CMS issued its calendar year (CY) 2027 Proposed Rule for Medicare Physician Fee Schedule. If finalized, policies will impact payment for physicians and other practitioners, with changes to take effect on or after January 1, 2027.
Key provisions include:
- Updates to Remote Monitoring Program
- Changes to G211 Evaluation and Management Conversion
- Policy Updates to the Medicare Prescription Drug Inflation Rebate Program
- Changes to the Physician Fee Schedule and Conversion Factor
- Changes to Physician Payment
- Reduction in Physician Billing
Remote Monitoring
CMS recently established payment for two code families that relate to remote physiologic monitoring (RPM) and remote therapy monitoring (RTM). CMS now proposes requiring remote therapy monitoring (RTM) be provided only to established patients. To meet this requirement, practitioners would be required to furnish a separately reportable initiating visit in association with the onset of RPM or RTM services. Additionally, payment would only be allowed for RPM or RTM services performed by clinical staff, not contractors.
CMS is also considering updates to how services are valued under PFS due to increased availability of devices and the potential for cost reductions compared to initial estimates. Finally, CMS is considering, and seeking comments on, bundling RPM and RTM CPT codes and developing four new HCPCS G-Codes to describe remote monitoring.
G211 Evaluation and Management Conversion
CMS proposes converting the G2211 evaluation and management complexity add-on code into a modifier, increasing payment for the associated E/M code by 16%. Payment would increase by 32% for practitioners in the LEAD Model ACOs and Shared Savings Program.
Medicare Prescription Drug Inflation Rebate Program
The Inflation Reduction Act established requirements under which drug manufacturers must pay inflation rebates if they raise prices for certain drugs payable under Part B and/or covered under Part D faster than the rate of inflation. Last year CMS had proposed excluding 340B acquired drugs in its calculation and offered a voluntary data repository to exclude these billed units from consideration. However, beginning 1/1/2027, this proposal would require covered entities to submit certain data elements to CMS for each 340B claim covered by Part D dispensed by such covered entity or its contract pharmacy. CMS is proposing to require the data elements be submitted on a quarterly basis and shall include: (1) Date of Service ; (2) Prescription (Rx) Number; (3) Fill Number; (4) Dispensing Pharmacy NPI; and (5) NDC-11 (6) 340B ID. CMS notes that TPA may be allow to submit this data on behalf of covered entities.
PFS Rate Setting and Conversion Factor
In compliance with recent 2026 statutory changes, CMS proposes a rule that creates two conversion factors: one for qualifying alternative payment model (APM) participants (QP) and one for physicians and practitioners who are not QPs.
For APM participants, the proposed conversion factor is $33.17. This would be a decrease of $0.40, or 1.19%, from the current conversion factor of $33.57. The proposed conversion factor for non-QPs is $32.84. This would be a decrease of 0.56%, or 1.68%, from the current conversion factor of $33.40.
CMS cites the expiration of a one-year 2.50% PFS conversion factor increase authorized by Congress in the Working Families Tax Cut (WFTC) for CY 2026.
Reduced Physician Bills
CMS proposes reducing payment when a physician bills a separately identifiable office or outpatient evaluation and management visit on the same day as a 0-, 10-, or 90-day global procedure. The higher-cost service would be paid at 100%, and the other service would be paid at 50%.
Specifically, we are proposing to require that a provider or supplier that is a covered entity as defined at Sec. 10.3 must submit the following data elements associated with each claim for units of a covered Part D drug billed to Medicare by such covered entity or its contractor(s) (such as contract pharmacies) for which a manufacturer provides a discount under the 340B Program to such covered entity: (1) Date of Service (that is, the date the prescription was filled by the pharmacy); (2) Prescription or Service Reference Number; (3) Fill Number (that is, the code indicating whether the prescription is an original or a refill; if a refill, the code indicates the refill number); (4) Dispensing Pharmacy NPI; and (5) NDC-11. Additionally, we are proposing at Sec. 428.203(c)(2) that, in addition to submitting the data elements set forth in proposed Sec. 428.203(c)(1), a provider or supplier that is a covered entity as defined at Sec. 10.3 must submit its 340B ID and name as designated in the 340B OPAIS database.
We propose at Sec. 428.203(c)(3) to require that 340B providers report data on a quarterly basis (though they may choose to submit more frequently) within 1 calendar quarter following the close of the relevant calendar quarter. For example, for claims with dates of service between October 1, 2027, through December 31, 2027, 340B providers would submit the data elements from Part D 340B claims to the 340B repository no later than March 31, 2028. Quarterly submissions are necessary so CMS has timely information to assess the reliability of the data for potential future use in removing 340B units from Part D inflation rebate calculations. In addition, quarterly submissions may minimize the burden on 340B providers by reducing the amount of data in each submission and the amount of quality assurance necessitated for each submission. We solicit comments on this proposal.
Published July 24, 2026
