Primary sources: CMS CY 2027 PFS fact sheet, Nov. 4, 2026 · CMS CY 2027 OPPS/ASC fact sheet (CMS-1850-F)

The 2027 Medicare Final Rules Reset Physician Rates and Outpatient Claim Math

CMS published the calendar year 2027 Medicare Physician Fee Schedule and Hospital Outpatient Prospective Payment System final-rule fact sheets on November 4. Qualifying APM participants move to a $32.95 conversion factor, down 1.83%. Other clinicians move to $32.63, down 2.31%. Hospital outpatient rates rise 2.3% for quality reporters, and that update is only one line in the claim calculation.

Both policies are effective for dates of service on or after January 1, 2027. CMS’s physician fee schedule notices list CMS-1848-F with a display date of November 4, 2026 and a Federal Register publication date of November 9, 2026. The fact sheets are already specific enough to rebuild conversion factors, same-day visit edits, remote-monitoring requirements, site-neutral imaging logic, and 340B drug payment.

Two conversion factors, and why both fall

Beginning in 2026, statute requires two physician fee schedule conversion factors: one for qualifying alternative payment model participants, and one for clinicians who are not qualifying participants. CMS’s November 4 fact sheet sets the 2027 updates at +0.75% for qualifying participants and +0.25% for everyone else, plus an estimated −0.12% adjustment for changes in work relative value units.

Those statutory increases do not offset the expiration of the one-year 2.50% conversion-factor increase that Public Law 119-21 provided for 2026. CMS calls that law the Working Families Tax Cut legislation and says current law therefore requires a 2.50% reduction in physician fee schedule payment relative to 2026. The net result in the fact sheet:

The American Academy of Family Physicians states the unrounded 2027 factors as $32.9548 and $32.6286, and the same 1.83% and 2.31% decreases. The American College of Radiology’s initial summary of the final rule pairs those 2027 figures with 2026 bases of $33.5675 and $33.4009. This article uses the CMS fact sheet’s rounded dollars as the primary rates. It does not estimate what the conversion-factor change does to any one group’s Medicare revenue. Specialty RVU shifts, geographic practice cost indices, and the share of services billed by qualifying participants all sit between the conversion factor and collected cash.

The American Hospital Association reports the same 1.83% and 2.31% conversion-factor reductions and does not restate the dollar rates.

What physician billing teams have to change by January 1

Same-day visits are cut, and the cut is narrower than proposed

CMS had proposed paying the most expensive service at 100% and other same-day surgical procedures or office/outpatient evaluation and management visits at 50%, including when the procedure carried a 0-, 10-, or 90-day global period. The final policy is narrower. CMS is finalizing the reduction when a separately identifiable office/outpatient E/M visit is furnished on the same day as a 0-day global procedure. The most expensive service is paid at 100%. The other same-day procedure or office/outpatient E/M is paid at 80%. The 10- and 90-day global procedures are not in the finalized same-day cut.

The AAFP opposes the policy and describes it as paying the higher-cost service in full and reducing the additional service by 20%. That description matches an 80% payment. It does not replace CMS’s limit to 0-day globals. Claim edits written from the proposed rule, at 50% and across 10- and 90-day globals, would underpay Medicare relative to the final rule.

G2211 becomes a percentage modifier, with a higher ACO version

CMS is replacing the flat-rate HCPCS add-on G2211 with a modifier on the base E/M code. Modifier B1 increases payment for the associated E/M by 16% at every level. Modifier B2 increases that payment by 32%. B2 is only for practitioners in a Medicare Shared Savings Program ACO or participant providers in a Long-term Enhanced ACO Design (LEAD) Model ACO.

B2 is voluntary. Under the Shared Savings Program it may be billed for beneficiaries the ACO participant or provider treats, not only assigned beneficiaries. The same is true for LEAD-aligned beneficiaries: B2 may be billed for beneficiaries the participant provider treats. CMS says claims submitted with B2 are included in beneficiary assignment, historical benchmark expenditures, and performance-year expenditures for both models. That is a coding decision and a value-based-care accounting decision. A charge-capture workflow that adds B2 because it pays more, without confirming ACO participation, creates a compliance problem. A workflow that adds it correctly changes the spend CMS uses to judge the ACO.

Remote monitoring: new 2027 edits, and a contractor rule that waits until 2029

CMS is finalizing three remote-monitoring policies for 2027. Remote therapeutic monitoring may be furnished only to established patients. Practitioners who report remote physiologic monitoring or remote therapeutic monitoring must furnish a separately reportable initiating visit at the onset. CMS is also finalizing updates to how the services are valued. The fact sheet does not publish the new values, so this article does not state them.

