By Elizaveta Bannova, Billing Department WCH, Educational Officer AAPC
Every fall, the same thing happens. CMS releases the proposed Physician Fee Schedule for the coming year, the comment window opens, and almost nobody outside a handful of billing departments pays attention — until January, when the new numbers show up on a remittance advice, and someone asks, “Wait, when did this happen?”
This year, the window closes September 14. The rule is already public. And for once, you don’t have to wait for the final numbers to know roughly where you’ll stand — because the math CMS uses is public too, and we’ve already run it for a first set of client specialties.
The Two Conversion Factors that Will Shape Your 2027 Medicare Payment
Medicare payment doesn’t move as one number. It moves as two, depending on whether you participate in a Qualifying Advanced Alternative Payment Model (QP) or not — and both are proposed to fall in 2027, largely because the one-time 2.5% statutory bump that cushioned 2026 rates is scheduled to disappear.
| 2026 | 2027 Proposed | Change | |
| Qualifying APM (QP) conversion factor | $33.5675 | $33.1693 | −1.19% |
| Non-qualifying conversion factor | $33.4009 | $32.84 | −1.68% |
Neither number is dramatic on its own. But the conversion factor is only one part of the equation. The rest of what determines whether a specific practice sees a raise or a cut is code- and locality-specific: the RVUs assigned to the service, and the geographic adjustments — the Geographic Practice Cost Indices — applied to them.
A note on which scenario this preview uses: the code-level examples below are calculated using the QP conversion factor and QP-adjusted 2026 baseline only. If your practice bills under the non-QP conversion factor, the percentage changes on your remittance will differ from what’s shown here — in most cases by roughly half a point, since the non-QP factor is falling further (−1.68% vs. −1.19%). A future client-specific report can show both scenarios side by side for your specific codes.
The Part that Actually Determines Your Number: GPCI
Medicare doesn’t pay the same amount for the same CPT code everywhere in the country. Every payment locality carries its own set of three Geographic Practice Cost Indices — Work, Practice Expense, and Malpractice — and CMS proposes updates to these indices as part of the same rule. Here’s New York, Area 02 (MCB-E02), one of the localities represented in our client base:
| GPCI Component | 2026 | 2027 Proposed | Change |
| Work GPCI | 1.064 | 1.064 | 0.00% |
| Practice Expense GPCI | 1.189 | 1.178 | −0.93% |
| Malpractice GPCI | 1.857 | 1.803 | −2.91% |
(These locality-specific figures should be cross-checked against the final Addendum D/E CMS publishes before the report goes out — we’re treating them as directional for this preview.)
Work stayed flat here. Practice Expense and Malpractice both eased down, and because PE and malpractice adjustments can materially affect the payment for codes with a substantial PE or MP component, those two indices can pull a code’s final number further than the conversion factor alone would suggest.
That’s the piece a “conversion factor dropped 1.2%” headline always misses: a national percentage doesn’t tell you what happens to your specific code in your specific locality — GPCI is one of the key factors that turns a national trend into a practice-specific payment, and it moves differently by locality and by specialty mix.
The Actual Formula CMS Runs — and the One You Can Run Yourself
The core Medicare payment calculation for a given code, in a given locality, works like this:
[(Work RVU × Work GPCI) + (PE RVU × PE GPCI) + (MP RVU × MP GPCI)] × Conversion Factor
That is the core calculation behind locality-adjusted physician fee schedule payment. It’s worth being precise about what it covers and what it doesn’t: this formula gives you the baseline allowed amount for a code. It does not capture every adjustment that can apply on top — multiple-procedure reductions, facility vs. non-facility PE splits, PC/TC splits, status-indicator restrictions, or the new same-day E/M-plus-global-procedure policy CMS has proposed for 2027. For most single-code, non-facility billing scenarios, though, this is the calculation that does the heavy lifting, and it’s the one you can run yourself: pull the proposed RVUs from Addendum B, apply your locality’s GPCIs, apply the conversion factor matching your participation status, and see roughly where you’ll land — months before it shows up as real money on a remittance.
What We Found — in a First Pass Across Our Client Specialties
We ran a first set of codes — commonly billed CPT/HCPCS codes across the specialties in our client base — through the formula above, comparing proposed 2027 QP payment to 2026 QP payment for New York Area 02. (We use QP throughout because that’s the scenario we ran first — this is not a statement about overall Medicare payment trends, and non-QP practices will see somewhat different percentages, as noted above.) This is not yet a complete pass across every code every client bills; a fuller pass is planned as a follow-up. But the pattern in this first set is already informative, and it is not uniform — which is exactly why a specialty-wide headline number would hide the practices that need to see their account rep first.
