CMS finalizes 2027 physician fee schedule with even larger conversion factor cuts
The Centers for Medicare & Medicaid Services on Wednesday finalized the 2027 physician fee schedule, incorporating even larger pay cuts than originally proposed.
Beginning Jan. 1, CMS will employ a conversion factor—used to calculate radiologist payments—of $32.63, a -2.31% (or $0.77) reduction versus the current 2026 figure. This compares to the -1.68% decrease originally outlined by the agency in its initial July proposal.
Meanwhile, providers participating in alternative payment models—which reward docs for delivering high-quality, cost-efficient care—will see their conversion factor fall to $32.95, a -1.83% (or $0.62) cut compared t0 2026. CMS had originally suggested a -1.19% cutback for such physicians its initial July proposal.
These reductions result from the expiration of a one-time, 2.5% doc pay bump under the Working Families Tax Cut Act. Physician lobbying groups criticized the final fee schedule on Wednesday.
“Conversion factor cuts of 1.83% for qualifying [alternative payment model] participants and 2.31% for all other clinicians further degrade an already fragile payment system and amplify severe financial challenges caused by years of inadequate Medicare reimbursement,” Anders Gilberg, senior VP of government affairs for the Medical Group Management Association, which represents over 15,000 medical practices in radiology and other specialties, said in a statement Nov. 4.
“Compounding this ongoing reimbursement decline,” Gilberg added, CMS is moving forward with plans to cut payments when office visits are billed the same day as a procedure. Medicare is targeting instances where physicians use the “modifier 25” to bill for different services in the same doc-office visit. However, CMS is cutting back the reduction for the second service from 50%—as originally proposed in July—down to 20%. MGMA contends this smaller cut will still “interfere with physician practices’ ability to deliver same-day care.”
Several radiology societies also had criticized this proposal in August. Experts note that interventional radiologists often provide separately identifiable evaluation and management services on the same day as image-guided procedures. Possible reasons could include determining treatment appropriateness, evaluating new symptoms or managing any complications.
Responding to this feedback, CMS will pay 100% for the most expensive service during the visit, while reducing reimbursement for other procedures or E/M services by 20%. In addition, the policy will only apply to 0-day global procedures and not 10- or 90-day ones, as originally proposed in July.
CMS claims these changes will help curb waste by discouraging radiologists and other physicians from billing Medicare for duplicate services.
“For too long, fee-for-service payment has rewarded volume over value, fueling a reactive system of sick care,” CMS Administrator Mehmet Oz, MD, MBA, said in a statement Nov. 4. “This final rule breaks from that status quo. By ending duplicate billing and closing costly loopholes, we are protecting taxpayers and directing Medicare dollars to clinicians doing the hard work of keeping patients healthy.”
In its summary of the final rule, the American College of Radiology notes that the overall impact on specialist pay is expected to be net positive. According to CMS, diagnostic radiologists will see a 1% overall increase when accounting for all changes versus 3% for interventional rads, 1% for nuclear medicine specialists, and 2% for radiation oncology.
“Note that actual impacts may be less due to the conversion factor decrease,” ACR reported.
You can read more about the changes that impact radiology in ACR’s initial summary, along with the CMS fact sheet, news announcement and final rule.
Physician lobbying groups including the Radiology Business Management Association and MGMA on Wednesday urged lawmakers to stop these pay reductions in the lame-duck session. The latter suggested doing so by adopting the previously proposed Patients First Act of 2026, which would tie physician pay to a measure of inflation.
“Demand for medical imaging continues to grow, yet we’re once again facing reimbursement cuts that threaten to make timely access to care even more difficult,” Kit Crancer, chairman of the RBMA’s Radiology Patient Action Network, told Radiology Business Wednesday. “Congress needs to step in and stop these cuts, but we can’t keep coming back to the same problem year after year. Another temporary fix isn’t a long-term solution. It’s past time for Congress to do its job, stabilize physician reimbursement, and finally deliver a permanent solution that protects patients and the physicians who care for them.”
Marty Stempniak has covered healthcare since 2012, with his byline appearing in the American Hospital Association's member magazine, Modern Healthcare and McKnight's. Prior to that, he wrote about village government and local business for his hometown newspaper in Oak Park, Illinois. He won a Peter Lisagor and Gold EXCEL awards in 2017 for his coverage of the opioid epidemic.