2027 Medicare Fee Schedule for Small Practices, Explained

Medicare published its 2027 physician fee schedule on November 4, 2026, and the final version appeared in the Federal Register on November 9. It takes effect on January 1, 2027. If you own or run a small office, you don’t need all 1,000-plus pages. You need to know what changes on your claims, what it means for your revenue, and what to set up before the first January visit.

This guide covers the changes that matter to a 1 to 5 provider office, in plain English, with a table you can hand to whoever does your billing. Every figure comes from the final rule or the CMS fact sheets, linked at the end.

The short version

What changes on January 1, 2027	What it means for a small office	What to do before January
Conversion factor cut. $32.6286 for most clinicians, down 2.31% from $33.4009. Clinicians who are qualifying APM participants get $32.9548, down 1.83%.	Most Medicare fee-schedule payments go down a little more than 2%, before any code-level changes.	Update the fee schedule in your billing system and re-run your Medicare revenue forecast for 2027.
20% cut on same-day visit plus minor procedure. When an office visit (99202-99205, 99211-99215) and a 0-day global procedure are billed the same day by the same clinician, every service except the highest-valued one is paid 20% less.	Offices that do quick in-visit procedures (skin, joint injections, nail work, wound care) will feel this most.	Pull your 2026 claims that used modifier 25 with a 0-day procedure and see how often it happens.
G2211 becomes modifier B1. The add-on for ongoing care relationships is now a modifier worth 16% of the visit’s total RVUs, at every visit level.	The payment idea stays; the way you bill it changes.	Make sure your billing system and your clearinghouse are ready for B1, and retrain whoever codes visits.
New telehealth modifiers BB and BC. Required from January 1, with no effect on payment.	Telehealth claims without them may be returned.	Add both to your telehealth claim checklist.
Remote monitoring needs an initiating visit. RPM and RTM now need a separately billable visit to start, and RTM is limited to established patients.	Patients can’t be enrolled in monitoring without a visit first.	Check your enrollment workflow if you bill remote monitoring.
MIPS: threshold stays at 75 points; traditional MIPS ends after 2030, MIPS Value Pathways (MVPs) after that.	No new hurdle for 2027, and small practices keep their exemptions.	Decide this year whether an MVP fits your specialty, so 2031 is not a surprise.

1. The conversion factor: why payments go down about 2.3%

Every service on the fee schedule has a value in relative value units (RVUs). Medicare multiplies those RVUs by the conversion factor to get the dollar amount. When the conversion factor goes down, almost everything goes down with it.

For 2027 there are two conversion factors:

Most clinicians: $32.6286, a 2.31% drop from $33.4009.
Qualifying APM participants (clinicians who meet the thresholds in an advanced alternative payment model, which most small independent offices are not): $32.9548, a 1.83% drop from $33.5675.

The main reason is that the one-year 2.5% increase Congress gave for 2026 has expired. CMS started from the 2026 figure without that increase, applied a small budget-neutrality adjustment (-0.12%), and then added the small statutory update (+0.25%, or +0.75% for qualifying APM participants). The final cut is deeper than the July proposal, which had projected $32.84 (-1.68%).

As plain arithmetic, a 2.31% lower conversion factor is about $23 less for every $1,000 of Medicare fee-schedule payments. Your real number will differ, because RVUs for individual codes also change (see the next section), and Medicare is only part of most offices’ payer mix.

One thing could still change: the AMA is asking Congress to extend the 2.5% increase through 2027 in the lame-duck session. As of November 13, that has not happened. If it does, the conversion factor will be revised, so check again in December before you lock your budget.

Photo: Mikhail Nilov / Pexels

2. What happens to individual codes

Two technical changes move the value of individual codes up or down:

No new “efficiency adjustment.” The 2.5% cut to work RVUs that CMS applied in 2026 stays in place, but there is no second cut in 2027. CMS plans to look again every three years, so the next one is due in the 2029 rule. Time-based codes, which include office visits, were exempt from it anyway.
Practice-expense changes. CMS is removing one step of its practice-expense formula over two years (half in 2027, the rest in 2028) and is capping how much any code’s practice-expense value can move in one year at 5%. In practice this keeps big swings out of 2027, but some codes will still move a few percent in either direction.

The way to see your own effect is to price your top 20 codes by volume at the new rates when your Medicare Administrative Contractor publishes its 2027 fee schedule, and compare them with 2026.

3. The 20% same-day cut (modifier 25)

This is the change most small-practice groups objected to. Here is exactly what was finalized:

It applies when an office or outpatient visit (99202-99205, 99211-99215) is billed on the same day as a procedure with a 0-day global period.
It applies when both are done by the same clinician, or by a clinician of the same specialty in the same group.
The highest-valued service is paid in full; every other service that day is paid 20% less.
CMS had proposed a 50% cut and had also proposed including 10-day and 90-day global procedures. Both were dropped: the final rule is 20%, and only 0-day globals.

Who notices it: family medicine and internal medicine offices that do injections, skin procedures or minor wound care during a visit, and specialty offices such as podiatry and dermatology. Before January, count how many of your 2026 visits carried modifier 25 alongside a 0-day procedure. That count, times the value of the lower-paid service, times 20%, is a fair estimate of what this costs you.