CMS had also proposed to pay for these services only when clinical staff employed by the practice perform them, and not when contractors do. After comments, CMS is delaying that requirement for two years, to January 1, 2029. The AHA reports the same delay and the same employed-staff-versus-contractor distinction. Practices that use a remote-monitoring vendor do not have a January 2027 payment ban to configure. They do have a 2029 date to put in the contract review, and they do have 2027 edits for the initiating visit and for established-patient therapeutic monitoring.

CMS asked for comment on bundling the remote-monitoring CPT codes and creating four new G-codes. It says it may consider those comments in future rulemaking. That is not a 2027 code change.

Practice expense, labs, and a 340B Part D file

CMS is phasing out the indirect practice cost index over two years and replacing it with a practice-expense stabilizer. It will allocate indirect practice expense using both the work RVU and the clinical-labor practice-expense RVU, except for 10- and 90-day global codes. Fee-schedule vendors that still anchor specialty practice expense to the old per-hour index will drift from Medicare as the phase-out proceeds. CMS also says it will consider comments on the facility versus non-facility site differential, including for hospital-employed physicians, in future rulemaking. That differential is not rewritten in this fact sheet.

On the Clinical Laboratory Fee Schedule, CMS is finalizing conforming changes from the Consolidated Appropriations Act, 2026. Beginning in 2027, payment reductions from private-payor-rate data are limited to 15% per year through 2029.

For 340B, the physician rule is a data obligation, separate from the outpatient drug payment cut below. Covered entities must submit specified data elements for units of a covered Part D drug billed to Part D and dispensed by the entity or its contractor, including contract pharmacies, when the manufacturer provides a 340B discount. The requirement begins with dates of service on or after January 1, 2027. CMS is delaying the first mandatory quarterly submission, for January 1 through March 31, 2027, to September 30, 2027.

The outpatient update is 2.3%. The claim is more than that.

CMS’s OPPS/ASC fact sheet, also dated November 4 and labeled CMS-1850-F, finalizes a 2.3% update for hospitals that meet quality-reporting requirements. The math is a projected hospital market-basket increase of 3.2%, reduced by a 0.9 percentage point productivity adjustment. ASCs that meet quality reporting get the same 2.3% update factor. CMS describes the ASC figure as the IPPS market basket of 3.2% minus the same 0.9 percentage point productivity adjustment. CMS says the rules affect about 3,500 hospitals and about 6,400 ASCs.

Hospitals that do not meet Hospital Outpatient Quality Reporting requirements receive a two-percentage-point reduction in the annual payment update. The 2.3% figure is the reporter rate. This article does not subtract the penalty from 2.3% and present the result as a CMS rate.

The AHA describes the hospital change as a net 2.3% increase compared with 2026 and quotes Ashley Thompson, AHA senior vice president of public policy analysis and development, saying the outpatient rate does not adequately account for hospitals’ financial challenges. That is the association’s position.

The AHA describes the site-neutral imaging rate as 40% of the outpatient PPS rate and the spending effect as a $260 million cut in outpatient PPS spending. CMS’s own description is a physician-fee-schedule-equivalent rate and the Part B expenditure breakdown above. The CMS fact sheet does not state 40%. Use the CMS composition for the dollar estimate, and treat 40% as the AHA’s description of that rate.

The AHA also reports three operational details that are not in the CMS fact sheet sections cited above. It says CMS will increase payments for non-drug items and services by 7.5% to keep the 340B drug cut budget neutral, while the CMS fact sheet says non-drug payments increase by an equivalent dollar amount and does not state 7.5%. It says rural sole community hospitals, PPS-exempt cancer hospitals, and children’s hospitals are exempt from the ASP-minus-28% rate, and that non-340B hospitals continue to be paid ASP plus 6% for separately payable drugs. And it says that by January 1, 2028, each off-campus outpatient department must have its own national provider identifier and an attestation of compliance with the provider-based rules in order to bill under the outpatient PPS as an off-campus provider-based department. Treat those as AHA-reported until the regulatory text is loaded into the billing system. The separate-NPI requirement, if the rule text matches the AHA account, is an enrollment project, not a January 2027 fee-schedule load.

On botulinum toxin, CMS says it is finalizing prior authorization for eight additional injection codes in the hospital outpatient department. The AHA reports that the requirement begins July 1, 2027. The fact sheet states the codes. It does not, in the text reviewed here, state July 1.

Removing 637 services from the inpatient-only list means Medicare can pay those services in the hospital outpatient department when a physician determines the site is clinically appropriate. It does not, by itself, change a commercial contract, a Medicare Advantage medical-necessity policy, or an inpatient-only edit a non-Medicare payer still uses. Chargemaster and order-entry teams should add the codes. Patient-status and payer-contract teams should not assume every removed code is now an outpatient case.

