2027 Medicare Physician Fee Schedule: 2.31% Pay Cut, B1 and B2 Modifiers, and the 80% Same-Day Rule
CMS finalized the 2027 Medicare physician fee schedule on November 4, 2026. Pay falls 2.31% on January 1, 2027, same-day visits pay 80% on the lower service, and G2211 becomes modifiers B1 and B2.
2027 Medicare Physician Fee Schedule: 2.31% Pay Cut, B1 and B2 Modifiers, and the 80% Same-Day Rule
The 2027 Medicare physician fee schedule cuts your Medicare pay on January 1, 2027. CMS finalized the rule on November 4, 2026, and the numbers are now locked. The conversion factor drops 2.31% for most clinicians, from $33.40 to $32.63. A separately identifiable office visit billed on the same day as a minor procedure pays 80% on the lower-cost service. And add-on code G2211 ends on December 31, 2026. It becomes modifier B1, which adds 16% to the visit, and modifier B2, which adds 32% for clinicians in a Medicare ACO.
Your 2027 Medicare revenue comes down to three moves. Reprice your 2027 budget at $32.63. Fix same-day visit coding before the first January claim. Claim B1 or B2 on every visit that qualifies. The practices that do all three in November and December keep most of the cut from landing on their bottom line. The ones that wait until January will find the money already gone, one claim at a time.
Table of contents
- What CMS finalized on November 4, 2026
- The 2.31% conversion factor cut, in dollars
- Same-day visits now pay 80% on the lower service
- G2211 is gone: B1 adds 16%, B2 adds 32%
- What else changed on January 1, 2027
- Your 30-day checklist before January 1
- What this means for your revenue
- Frequently asked questions
Key takeaways
- Medicare pays most clinicians 2.31% less per service from January 1, 2027. The conversion factor falls to $32.63 from $33.40, per the CMS fact sheet published November 4, 2026.
- A same-day office visit and 0-day procedure pay 100% on the higher service and 80% on the other. CMS first proposed 50%, then softened it to 80% after public comments.
- G2211 ends December 31, 2026. Modifier B1 adds 16% to an office visit. Modifier B2 adds 32% for clinicians in a Medicare Shared Savings Program ACO or LEAD Model ACO.
- Telehealth flexibilities run through December 31, 2027. Traditional MIPS reporting ends with the 2031 performance period.
What CMS finalized on November 4, 2026
CMS released the calendar year 2027 Medicare Physician Fee Schedule final rule on November 4, 2026. The rule sets how Medicare pays physicians and other clinicians for Part B services in 2027, per the CMS fact sheet. Most provisions take effect January 1, 2027.
CMS received more than 44,000 public comments on the July proposal, per a November 5, 2026 summary from Healthcare Marketing by Velocity. The final rule changed three proposals after those comments. It softened the same-day cut from 50% to 80%. It narrowed the same-day rule to 0-day global procedures only. And it gave clinicians until 2030 to move off traditional MIPS reporting, two years longer than CMS first proposed.
The Medical Group Management Association told CMS in its September comment letter that it was "deeply concerned about the impact of the estimated reductions to the conversion factors," per Physicians Practice on November 4, 2026. That concern is now a budget line. Your revenue cycle management process has 8 weeks from November 4 to absorb these changes before the first 2027 claim goes out.
If you followed the July proposal, read the final rule fresh. Two numbers moved against you since July, and one moved in your favor. The conversion factor cut deepened from 1.68% proposed to 2.31% final for most clinicians. The same-day cut softened from 50% to 80%. The July proposal post on this site, CY 2027 Medicare physician fee schedule proposed rule, still shows the old numbers. Use the final numbers below.
“MGMA told CMS it was "deeply concerned about the impact of the estimated reductions to the conversion factors."”
The 2.31% conversion factor cut, in dollars
The conversion factor is the number Medicare multiplies by each service's relative value units to set payment. When it falls 2.31%, every Part B service you bill pays 2.31% less, unless a code change offsets it.
Clinician group | 2026 factor | 2027 factor | Change |
|---|---|---|---|
Most clinicians (non-QP) | $33.40 | $32.63 | Down $0.77, 2.31% |
Qualifying APM participants (QP) | $33.57 | $32.95 | Down $0.62, 1.83% |
Most of the drop comes from the end of a one-year 2.5% increase Congress gave for 2026, per CMS. That increase expires. Statutory updates of 0.25% for non-QPs and 0.75% for QPs offset part of the drop. The work relative value unit adjustment moved from +0.53% in the proposal to -0.12% in the final rule, per Physicians Practice. That swing is why the final cut runs deeper than the 1.68% CMS proposed in July.
