CY 2027 Medicare Physician Fee Schedule Final Rule: The Complete RCM Guide

What CMS's November 4 Final Rule Changes for Conversion Factors, G2211, Remote Monitoring and Behavioral Health Billing Before January 1

By Team Rcmaxis  ·  November 5, 2026  ·  14 min read

CMS dropped the CY 2027 Medicare Physician Fee Schedule final rule on November 4, 2026, two days before we published this, and the headline number is a cut: the standard conversion factor falls to $32.63, down 2.31% from $33.40, while clinicians in a qualifying advanced APM get $32.95, down 1.83% from $33.57. That's not the only change that touches your claims. CMS also eliminated G2211 as a standalone code, rewrote how same-day E/M visits get paid next to a global surgery procedure, and pushed a 2029 compliance deadline into your remote monitoring program. If your billing team is still working off the proposed-rule version of this story, you're already behind.

We're going to walk through every piece that actually matters for revenue cycle work, not just the policy press release version. Some of these changes raise your payment per visit. Others quietly cut it. A few create new compliance exposure you need to plan for before January 1, 2027, when most of this takes effect.

The 2027 Conversion Factor Cut: What It Costs You Per Claim

Here's the mechanic behind the headline number: Congress gave Medicare physician payment a one-year 2.50% conversion factor bump for CY 2026 under Public Law 119-21, and that bump expires on schedule at the end of this year. CMS layered a small statutory update on top, +0.75% for qualifying APM participants and +0.25% for everyone else, and then subtracted an estimated 0.12% for finalized work RVU changes. Net it out and you land at $32.95 for APM-qualifying clinicians and $32.63 for the rest of the physician community, down from $33.57 and $33.40 respectively.

Run the math on your own payer mix before you assume this is a rounding error. A mid-size cardiology or orthopedic group billing $4 million a year in Medicare-allowed charges is looking at roughly $80,000 to $92,000 in lost reimbursement from the conversion factor change alone, before you account for any RVU-level changes to your specific code mix. That's an illustration based on the percentage cuts above, not a CMS-published practice-level estimate, so run your own numbers against your actual 2026 Medicare revenue rather than borrowing ours.

G2211 Is Retired: Modifiers B1 and B2 Take Its Place

CMS finalized a structural change to how it pays for the complexity of an ongoing patient relationship. G2211, the add-on code that paid roughly $16 to $17 when billed alongside a standard office visit, is converted into modifier B1, which raises the payment on the base E/M code itself by 16%. The dollars land in the same place either way, but the mechanics of how a claim gets built, and how a practice tracks which visits qualify, change because this is now a modifier decision made at the line-item level rather than a second code added to the claim.

A second, more selective option also debuts: modifier B2, worth a 32% bump on the base E/M payment, but it's only available to practitioners participating in a Medicare Shared Savings Program ACO or a LEAD Model. CMS made B2 voluntary and lets a practitioner apply it to any beneficiary they serve, not only patients formally assigned to their ACO. The trade-off is real, though: claims billed with B2 count toward beneficiary assignment, benchmark calculations and performance-year expenditures for that ACO, so a billing decision now has downstream effects on a value-based contract's numbers. We've written a full claim-level breakdown of exactly when to use B1 versus B2, how documentation requirements carry over from the old G2211 rules, and what to check in your EHR's charge capture templates before January 1, in our G2211 to modifier B1/B2 billing guide.

Global Surgery Billing: The Same-Day E/M Payment Change

This is the provision that generated the most pushback during the comment period, and CMS softened it in the final rule without dropping it. When a practitioner bills a separately identifiable office or outpatient E/M visit on the same day as a 0-day global-period procedure, Medicare pays the highest-valued of the two services at 100% and the other service at 80%. CMS's July proposal would have paid the second service at only 50% and would have extended the policy to 10- and 90-day global procedures. Both of those got walked back in the final rule, so if you modeled your 2027 budget off the proposed 50% figure, your actual exposure is smaller than you planned for, which is rare good news in this rule.

The practical effect still touches a lot of specialty billing. Dermatology, orthopedics, general surgery, ophthalmology, and any practice that regularly bills a modifier 25 visit alongside a minor procedure on the same date of service needs to re-run their claims-level math at the new 80% rate rather than the old 100%/100% split some practices were effectively getting under prior policy. We cover the specific billing workflow, which service to bill as primary, and how to catch this in your clearinghouse edits before the claim goes out, in a short policy brief at our global surgery E/M payment update.

