public comments through September 14, 2026.  

In the final rule, CMS did not propose changes to the CPT coding system for 2027. 

The MMA will continue to monitor AMA analyses of the final rule and share findings with MMA members. For more information in the meantime, contact Adrian Uphoff, manager of health policy and regulatory affairs.