# US Medicare physician fee schedule changes

> Developing situation record from CLSTR: https://clstr.news/situations/us-medicare-physician-fee-schedule-changes
> Updated: 2026-11-04T23:02:06.000Z. Sources: 12. Developments: 2.

The Centers for Medicare and Medicaid Services (CMS) initiated a process to adjust physician reimbursements for 2027. Initially, CMS proposed a rule suggesting a decrease in payments for most physicians compared to 2026, driven largely by the expiration of a one-year 2.5% increase provided by Congress. The proposal included a 1.68% decrease for clinicians not in an Advanced Alternative Payment Model (APM) and a 1.19% decrease for qualifying APM participants. Specialty impacts varied, with clinical social workers projected to see a 12% increase, while dermatology and otolaryngology faced a 9% decrease.

In the final rule, CMS implemented deeper cuts than originally proposed. Most clinicians will face a 2.31% conversion factor reduction. Specifically, the conversion factor for non-APM clinicians will drop to $32.63, while qualifying APM participants will see a 1.83% decrease to $32.95. The final rule also introduces new billing structures for same-day visits, specifically reducing reimbursement for lower-valued office visits performed alongside 0-day global procedures to 80% instead of 100%. 

Regarding hospital outpatient services, CMS finalized a 2.3% net increase in payment rates for hospitals meeting quality-reporting requirements, though this is offset by a 0.9% productivity adjustment. CMS also implemented changes to the 340B Drug Pricing Program, reimbursing 340B-acquired drugs at the average sales price minus 28%, a move expected to reduce drug spending by approximately $5.5 billion. Additionally, a 2% annual reduction to the OPPS conversion factor for non-drug items will be implemented to recoup approximately $7.8 billion in previous overpayments.

## Claims

- The 2027 Medicare Physician Fee Schedule and Hospital Outpatient Prospective Payment System rules take effect January 1, 2027. (reported by 7 sources)
- The 2027 conversion factor for non-APM qualifying physicians is $32.63, a 2.31% decrease. (reported by 4 sources)
- Hospitals meeting quality-reporting requirements will receive a 2.3% base payment increase in 2027. (reported by 4 sources)
- The 2027 conversion factor for qualifying APM participants is $32.95, a 1.83% decrease. (reported by 3 sources)
- Medicare will reimburse 340B-acquired drugs at the average sales price minus 28% starting January 1, 2027. (reported by 3 sources)
- For same-day office visits and 0-day global procedures, the higher-valued service is paid at 100% and the other at 80%. (reported by 3 sources)
- CMS will implement a 2% annual reduction to the OPPS conversion factor for non-drug items to recoup $7.8 billion. (reported by 2 sources)
- The 340B drug policy change is expected to reduce drug spending by approximately $5.5 billion next year. (reported by 1 source)

## Timeline

### 2026-11-04: CMS issues final 2027 Medicare payment rules for physicians and hospitals

CMS finalized 2027 Medicare rules, including a 2.31% physician fee cut, 2.3% outpatient rate increases, and significant changes to 340B drug program reimbursements.

11 sources. https://clstr.news/cluster/cms-finalizes-2027-medicare-physician-fee-schedule-cuts

### 2026-10-27: CMS proposes 2027 Medicare physician fee reductions

CMS has proposed a 2027 Medicare physician fee schedule that includes payment decreases for most clinicians following the expiration of a congressional increase.

2 sources. https://clstr.news/cluster/cms-proposes-2027-medicare-physician-fee-reductions

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Cite as: US Medicare physician fee schedule changes. CLSTR, https://clstr.news/situations/us-medicare-physician-fee-schedule-changes