Medicare Finalizes 2027 Doctor Pay Rule: Rates Fall About 2% as ACOs Gain Power to Waive Patient Cost-Sharing

Medicare’s main payment rate for doctors and other clinicians will fall about 2% next year under the final 2027 Physician Fee Schedule the Centers for Medicare & Medicaid Services (CMS) issued Wednesday, Nov. 4. The rule also lets approved accountable care organizations waive Part B cost-sharing for their patients, trims payment when a visit and a minor procedure happen on the same day, and sets a 2031 end date for the traditional MIPS quality-reporting track.

The rule takes effect Jan. 1, 2027, and governs what Medicare pays physicians, nurse practitioners, therapists and other clinicians who bill under Part B. The full rule is available through the Federal Register.

How much will Medicare pay doctors in 2027?

By law there are now two conversion factors, the dollar amounts that turn each service’s relative value units into a payment. According to the CMS fact sheet, the 2027 rate for clinicians who qualify through an advanced alternative payment model (APM) is $32.95, down $0.62, or 1.83%, from $33.57. The rate for everyone else is $32.63, down $0.77, or 2.31%, from $33.40.

CMS said the decline is driven by the law, not a new cut by the agency. The 2027 statutory updates are +0.75% for qualifying APM participants and +0.25% for others, with an estimated -0.12% adjustment for changes to some services’ values. But the one-year 2.5% increase Congress provided for 2026 expires, which CMS said “effectively means that current law requires -2.50% reduction in Medicare payment under the PFS compared to CY 2026.”

What changes when a visit and a procedure happen on the same day?

CMS will reduce payment when a separately billed office visit is furnished on the same day as a minor procedure with a 0-day global period. The more expensive service will be paid at 100% and the other at 80%.

The final policy is narrower than the proposal. CMS had proposed paying the second service at 50% and including procedures with 10- and 90-day global periods. After public comments, it limited the reduction to 0-day procedures and raised the payment to 80%. CMS said the change reduces duplicate payment “by patients and the Medicare program” for clinical work already built into the procedure’s value.

Can accountable care organizations now waive patient costs?

Yes, starting April 1, 2027, approved ACOs in the Medicare Shared Savings Program may reduce or eliminate Part B cost-sharing for many items and services for their assigned beneficiaries, according to CMS. The rule also raises shared savings rates for eligible ACOs, adds incentives for first-time participants and simplifies electronic health record reporting, as described in a separate fact sheet.

CMS said 75% of the 476 ACOs participating in performance year 2024 earned shared savings totaling $4.1 billion, with net savings to the Medicare Trust Funds of about $2.5 billion compared with spending benchmarks.

The rule also changes the visit complexity add-on, code G2211, into a modifier (B1) that raises payment for the associated office visit by 16%. A second modifier, B2, available only to clinicians in Shared Savings Program ACOs or the LEAD Model, raises the visit payment by 32%.

What happens to MIPS quality reporting?

CMS will sunset the traditional Merit-based Incentive Payment System (MIPS) reporting option beginning with the 2031 performance period. Clinicians have through 2030 to move to MIPS Value Pathways, which CMS says already cover about 98% of clinicians, or to Advanced APMs. That is two more years of transition time than the proposed rule offered.

The rule finalizes three new MIPS Value Pathways for diabetes, hypertension and hospitalists, and requires clinicians to report at least one specialty-specific “Core Measure” starting in 2027.

What new services will Medicare pay for?

According to CMS, the final rule:

• Creates two new billing codes for advance care planning.
• Sets national payment for health and well-being coaching under general supervision.
• Adds billing for shared medical appointments, with time-based add-on codes.
• Increases payment values for smoking cessation and behavioral health assessments.
• Allows separate billing for clinician time spent diagnosing, treating and counseling patients who have vaccine adverse effects.

CMS also finalized refinements to the Ambulatory Specialty Model, a CMS Innovation Center model launching Jan. 1 that holds specialists accountable for the quality and cost of care for heart failure and low back pain. Separately, CMS said the rule closes an incentive payment loophole that would have produced an estimated $2.38 billion in unintended windfall payments over the next decade.

What does this mean for people with Medicare?

For most beneficiaries, the fee schedule works in the background: it sets what Medicare pays clinicians, and patient coinsurance is calculated from those amounts. The most direct changes for patients are the option for approved ACOs to reduce or waive Part B cost-sharing starting April 1, 2027, and the lower payment for same-day visits and minor procedures, which CMS says reduces duplicate payment by patients.

Medicare open enrollment runs through Dec. 7. HNC has also reported on projected 2027 Part D premium changes for people weighing their drug plan options.

Key Takeaways

• CMS finalized the 2027 Medicare Physician Fee Schedule on Nov. 4, 2026; it takes effect Jan. 1, 2027.
• Conversion factors fall to $32.95 (qualifying APM participants, -1.83%) and $32.63 (all others, -2.31%), mainly because a one-year 2.5% boost for 2026 expires.
• Same-day office visits and 0-day global procedures will be paid at 100% for the costlier service and 80% for the other.
• Approved ACOs may reduce or eliminate Part B cost-sharing for assigned patients starting April 1, 2027.
• Traditional MIPS reporting ends with the 2031 performance period; new codes cover advance care planning, health coaching and shared medical appointments.

Frequently Asked Questions

Featured image: Exam room in a doctor’s office. (Harrison Keely, CC BY 4.0, via Wikimedia Commons)