Here is the math on a round number. Take a practice with $100,000 in Medicare Physician Fee Schedule allowed charges in 2026. Same codes, same volume, non-QP, no B1 or B2 uplift. Multiply $100,000 by 0.0231. The cut is $2,310. The same work pays $97,690 in 2027.
That $2,310 is the hole to fill before January. B1 and B2 are the main tools to fill it, and the next sections show how. Your medical billing services budget for 2027 should start at $32.63, and your pricing for Medicare work should reflect the new factor from day 1.
Same-day visits now pay 80% on the lower service
This is the rule that hits procedure-heavy practices hardest. When a separately identifiable office or outpatient visit billed with modifier -25 falls on the same day as a procedure with a 0-day global period, Medicare pays the higher-priced service in full and the other at 80%. The cut applies when the same physician, or a physician of the same specialty in the same group practice, furnishes both services, per Physicians Practice.
CMS first proposed 50% on the second service, and it wanted the rule to reach 10-day and 90-day global procedures too. Public comments pushed back. CMS scaled back all three parts. The final rule pays the second service at 80%, covers 0-day global procedures only, and applies to the same physician or same-specialty physicians in one group.
CMS estimates dermatology, otolaryngology, and podiatry will see the largest effects from the final policy, per Physicians Practice. If your practice does same-day visits and minor procedures, run your numbers this week. Our dermatology billing and podiatry billing pages cover the coding for those specialties. The global surgery and same-day E/M in 2027 post on this site walks through the same-day rules in more depth.
Same-day situation | Medicare pays |
|---|---|
E/M with modifier -25 plus 0-day procedure, same physician | Higher service 100%, other 80% |
Same services, different specialties in one group | Both in full, no cut |
E/M plus 10-day or 90-day global procedure | Both in full, no cut under the final rule |
E/M without modifier -25 | No separate payment, the visit stays bundled |
Work the math on a same-day pair. A visit priced at $150 and a procedure priced at $200, same physician, same day. Medicare pays the $200 procedure in full and 80% of the $150 visit, which is $120. The pair pays $320. That is $30 less than the $350 the pair paid before. One pair a day, 5 days a week, 50 weeks a year is $7,500 a year on round numbers. These are round illustration numbers, not fee schedule quotes. Your own numbers will differ, and the point is the shape of the loss.
The note carries the claim. Modifier -25 without a separate note gets denied. Write the visit as its own service in the note, with its own history, exam, and decision making. Use this exact shape: "Separate E/M today for [problem]: history, exam, and medical decision making distinct from the [procedure]. Modifier -25 appended." Fill in the problem and the procedure. Leave out any line that calls the visit routine. A routine visit on the same day as a procedure reads as bundled work to a payer reviewer.
G2211 is gone: B1 adds 16%, B2 adds 32%
CMS finalized G2211 as an add-on code in the 2021 fee schedule rule, and paid it from 2025. On January 1, 2027, the code ends. The extra pay for a complex visit now comes through two modifiers added to the E/M base code itself.
Modifier | Who can use it | Uplift on the visit |
|---|---|---|
B1 | Any clinician billing an E/M visit | 16% |
B2 | Clinicians in a Medicare Shared Savings Program ACO or LEAD Model ACO | 32% |
B1 appends to the E/M base code and raises its payment by 16%, instead of a flat amount, per the CMS fact sheet. The percentage stays equal across all E/M levels, which the flat G2211 amount did not do. B2 is voluntary. It applies to every Medicare patient those clinicians see, whether or not they are ACO-assigned. Claims billed with B2 count toward beneficiary assignment, historical benchmark spending, and performance year spending for the Shared Savings Program and the LEAD Model, per CMS.
On a $100 visit, B1 adds $16 and B2 adds $32, per Medical Economics on November 5, 2026. That is the whole story in one line. A practice that bills B1 on 200 qualifying visits a month at $100 a visit adds $3,200 a month. A practice that never appends B1 leaves that money behind every single month.
Your billing team needs a rule for B1 on January 1. Ask one question per visit: did this visit carry ongoing care for a patient with chronic conditions, or care that spanned multiple problems? If yes, append B1. If your practice sits in an ACO, ask the same question and append B2 instead. Do not bill B2 unless your practice participates in a Shared Savings Program ACO or the LEAD Model. B2 outside an ACO gets denied.
Our G2211 in 2027 post tracked the proposal from July, and the final rule kept the modifier plan intact. Read it next to this post for the full timeline.
What else changed on January 1, 2027
Four more changes land on January 1, and one lands on April 1. Each one touches a different part of your billing.