The rule does not change whether you should do the procedure at the same visit. That is a clinical decision, and the documentation rules for modifier 25 (a significant, separately identifiable visit) have not changed.

4. G2211 becomes modifier B1

G2211 was the add-on code for visits that are part of an ongoing relationship with the patient. From 2027 it is replaced by a modifier:

Modifier B1 pays an extra 16% of the visit’s total RVUs, at every level of office visit.
Modifier B2 pays 32% and is only for clinicians in Medicare ACOs.
The rule that G2211 can’t be paid on a visit billed with modifier 25 continues, with the same exceptions as before (annual wellness visit, vaccine administration and Part B preventive services).

Because the add-on is now a percentage, it is worth more on a higher-level visit than it was as a flat code. Ask your billing system vendor and your clearinghouse when they will support B1 and B2, and update your coding cheat sheet.

5. Telehealth: what the fee schedule changes, and what it doesn’t

The big telehealth flexibilities (seeing Medicare patients at home, no rural-only rule, audio-only visits) were extended by Congress, not by this rule, and they now run through December 31, 2027. The fee schedule adds a few practical items:

Two new modifiers, BB and BC, are required from January 1. BB is for telehealth delivered through a contracted or paid virtual platform; BC is for telehealth furnished incident-to. CMS says they don’t change payment, but claims still need them.
Teaching physicians can bill telehealth with residents when either one is in the room with the patient, for services on the telehealth list.
New codes added to the telehealth list include advance care planning by clinical staff (G0572, G0573) and shared medical appointments (G0686, G0687).

6. Remote monitoring and new codes

RPM and RTM: a separately billable initiating visit, in person or by telehealth, is now required, and RTM is limited to established patients. A planned rule limiting payment to the practice’s own employed staff is delayed to January 1, 2029.
Advance care planning by clinical staff under direct supervision: new codes G0572 and G0573. Direct supervision can be done by audio-video for these.
Shared medical appointments: G0686, plus G0687 for each extra 30 minutes, no more than one session per week per patient.
Behavioral health integration: the collaborative care codes and the behavioral health add-ons to advanced primary care management are revalued upward. If you already bill them, check the new rates.

7. MIPS in 2027: less change than expected

The performance threshold stays at 75 points through the 2028 performance year. The maximum penalty stays at -9%.
Traditional MIPS ends after the 2030 performance year, two years later than CMS proposed. From 2031, clinicians report through MIPS Value Pathways (MVPs). Three new MVPs were added (diabetic disease, hypertension and hospitalist), for 30 in total.
Small practices (15 or fewer clinicians) are exempt from the new “core measure” requirement.
Promoting Interoperability: the Security Risk Analysis measure is removed from 2027. That only changes MIPS scoring: the HIPAA Security Rule still requires a risk analysis, and every HIPAA settlement the Office for Civil Rights announced in the first half of 2026 included a risk-analysis finding. Electronic prior authorization is an optional 10-point bonus measure in 2027 and becomes required in 2028.

Small practices still get Promoting Interoperability reweighted to 0% automatically unless they choose to report it. Nothing in the 2027 documents changes that.

Your pre-January checklist

☐ Load the 2027 Medicare fee schedule from your MAC into your billing system once it is published.
☐ Re-price your top 20 codes and update your 2027 Medicare revenue forecast.
☐ Count 2026 visits with modifier 25 plus a 0-day procedure, and estimate the 20% effect.
☐ Switch G2211 to modifier B1 in your coding guide; confirm your clearinghouse accepts B1.
☐ Add modifiers BB and BC to every telehealth claim workflow.
☐ Check that remote-monitoring patients have an initiating visit on file.
☐ Pick your 2027 MIPS approach, and look at which MVP would fit you from 2031.
☐ Re-check the conversion factor in December, in case Congress acts.

If you want to see how your billing performs against common benchmarks before the cut lands, our medical billing benchmarks page is a good place to start. For how MedTec handles claims and billing inside the EHR, see medical billing with MedTec.

Frequently asked questions

How much is the 2027 Medicare conversion factor?

$32.6286 for most clinicians and $32.9548 for qualifying APM participants. That is 2.31% and 1.83% lower than 2026.

Is the modifier 25 cut 50% or 20%?

20%. CMS proposed 50% in July and finalized 20%, limited to office visits billed on the same day as a 0-day global procedure.

Can I still bill G2211 in 2027?

No. G2211 is replaced by modifier B1 (16% of the visit’s total RVUs), or B2 (32%) for Medicare ACO clinicians.

Do the telehealth flexibilities end on January 1, 2027?

No. Congress extended them through December 31, 2027. The fee schedule adds the BB and BC claim modifiers from January 1.

Could the cut still be reversed?

Only if Congress acts. The AMA has asked Congress to extend the 2.5% increase through 2027 and delay the modifier 25 cut. Check again in December.

Sources

This article is general information about the final rule as published on November 9, 2026, not billing, coding or legal advice. Payment amounts depend on your locality, specialty and payer mix; confirm codes and rates with your Medicare Administrative Contractor and your billing advisor.

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The 2027 Medicare Fee Schedule in Plain English for a Small Practice