CMS is also finalizing the name Software as a Medical Service, assigning those services to New Technology APCs as an interim step, and paying a small number of algorithmic analyses performed on laboratory tests under the OPPS instead of the Clinical Laboratory Fee Schedule. RevCycleAI covered the proposed version of that category in July. The November fact sheet confirms the direction. It does not, in the summary reviewed here, republish the proposed code-level lists, so those earlier code counts should not be treated as the final inventory.

The AHA reports that CMS also finalized Medicare Shared Savings Program changes to financial methodology, the quality performance standard, and beneficiary policies, and that it delayed the end of MIPS from a proposed 2029 to 2031. The physician fee schedule fact sheet’s billing-ready ACO change is modifier B2. This article does not restate shared-savings percentages that are not in that fact sheet.

The January 1 worklist

1. Load both physician conversion factors before contract modeling and allowable comparisons. Qualifying-participant status is a rate input, not a footnote.
2. Rewrite same-day E/M edits to the final policy: 0-day globals, 100% on the higher-priced service, 80% on the other. Retire proposed edits that use 50% or that apply the cut to 10- and 90-day globals.
3. Replace G2211 flat-rate logic with modifier B1 at 16%. Add B2 at 32% only when the rendering practitioner is in a Shared Savings Program ACO or is a LEAD participant provider, and route B2 claims into the ACO expenditure record.
4. Configure 2027 remote-monitoring edits for an initiating visit and for established-patient therapeutic monitoring. Put the employed-staff-versus-contractor payment limit on a January 1, 2029 workplan. Do not build it as a 2027 denial edit.
5. Model hospital outpatient cash in layers: the 2.3% update for quality reporters, the two-percentage-point OQR penalty where it applies, the move from a 0.5% to a 2% non-drug remedy offset for hospitals enrolled on or before January 1, 2018, ASP minus 28% on separately payable 340B drugs, and physician-fee-schedule-equivalent payment for non-contrast imaging in excepted off-campus departments. A one-line 2.3% inflator misses the layers that move the claim.
6. Open the 340B Part D repository file for dates of service on or after January 1, 2027. The first mandatory quarter is due September 30, 2027.
7. Update the chargemaster for the 637 codes leaving the inpatient-only list, and keep commercial and Medicare Advantage site-of-service rules on their own edit tables.
8. Add eight botulinum toxin codes to the hospital outpatient prior-authorization workqueue. Confirm the effective date in the rule text. The AHA reports July 1, 2027.

CMS estimates the individual beneficiary who receives a qualifying 340B drug in the hospital outpatient department will save an average of $900 in drug costs in 2027. That is a CMS estimate of beneficiary cost, not a collections forecast for the hospital. The same policy reduces Medicare drug payment by an estimated $4.35 billion and shifts an equivalent amount onto non-drug outpatient services. Hospitals that are not 340B covered entities can see a different cash result from hospitals that are.

RevCycleAI view

The operational fact is the effective date. Physician groups need two conversion factors, a narrower same-day edit than the one CMS proposed, and a modifier that pays more inside an ACO and also counts in that ACO’s benchmark. Hospitals need to stop briefing the outpatient rule as a 2.3% raise. Site-neutral imaging, the 340B drug rate, and a faster clawback of the earlier 340B remedy all hit the same claim file.

None of those items requires a guessed revenue number. They require the fee schedule, the claim editor, the 340B accumulator, and the off-campus department setup to match the rule Medicare will pay on January 1.

Sources: CMS, CY 2027 Medicare Physician Fee Schedule final rule fact sheet (Nov. 4, 2026); CMS, CY 2027 OPPS/ASC final rule fact sheet, CMS-1850-F (Nov. 4, 2026); CMS PFS federal regulation notices (CMS-1848-F display date Nov. 4, 2026; publication date Nov. 9, 2026); AHA, physician fee schedule final rule (Nov. 4, 2026); AHA, outpatient rates, site-neutral payment, and 340B (Nov. 4, 2026); AAFP statement (Nov. 4, 2026); ACR, conversion-factor decreases (Nov. 4, 2026); ACR initial summary of the CY 2027 PFS final rule (unrounded conversion-factor pairs). AAFP and AHA characterizations are attributed to those organizations. Items the CMS fact sheets do not state — including the AHA’s 7.5% non-drug increase, 340B exemptions, separate off-campus NPI date, July 1 botulinum date, and MIPS sunset date — are labeled as AHA-reported. No practice-level revenue impact is estimated.