Telehealth flexibilities run through December 31, 2027. Congress extended them in the Consolidated Appropriations Act, 2026, per Physicians Practice. Book telehealth visits into 2027 with the same rules you used in 2026.
Remote monitoring tightens. Remote therapeutic monitoring now goes to established patients only. Practices billing remote physiologic monitoring or remote therapeutic monitoring must furnish a separately reportable initiating visit when the services begin. CMS delayed the staffing rule to January 1, 2029. Until then, contractors can still perform the work. Our 2027 RPM and RTM post covers the contractor question in full.
Advance care planning gets two new codes. G0572 and G0573 describe advance care planning furnished by clinical staff under the direct supervision of the billing physician or practitioner. Codes 99497 and 99498 now cover only time the billing practitioner personally spends, per Physicians Practice.
Traditional MIPS reporting ends with the 2031 performance period. Clinicians have through 2030 to move to MIPS Value Pathways, which CMS said already cover about 98% of clinicians, or to advanced APMs. Starting in 2027, clinicians must report at least one specialty-specific core measure.
Starting April 1, 2027, approved ACOs can reduce or eliminate Part B cost sharing for many items and services for assigned beneficiaries. Durable medical equipment, prosthetics, orthotics and supplies, and prescription drugs are excluded, per Physicians Practice. CMS will collect first applications in early 2027.
Your 30-day checklist before January 1
What this means for your revenue
Put the three pieces together on one practice. Same round numbers as before. $100,000 in 2026 Medicare allowed charges, non-QP, same codes, same volume. The 2.31% cut takes $2,310. That is the starting point.
Now add B1. Say $40,000 of that $100,000 is E/M visit dollars, and B1 applies to all of it. B1 adds 16% of $40,000, which is $6,400. The practice ends 2027 at $104,090 on the same volume: $100,000 minus $2,310 plus $6,400. The cut turns into a $4,090 gain, because the B1 uplift lands on visit dollars that were already in the practice.
That math only works if your team appends B1. It also assumes every E/M dollar qualifies, which will not hold for every practice. Run it with your own E/M share. If 20% of your Medicare dollars are E/M visits, B1 on all of them adds $3,200 on $100,000 of allowed charges, and the practice still ends $890 ahead after the cut. If 10% are E/M visits, B1 adds $1,600, and the practice ends $710 behind. The break-even point sits at 14.4% E/M share: $100,000 times 0.144 times 0.16 equals $2,304, just short of the $2,310 cut.
That 14.4% is the number to carry into your 2027 budget meeting. Pull your E/M share from your own billing data. If it clears 14.4%, B1 covers the cut on its own. If it falls short, the same-day 80% rule and any other 2027 changes still need a fix, or the practice pays the difference out of its own margin.
Run your numbers through the revenue integrity tool to see where your 2026 Medicare revenue leaks. January 1 is 8 weeks away. Get a free audit of your Medicare claims before the rule takes effect, and walk into 2027 with B1 on your charge sheet and the same-day rule priced into your budget.
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Get my free auditFrequently asked questions
Most provisions take effect January 1, 2027. The ACO cost sharing option starts April 1, 2027, and the remote monitoring staffing rule is delayed to January 1, 2029.
For most clinicians it fell 2.31%, from $33.40 to $32.63. For qualifying APM participants it fell 1.83%, from $33.57 to $32.95, per the CMS fact sheet published November 4, 2026.
Modifier B1 replaces G2211 and adds 16% to an office visit. Modifier B2 adds 32% and is only for clinicians in a Medicare Shared Savings Program ACO or LEAD Model ACO.
When a separately identifiable office visit with modifier -25 falls on the same day as a 0-day global procedure, Medicare pays the higher-priced service in full and the other at 80%. Different specialties in one group are not subject to the cut.
Telehealth flexibilities run through December 31, 2027, under the Consolidated Appropriations Act, 2026. Book telehealth visits into 2027 under the same rules you used in 2026.
Sources
- Centers for Medicare and Medicaid Services, Calendar Year 2027 Medicare Physician Fee Schedule Final Rule fact sheet, November 4, 2026: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-final-rule
- Physicians Practice, Medicare's final 2027 fee schedule cuts pay and changes same-day and G2211 billing for practices, November 4, 2026: https://www.physicianspractice.com/view/medicare-s-final-2027-fee-schedule-cuts-pay-and-changes-same-day-and-g2211-billing-for-practices
- Medical Economics, Goodbye G2211, hello B1 and B2: what the 2027 Medicare Physician Fee Schedule means for primary care, November 5, 2026: https://www.medicaleconomics.com/view/goodbye-g2211-hello-b1-and-b2-what-the-2027-medicare-physician-fee-schedule-means-for-primary-care
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