The Centers for Medicare & Medicaid Services (CMS) released its final 2027 Medicare Physician Fee Schedule on November 4. The policies will take effect January 1, 2027. While CMS narrowed several proposals that the American College of Surgeons (ACS) opposed, the final rule still adds to the payment pressures facing surgical practices. Key points include:
Medicare's Base Payment Factors Will Fall
The 2027 conversion factors are 2.31% lower for clinicians who do not qualify for an advanced alternative payment model and 1.83% lower for those who do, compared with 2026. Much of the decline reflects the expiration of a temporary 2.5% increase that Congress provided for 2026.
These are changes to the conversion factors, not identical reductions to every surgeon's payment. The effect on a particular service also depends on changes to its assigned value and other payment adjustments. Congress could change the scheduled rates before January 1.
A Narrower Same-Day Payment Reduction Still Takes Effect
When the same physician or another physician of the same specialty in the same group provides a separately identifiable office or outpatient visit and a procedure with a zero-day global period on the same day, Medicare will pay the highest-valued service in full and each additional affected service at 80%. CMS had proposed paying the additional services at 50% and applying the policy to procedures with 10- and 90-day global periods as well.
ACS opposed the proposed reduction and continues to oppose a discount for a separately identifiable visit and procedure. Although CMS narrowed the policy, the final rule still reduces payment when these distinct services are provided together.
Several Surgical Payment Decisions Were Favorable
- Postoperative visits: CMS paused the requirement to report postoperative visits using code 99024, reducing a reporting burden. CMS did not propose or finalize broad reductions to 10- and 90-day global surgery values, but it may revisit them in a future rule.
- Surgical code values: CMS accepted values recommended by the AMA/Specialty Society RVS Update Committee (RUC) for five families of new or revised surgical codes, including procedures involving the diaphragm, congenital duodenal obstruction, pancreatic irreversible electroporation, and median arcuate ligament division.
- Joint replacement: For major shoulder, hip, and knee procedures, CMS adopted RUC-recommended physician-work values instead of the deeper reductions it proposed. Those values are still approximately 10% to 13% below 2026 levels.
- Other services: CMS declined to revalue 13 services based on claims data from the Maryland Health Care Commission, citing concerns about the data and methodology. It may revisit the issue in future rulemaking.
Important Concerns Remain
CMS did not repeal the 2.5% physician-work efficiency adjustment adopted for 2026, which ACS has provided data that show this inadequately reflects the work required for many surgical services. The agency also finalized changes to how it calculates practice expenses, including a two-year phaseout of an existing index, despite ACS's request for a slower transition and different treatment of global surgical services. CMS will replace the existing office-visit complexity add-on with percentage-based modifiers; ACS had asked CMS to study the payment effects further before making that change.
The ACS aggressively opposes payment policies that undervalue surgical care and will continue pressing CMS and Congress for sustainable Medicare payment reform. ACS is concerned that mounting payment pressures could make it harder for practices to maintain timely patient access to surgical care.
Please go to SurgeonsVoice today and urge your member of Congress to take action now.
Read the CMS final-rule fact sheet and ACS's comments on the proposed rule.
