CMS is expected to release its final calendar year 2027 Medicare Physician Fee Schedule in early November, setting physician pay for Jan. 1, 2027, barring congressional intervention.
The proposed rule, issued July 14, would cut the conversion factor 1.68% for most physicians, slash total joint replacement payment by about 20% and pay half for some same-day visits. It drew 43,040 public comments before the Sept. 14 deadline.
The final rule lands alongside the final 2027 outpatient and ASC payment rule and less than two months before the mandatory Ambulatory Specialty Model starts. Proposed cuts may be finalized, softened or reversed.
Here are the key provisions to watch, and what physician and ASC leaders have told Becker’s since the proposal was released.
Physician pay
Two conversion factors. CMS proposed $32.84 for physicians who are not qualifying APM participants, down 1.68% from $33.40. Qualifying APM participants would get $33.17, down 1.19% from $33.57.
Why the cut. The decrease mainly reflects the expiration of a one-year 2.5% conversion factor increase Congress attached to 2026 payments. Without it, statutory updates would add 0.75% for qualifying alternative payment model participants and 0.25% for others, plus an estimated 0.53% from proposed work relative value unit changes.
Same-day visits at 50%. When an office or outpatient evaluation and management visit is billed the same day as a 0-, 10- or 90-day global procedure, the higher-cost service would be paid in full and the other at 50%.
G2211 becomes a modifier. The add-on would become a modifier raising payment for the associated E/M code by 16%, or 32% for practitioners in Shared Savings Program or LEAD Model ACOs.
Practice expense overhaul. CMS proposed a multiyear shift away from American Medical Association survey data toward “more objective, routinely updated cost data.” The American Association of Neurological Surgeons and Congress of Neurological Surgeons said CMS’ own files show practice expense cuts above 30% for several high-volume neurosurgical services.
Specialty hits. Orthopedic surgery payments could fall about 7% beyond the headline cut. Hand surgery is projected to decline about 5%, and neurosurgery and interventional pain management about 2% each.
Total joint replacement. CMS proposed cutting surgeon payment for total hip and knee replacement (CPT 27130 and 27447) by about 20%, on top of an 8% cut that took effect in 2026. The American Association of Hip and Knee Surgeons put the two-year cut at 27.5%.
Long-run erosion. Inflation-adjusted Medicare physician payment fell 33% from 2001 to 2025, according to AMA data.
ASCs and outpatient care
The fee schedule does not set facility rates, but ASC leaders are watching it closely because physician pay shapes where cases go.
“Changes to physician payment can influence practice patterns and, in turn, ASCs,” Alex Taira, associate director of public and regulatory affairs at the Ambulatory Surgery Center Association, told Becker’s.
ASCA said its comments would address indirect practice expense adjustments for facility versus non-facility settings, the Ambulatory Specialty Model and global surgery payments.
The companion 2027 outpatient and ASC proposed rule, released July 2, would:
- Raise ASC and hospital outpatient department payment rates 2.4% on average, with an ASC conversion factor of $57.766 for quality-compliant facilities
- Add 618 procedures to the ASC covered procedures list
- Remove 637 procedures from the inpatient-only list as part of a three-year phaseout
- Pay off-campus HOPDs physician fee schedule-equivalent rates for imaging without contrast, cutting Part B spending an estimated $260 million in the first year
- Cut four high-volume ASC pain procedures, including lumbar epidural steroid injections and lumbar facet radiofrequency ablation
ASC leaders say the facility bump falls short. All 10 of the highest-volume ASC procedures are projected to receive lower reimbursement despite the update,
Julie Jackson, NP, chief administrative officer of GI Associates in Milwaukee, told Becker’s. Physicians also see a mismatch between the two rules: facility rates rise while surgeon fees for the same cases fall.
Ambulatory Specialty Model
The mandatory model starts Jan. 1, 2027, and the final fee schedule is CMS’ last chance to change its rules before launch. CMS finalized the model in the 2026 fee schedule; the 2027 proposal includes tweaks.
The basics. The heart failure track covers cardiology. The low back pain track covers anesthesiology, pain management, interventional pain management, neurosurgery, orthopedic surgery and physical medicine and rehabilitation. The model covers 235 core-based statistical areas and metropolitan divisions, with no opt-out or hardship exemption.
Who is in. The final participant list, released Sept. 15, includes 3,319 low back pain clinicians and 2,215 heart failure clinicians, more than 5,500 specialists in all.
Money at stake. Adjustments are two-sided and apply to all of a clinician’s Part B payments, rising from a maximum of 9% in 2029 to 12% in 2033. Positive adjustments are capped at 85% of total reductions.
Proposed 2027 changes:
- Five bonus points for eligible rural participants
- A new measure on potentially unnecessary lumbar MRIs
- Confirmation that participants cannot voluntarily withdraw
- A cardiology subspecialty redesignation exception, with none for the low back pain track
- Individual-level scoring for the heart failure admission rate measure
- One collaborative care agreement per taxpayer identification number, one shared beneficiary instead of several, and in-kind “remuneration” such as staff or equipment allowed under those agreements
Calls for delay. On Oct. 28, the American Hospital Association, AMA, AMGA, Medical Group Management Association, National Association of ACOs, Health Care Transformation Task Force and Premier asked CMS to delay the model, citing late participant lists and portal access problems. The American Academy of Orthopaedic Surgeons and the American Society of Anesthesiologists each sought at least a one-year delay. The 2027 proposal drew 113 comments on the model from spine and orthopedic commenters alone. Of the comments Becker’s reviewed, 113 raised the model.
