CY2027 Physician Fee Schedule Proposed Rule: Summary and Analysis
CMS-1848-P, released July 14, 2026. The payment numbers, the major provisions, and our read, with a companion analysis for MSSP ACOs.
Summary
- Payment falls. The proposed conversion factors are $33.17 (QP, down 1.19%) and $32.84 (non-QP, down 1.68%) as the one-year 2.5% increase expires. Specialty RVU changes stack on top; orthopedic surgery fares worst at −7%.
- Traditional MIPS gets an end date. CMS formally proposes to sunset traditional MIPS after the CY2028 performance year; MVPs become the only option for non-APM clinicians in CY2029.
- ASM gets its year-one provisions. Scoring clarifications, subspecialty exclusions, a rural adjustment, and a voluntary patient-reported outcome option, ahead of the January 1 start. No new mandatory models are proposed.
- The largest MSSP package since 2018. Quality reporting relief, a new collection type, six benchmark methodology changes, and an ACO-only payment modifier. Covered in a companion analysis.
- CMS questions facility payment itself. The rule solicits comment on whether the facility/non-facility differential should exist at all, floating facility indirect practice expense as low as zero.
- Comments were due September 14, 2026. Everything here remains a proposal until CMS publishes the final rule.
In this analysis
Companion analysis and related reading
1.Conversion factors and specialty impact
The one-year 2.5% increase Congress funded for 2026 expires in December and does not carry into the 2027 baseline. Here is what CMS proposes against what you are paid today:
| Conversion factor | 2026 | Proposed 2027 | Change |
|---|---|---|---|
| Qualifying APM participant (QP) | $33.5675 | $33.17 | −1.19% |
| All other clinicians (non-QP) | $33.4009 | $32.84 | −1.68% |
| Anesthesia, QP | $20.5998 | $20.4165 | −0.89% |
| Anesthesia, non-QP | $20.4976 | $20.2143 | −1.38% |
Anesthesia is the only service family with its own statutory conversion factor; these four are all the conversion factors in the rule. Components of the change: statutory updates of +0.75% (QP) / +0.25% (non-QP), a +0.53% budget-neutrality adjustment, and the expired 2.5%. Restoring the cut requires legislation, not comments. Source: CMS-1848-P, Tables D-B1 through D-B4.
The conversion factor is only half your number. The rule's specialty impact table nets the proposed work and practice expense RVU changes, and because those happen inside budget neutrality, they stack on top of the conversion factor cut. Site of service matters more than usual this year:
| Specialty | Non-facility | Facility | Total |
|---|---|---|---|
| Cardiology | +1% | 0% | +1% |
| Interventional pain management | −2% | −1% | −2% |
| Anesthesiology | −1% | 0% | 0% |
| Orthopedic surgery | −5% | −8% | −7% |
| Neurosurgery | −1% | −2% | −2% |
| Physical medicine (PM&R) | −2% | +4% | +1% |
| Emergency medicine | 0% | +1% | +1% |
Combined impact of proposed work, PE, and MP RVU changes on allowed charges; excludes the conversion factor update, so a specialty's real 2027 change is roughly this figure plus the conversion factor change above. Specialty averages hide code-level movement; the widest swings overall are clinical social workers (+12%) and clinical psychologists (+11%) on one end, dermatology and otolaryngology (−9%) on the other. Source: CMS-1848-P, Table D-B5.
One notable absence: the 2.5% "efficiency adjustment" to work RVUs, the most contested policy in last year's rule, does not reappear. CMS treats it as recurring every three years; the next application would be CY2029.
Our take
The gap between the QP and non-QP conversion factors is small in 2027, but it compounds every January from here forward. The two-track structure is CMS's quietest, most durable incentive to move clinicians into Advanced APMs. If you have been treating ACO participation as optional, standing still gets a little more expensive each year. The ACO analysis shows what this rule adds on top.
2.Ambulatory Specialty Model
The model's core design was finalized last year and is settled: mandatory participation for cardiologists (heart failure) and spine/pain specialists (low back pain) in selected areas, with payment adjustments scaling from ±9% to ±12% of Part B revenue. This rule delivers the operational layer for year one:
- Quality measure scoring clarifications for performance year one.