| Specialty | Codes Reviewed | Trending Up | Trending Down | No Material Change | Range of Change |
| Physical / Occupational Therapy | 8 | 8 | 0 | 0 | +1.2% to +2.1% |
| Podiatry | 8 | 8 | 0 | 0 | +0.9% to +2.7% |
| Vascular Surgery | 8 | 7 | 1 | 0 | −1.5% to +2.6% |
| Diagnostic Studies | 26 | 14 | 6 | 6 | −4.0% to +86.6%* |
| Behavioral Health & Care Management | 10 | 4 | 6 | 0 | −3.0% to +17.0%* |
| Pain Rehab / Spinal Procedures | 5 | 1 | 4 | 0 | −5.0% to +1.0% |
| Allergy Testing & Immunotherapy | 6 | 1 | 5 | 0 | −4.5% to +1.5% |
| Evaluation & Management | 6 | 0 | 6 | 0 | −4.5% to −2.0% |
| Ophthalmology / Optometry | 9 | 0 | 9 | 0 | −5.5% to −1.0% |
| EMG / Nerve Conduction Studies | 4 | 0 | 4 | 0 | −6.1% to −1.0% |
| Infusion Services | 2 | 0 | 2 | 0 | −3.0% to −1.0% |
| Simple Surgeries | 3 | 0 | 3 | 0 | −4.0% to −1.0% |
A “trending up” or “trending down” count tells you direction, not magnitude — a specialty with 8 codes up 1% each and 1 code down 8% is not a net winner. Treat this table as a starting point for a conversation about your specific mix, not a verdict on the specialty. “No Material Change” covers codes where the proposed 2027 payment moves by a negligible amount. For Diagnostic Studies in particular, the range (−4.0% to +86.6%) is driven almost entirely by one high-impact code (93892, flagged separately below) and should not be read as representative of the specialty as a whole. A future client-specific report can include weighted, volume-based impact once we have your billing mix.
Want to see the full code-level comparison behind this first-pass analysis? We’ve included the 84 CPT/HCPCS codes used in the analysis, with the proposed 2027 QP payment, 2026 QP-adjusted amount, dollar change, percentage change, and direction of change. View the full code-level comparison.
A few specific examples, because “trending down” doesn’t mean much until you see it in dollars — all figures below are from this preliminary pass and should be treated as directional pending a final line-by-line reconciliation against CMS’s published Addendum B:
- Ophthalmology: 92014 (established comprehensive exam) is trending down roughly 4.6%. 68761 (tear duct closure) is trending down roughly 5.5%.
- Standard office visits: 99205 (new patient, high complexity) is trending down roughly 4.5%. Even the routine 99213 is trending down roughly 2.0%.
- EMG/NCS: 95885 is trending down roughly 6.1%, one of the larger single-code drops we found outside diagnostic imaging.
- PT/OT: every code we reviewed for this specialty is trending up, including 97530 (therapeutic activities), up roughly 2.1%.
- Podiatry: every code we reviewed for this specialty is trending up, including 11056 (paring of hyperkeratotic lesions) and 11730 (nail plate avulsion).
- Vascular surgery: most codes we reviewed, including 37277 and 37294 (complex revascularization), are trending up roughly 2.6%.
Two Outliers Worth Flagging Now — Pending Final Verification
Two figures from this first pass are large enough that we want to name them now rather than wait for the full report — but precisely because the moves are this large, we’re treating them as flags for a direct conversation, not confirmed numbers:
- 93892 (transcranial Doppler, emboli detection) is showing a very large proposed increase in this pass, apparently driven by a large increase in the proposed non-facility Practice Expense RVU. Given the size of the move, we’re verifying this line-by-line against CMS’s published RVU files before treating it as final.
- 99493 (subsequent psychiatric collaborative care management) is showing a double-digit proposed increase, alongside apparent increases in 90832 and 90834.
If either code sits in your billing mix, this is worth a conversation now — both to plan for the possible upside and because we want to walk through our numbers with you rather than have you rely on a headline percentage.
What We’re Asking You to Do Before September 14
None of this is final. It’s a proposed rule, comments close September 14, and CMS can and does adjust numbers between proposal and final publication — sometimes meaningfully. That’s exactly why the smart move is to look now, while there’s still a window to weigh in, rather than in December when the only option left is to absorb whatever CMS published.
If your specialty or your top codes aren’t in the examples above, call your account representative and we’ll run your specific codes with you — under both the QP and non-QP conversion factor, for your locality. We already have the formula and the framework; getting your specific numbers back to you doesn’t take long.
A future step for us is a full, specialty-specific report covering both conversion factor scenarios for the codes you actually bill, once we’ve reconciled this first pass against the final published RVU addenda. We’ll be in touch as that work progresses.
The rule is public. The formula is public. The only thing that isn’t public yet is what it means for your practice — and that’s exactly what we’re here to figure out with you, before it’s too late to do anything but read the final number.
Figures reflect the CMS CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P), compared against 2026 rates, for New York Payment Locality Area 02 (MCB-E02), non-facility/global basis, using the Qualifying APM Participant (QP) conversion factor unless otherwise noted. All 2027 figures are proposed-rule estimates from a preliminary internal analysis, not final payment rates, and remain subject to change before the final rule is published and before our line-by-line reconciliation against CMS’s published addenda is complete. Practices in other localities, or billing under the non-QP conversion factor, will see different results even for identical codes.
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