CJR-X and the joint replacement squeeze
CJR-X is not part of the fee schedule, but it frames the joint replacement fight. CMS finalized the mandatory, nationwide bundle July 31 in the FY 2027 IPPS rule, with a Jan. 1, 2028, start.
- More than 2,000 acute care hospitals are accountable for 90-day hip, knee and ankle replacement episodes.
- Outpatient total hip and knee replacements (CPT 27130 and 27447) trigger episodes alongside inpatient stays.
- CMS intends to price low-acuity episodes the same in an HOPD or ASC.
- ASCs are not formal participants, but hospitals may share reconciliation payments with surgeons and ASCs under an Anti-Kickback Statute safe harbor.
- CMS projects $736 million in Medicare savings over five years.
The proposed 20% surgeon fee cut for the same codes lands as hospitals gain bundle upside and a 2.3% IPPS increase.
“The hard part is they’re cutting just the surgeon fee, but the hospital is getting the benefit for the bundle payments,” Antonia Chen, MD, president of the American Association of Hip and Knee Surgeons and chair of orthopedic surgery at UT Southwestern Medical Center in Dallas, told Becker’s.
Other provisions to watch
MIPS phase-out. Traditional MIPS reporting would sunset with the 2029 performance period, moving clinicians to specialty-focused MIPS Value Pathways. CMS proposed three new MVPs that it says would give about 98% of specialties a relevant option.
MIPS Core Measures. Starting in 2027, every clinician would report at least one measure considered fundamental to their specialty.
Advanced APM incentive. CMS proposed tying qualifying-participant incentive payments and the higher conversion factor to services billed through a clinician’s APM-participating tax ID, which it estimates would cut Advanced APM incentive payments by about $2.38 billion over a decade.
New knee surgery code. The American Orthopaedic Society for Sports Medicine said new CPT 27X05 should carry 17 work RVUs, versus CMS’ proposed crosswalk of 13.16.
What leaders told Becker’s
Ed Tolentino, administrator of Outpatient Surgery Center of Central Florida (Wildwood, Fla.): “Reimbursement compression has become a structural reality in healthcare, not an isolated event. While we anticipated continued pressure on physician payments and have planned accordingly, further reductions increase the importance of operational efficiency, physician alignment and disciplined growth. From our perspective, these changes reinforce, not change, our long-term strategy.”
Alex Taira, associate director of public and regulatory affairs at ASCA: “While the conversion factor may decrease, the impact on reimbursement will vary by procedure code. … Congress has intervened to increase physician payments several times in recent years, but the conversion factor has declined in five of the past six years, so this is not an aberration.”
Alexander Lazarides, MD, orthopedic oncologist at Moffitt Cancer Center (Tampa, Fla.): “The recurring cycle of annual physician payment cuts is no longer simply a reimbursement issue. It is a patient access issue. … When reimbursement steadily declines while the cost and complexity of care continue to rise, the greatest risk is not to physicians. It is to patients who depend on access to highly specialized treatment that cannot be easily replaced.”
Christopher Baker, MD, orthopedic surgeon at Florida Orthopedic Institute (Tampa): “Unfortunately, this is just another cut to physician reimbursement for becoming more productive, efficient and effective at safely and successfully performing outpatient total joint arthroplasty.” Dr. Baker said he is increasingly hearing from surgeons who plan to reduce Medicare patient volumes. “Reduced access to services is clearly the last thing surgeons want.”
Antonia Chen, MD, president of the American Association of Hip and Knee Surgeons and chair of orthopedic surgery at UT Southwestern Medical Center (Dallas): “My biggest concern about the proposed CMS cuts to hip and knee replacements is that more and more surgeons will have to take fewer Medicare patients or stop taking Medicare patients at all.” She said access would drop significantly and wait times would grow if the cuts are finalized. “The wait times could rival those of other countries such as the United Kingdom and Canada.”
Joseph Zuckerman, MD, chair of orthopedic surgery at NYU Langone Health (New York City): “Since we are an RVU-based compensation system the impact would be significant. Options for us include changes to operative cases as a measure of productivity.”
Mike Boblitz, CEO of Athens (Ga.) Orthopedic Clinic, who met with CMS Administrator Mehmet Oz, MD, Sept. 14, wrote: “Funding a 2.4% increase to HOPDs in 2027 by cutting physician reimbursement under Medicare Part B is not good, and only accentuates the increased shortage of physicians that cannot sustain further cuts.” Among his proposed fixes: “Extend the 2.5% temporary adjustment installed in 2026 through 2027 to allow more time to plan a viable solution,” and “Reallocate the Medicare Part B budget from higher cost hospital outpatient services to fund increases to physicians.”
Adam Bruggeman, MD, CEO and surgeon at Texas Spine Care Center (San Antonio), on ASC payment: “CMS proposes to reduce the scalar related to 340B changes in the hospital fee schedule, which has the effect of lowering payment for 85 out of the top 100 highest-volume ASC procedures. … This continues to undercut CMS’ own goal of moving care to lower-cost settings while simultaneously adding 618 procedures to the ASC list. We need to get rid of the scalar once and for all as so many of the societies have requested over the years.”
Dan Tasset, founder, CEO and executive chairman of NueHealth (Leawood, Kan.), on the specialty model: “That model is really showing directionally where CMS is going to go, which is getting the providers to stand behind their product. It’s not just managing the episodic bundle, but in this case, it’s managing the medical condition, lower back pain. And CMS is not going to stop with lower back pain.”
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