A 2027 Medicare Physician Fee Schedule proposal would pay only the highest-valued service in a same-day E/M-plus-procedure encounter at 100% and cut the conversion factor for most physicians, creating layered payment reductions that affect routine office workflows and revenue.
CMS proposes that on visits with multiple services the highest-valued code is paid at 100% while other same-day services are paid at 50%, changing current full-payment practice for same-day E/Ms with procedures.
The proposal also reduces the Medicare conversion factor for 2027: roughly a 1.2% cut for physicians in alternative payment models (APMs) and about a 1.7% cut for others, trimming pay across the board.
# Same-Day E/M Payment in Half
CMS's proposed 2027 Medicare Physician Fee Schedule contains a payment change that directly affects office visits where physicians perform an evaluation and management (E/M) service and a procedure on the same day. The proposal modifies how Medicare handles overlap between stand-alone E/M visits and services that fall inside a global surgical period.
Currently, when a physician documents a significant, separately identifiable E/M on the same day as a procedure (using modifier 25), Medicare pays both the E/M and the procedure in full if the documentation supports both. CMS's proposed rule would pay the single highest-valued service at 100% and pay every other service billed that same day at 50%.
Separately, CMS proposed lowering the conversion factor for 2027. The conversion factor multiplies each service's RVUs to determine payment. CMS proposed approximately a 1.2% reduction for physicians participating in alternative payment models (APMs) and about a 1.7% reduction for physicians paid under traditional fee-for-service arrangements. That cut reduces reimbursement across virtually every billed service.
CMS published the proposed rule on July 14, 2026. The agency accepted public comments through September 14, 2026. CMS indicated it would announce a final rule in November and, if adopted as proposed, changes would take effect January 1.
CMS rationale and stakeholder response
CMS says the existing approach can result in duplicated payment because the global surgical package's valuation already includes some E/M resources. To avoid paying twice for overlapping work, CMS would limit full payment to the highest-valued service on the same day.
Association and specialty groups contest that position and point to existing processes for resolving true payment overlap. The AMA's position is represented among public comments filed in response to the proposed rule.
What this means for practice revenue and workflows
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