What’s Changing in Medical Billing in 2027, and What It Means for Your Collections

Every July, CMS (Centres for Medicare & Medicaid Services) releases its proposed Physician Fee Schedule for the year ahead. Most practices skim it and move on. This year is worth a slower read. Nothing in it is dramatic on its own, but a small cushion is about to disappear at the same moment several rules get more detailed.

The proposal came out on July 14, 2026. Comments closed on September 14, and a final rule is expected this fall. Here is what it says, what it might mean for you, and how to prepare without losing sleep.

The cushion that’s going away

For 2026, Congress added a one-year 2.5% increase to the Medicare conversion factor. It was always temporary, a bridge while the bigger payment-reform conversation carried on in Washington. Many practices folded it into their budgets and never noticed the expiration date.

For 2027, that bridge is gone. The usual statutory updates (+0.75% for practitioners in qualifying APMs (Alternative Payment Models), +0.25% for everyone else) plus a +0.53% adjustment for changes in relative values are not enough to replace it. As proposed:

• Qualifying APM participants: conversion factor of about $33.17, roughly 1.2% lower than 2026.
• Everyone else: conversion factor of about $32.84, roughly 1.7% lower.

The effect on your own practice depends on your speciality and service mix. Some specialties come out slightly ahead in CMS’s impact tables, and others come out behind. Ten minutes with your speciality society’s summary will tell you more than any headline. 

The good news tucked inside the rule

This is not only a cut story. Several pieces work in your favour:

• G2211 gets a makeover. CMS (Centres for Medicare & Medicaid Services) proposes turning this add-on into a modifier that raises payment on the related E/M (evaluation and management) visit by about 16%. Because it is a percentage, it scales evenly across visit levels instead of being a flat amount.
• Telehealth stays steady. Congress has already extended the major Medicare telehealth flexibilities through December 31, 2027. CMS is also proposing to add new services to the telehealth list, so there is no cliff on January 1.
• Prior authorization is going digital. Starting January 1, 2027, Medicare Advantage, Medicaid and CHIP (Children’s Health Insurance Program) managed care, and federal-exchange health plans must have a Prior Authorization API (application programming interface) in place. You are not required to use it, but electronic requests that pull payer requirements straight into your EHR (electronic health record) could take a lot of phone and fax time out of your week.
• The October code update is a light one. The FY (fiscal year) 2027 ICD-10-CM (International Classification of Diseases, Tenth Revision, Clinical Modification) update has 190 new codes, 30 deletions and four revised titles, compared with 487 new codes last year.

The changes that deserve a plan

A few proposals need some thought, mostly because they touch how you already work.

Same-day visit plus a procedure. If you bill a separate E/M visit on the same day as a procedure with a global period, CMS proposes paying the more expensive service in full and the other at 50%. If this describes a regular part of your day, run the numbers on last quarter’s claims.

Remote monitoring: RPM (remote patient monitoring) and RTM (remote therapeutic monitoring). CMS proposes paying only when the clinical staff who do the work are employed by your practice, rather than supplied by an outside vendor. It also proposes a separate initiating visit at the start of service and limiting RTM to established patients. If you use a vendor today, you have time to weigh bringing the work in-house against renegotiating terms.

MIPS (Merit-based Incentive Payment System) is on the horizon for change. CMS proposes to phase out traditional MIPS reporting in 2029 and move clinicians toward MIPS Value Pathways. This is a proposal, not a done deal, so treat it as a heads-up.

TRY THIS BEFORE OCTOBER 1

Open your charge templates and favourites lists and search for any diagnosis codes that are being deleted. A retired code left in a template is one of the easiest denials to avoid.

A calm four-step prep

1. Map your exposure. List the services you bill that touch these changes: procedures with same-day visits, remote monitoring, telehealth, G2211.
2. Model the RPM/RTM question. What happens to revenue if outsourced staff no longer qualify? What does an in-house version cost?
3. Stress-test telehealth workflow. Confirm staff are applying the right modifiers, place-of-service codes and modality for each visit type.
4. Ask your top payers about their prior authorization plans. Find out when their electronic workflows go live.

What could still change

Nothing here is final. The conversion factors, the RPM/RTM staffing rule and the same-day payment split could all shift before January 1. Still, the direction has been steady for years: tighter rates, more detail expected in coding, and more attention on outsourced services. Preparing against the draft means you set the timeline instead of CMS.

The bigger picture

This is not the first temporary fix in physician payment, and it will not be the last. Practices that build their workflows around the trend, not the one-year relief, are the ones that stay calm when the next bridge expires. AmFac Medical Management helps practice teams with exactly this kind of readiness work, from workflow reviews to vendor decisions.