Remote Monitoring, Behavioral Health and the RHC/FQHC Changes

Three separate provisions change how remote patient monitoring (RPM) and remote therapeutic monitoring (RTM) programs need to run in 2027. RTM is now limited to established patients only. A separately reportable initiating visit is required whenever a new RPM or RTM episode begins, which means you can no longer enroll a patient into monitoring without a billable visit anchoring that decision in the chart. The practice expense side of RPM/RTM valuation was also updated, which will move the payment rate slightly depending on your specialty mix.

The one piece of genuinely good news: the proposed requirement that RPM and RTM work be performed only by practice-employed clinical staff, which would have forced many practices to bring outsourced monitoring vendors in-house or drop the program, is delayed to January 1, 2029. That buys roughly two extra years to restructure a contracted monitoring arrangement instead of doing it under a January 1, 2027 deadline. Our RPM/RTM 2027 final rule update walks through exactly what to check in your current monitoring vendor contracts and enrollment workflow.

On the behavioral health and primary care side, CMS finalized two new advance care planning codes, G0572 and G0573, which cover clinical staff performing ACP services under direct physician supervision, while CPT 99497 and 99498 are now limited to time the billing practitioner personally spends with the patient. That's a meaningful documentation shift if your practice has been letting clinical staff log ACP time under the physician's NPI. CMS also finalized new coding for shared medical and group visits, with an add-on time component, as part of the final year of the timed behavioral health code transition, along with increased work RVUs for the Psychiatric Collaborative Care Model and updated clinical labor rates for behavioral health care managers. Rural Health Clinics and FQHCs picked up their own update: Diabetes Self-Management Training and Medical Nutrition Therapy are now covered as qualified preventive services paid at the all-inclusive rate, and the Consolidated Appropriations Act, 2026 extended the waived in-person requirement for RHC/FQHC mental health visits and telecommunication-based non-behavioral visits through December 31, 2027. Full ACP billing mechanics, including exactly how G0572 and G0573 interact with 99497/99498 on the same claim, are in our advance care planning code update.

The Compliance Section: 340B Reporting and the CLFS Rate Cap

Two provisions in this rule are compliance deadlines dressed up as payment policy, and they deserve the same attention your team gives an OIG Work Plan item. First, covered entities that participate in the 340B drug pricing program must now submit Part D claims data for 340B-discounted units, starting with dates of service on or after January 1, 2027. The first mandatory quarterly submission, covering January 1 through March 31, 2027 dates of service, is due September 30, 2027. If your organization runs a 340B pharmacy program alongside its physician billing, this is a new, dated reporting obligation that didn't exist before this rule, and missing the September 30 deadline is the kind of gap an OIG or MAC review would flag on the standard 36-month lookback.

Second, CMS capped how much the Clinical Laboratory Fee Schedule can cut private-payor-based rates in any single year at 15%, running through CY 2029. That's a ceiling on how fast lab reimbursement can fall, not a rate increase, so if your practice runs in-office lab testing or bills a reference lab under arrangement, model your lab revenue against the capped rate rather than the uncapped cut CMS originally had authority to apply. Neither of these provisions got much coverage outside specialty trade press, which is exactly why they're easy to miss until a payer remittance or a 340B audit letter surfaces the gap.

Frequently Asked Questions About the CY 2027 Physician Fee Schedule

What is the 2027 Medicare physician fee schedule conversion factor?

CMS finalized $32.95 for clinicians who qualify as advanced APM participants, down 1.83% from $33.57, and $32.63 for everyone else, down 2.31% from $33.40. The cut traces mostly to a one-year 2.50% conversion factor bump from 2025's budget law expiring at the end of CY 2026, not a new reduction CMS invented on its own.

Did CMS really eliminate G2211?

Yes. The CY 2027 final rule converts G2211 from a standalone add-on code into modifier B1, which raises payment on the base E/M code by 16%. A second modifier, B2, pays a 32% bump for practitioners in a Shared Savings Program ACO or LEAD Model, but using it pulls that visit into ACO assignment and benchmark calculations. We cover the claim-level mechanics in a separate guide.

Is the same-day E/M and procedure payment cut really happening in 2027?

A version of it, yes, but it is smaller than CMS originally proposed. When a practitioner bills an office or outpatient E/M visit on the same day as a 0-day global procedure, Medicare now pays the highest-valued service at 100% and the other service at 80%. CMS dropped its proposal to apply this to 10- and 90-day global procedures and dropped the proposed 50% rate in favor of 80%.