- Subspecialty exclusions for participants whose practice falls outside the episode definitions.
- A new rural adjustment to the payment methodology.
- A voluntary patient-reported outcome data submission option.
All four remain proposals until the final rule. Equally notable is what the rule does not propose: no new mandatory models this cycle. After TEAM in 2026 and ASM in 2027, the pipeline pauses, which makes ASM's first year the template to watch for whatever comes next. Our ASM explainer covers the scoring and payment design these provisions sit on.
The final participant list
CMS published the final list for the 2027 performance year in September 2026: 5,556 participants, 2,215 in the heart failure cohort and 3,341 in the low back pain cohort, down from 6,637 on the February preliminary list. The recheck on 2025 claims could only remove clinicians, so someone on the preliminary list may have dropped off, but no one was added. Search it by NPI in the CMS participant dataset, and see our ASM overview for what participation requires.
3.The proposed MIPS sunset
The speculation is over: CMS formally proposes to sunset traditional MIPS after the CY2028 performance period, making MIPS Value Pathways the only option for non-APM clinicians beginning with CY2029. If finalized, every practice reporting traditional MIPS today has two full cycles left:
| Performance year | Status under the proposal |
|---|---|
| 2027 | Traditional MIPS or an MVP. Three new MVPs proposed (Diabetic Disease, Hypertension, Hospitalist) bring the inventory to 30. |
| 2028 | The final traditional MIPS performance year as proposed; the practical year to run an MVP dry run. |
| 2029 | MVPs only for non-APM clinicians. APM participants continue on the APP. |
The measure inventory moves alongside the sunset. CMS proposes trimming the quality inventory from 190 to 180 measures, with 20 removals and substantive changes to 43 more, so selection math shifts even where clinical performance doesn't. A new core measure requirement (78 designated measures) would replace the outcome/high-priority requirement, with small practices exempt. All 27 existing MVPs are updated for core measures; 23 carry substantive maintenance changes.
These proposals determine which measures reportable through our registry remain available in 2027 and how benchmarks shift. We maintain the full library and will publish the 2027 registry-supported inventory when the final rule locks it.
4.Medicare Shared Savings Program
The rule carries the largest Shared Savings Program package since 2018: relief on the quality measure set, a proposed Medicare eCQM collection type, six benchmark methodology changes including a higher Level E sharing rate and a cut to the regional adjustment, and an E/M payment modifier available only to ACO participant lists and the LEAD model.
The stakes and the audience are different enough that the full analysis lives in its own piece. Read the full ACO analysis: what changes, what it pays, and where we stand.
5.Practice expense and site of service
The rule extends facility indirect-PE treatment to SNF Part A visits and begins phasing out 2007-era specialty survey data in favor of a "PE stabilizer." Then it goes further: CMS openly solicits comment on whether the facility/non-facility payment differential should exist at all, floating facility indirect practice expense as low as zero.
For clinicians who practice in facilities, that question matters more than anything else in this section, and it is where VBCA's site-of-service comment concentrated.
6.Telehealth, digital measurement, and other provisions
RHC/FQHC telehealth and the mental-health in-person waiver run through December 31, 2027, set by statute in the CAA 2026. The broader flexibility cliff remains a congressional question, not a rulemaking one.
An RFI on a FHIR transition: optional dual-track reporting CY2028 to CY2029, mandatory for transitioned measures CY2030. Our comment focused on certified-technology readiness and on where the burden lands, which is on registries and small practices.
The signals worth watching are the prospective primary care payment solicitation and the MSSP specialty-integration RFI, both covered in the ACO article.
7.Comments and next steps
Collection-type mechanics, modifier administration, and the RFI topics are what CMS usually refines between proposed and final rules, so treat the figures here as provisional. Before the final rule:
Baseline your top codes at the proposed rates. Pull your highest-volume Medicare CPT codes and model them at $33.17 / $32.84, not 2026 rates. If Congress restores some of the expired 2.5%, that's upside; budgeting on the proposal costs nothing.
Check every clinician against the final ASM participant list, including anyone who was on the February preliminary list.
If you're in, or considering, an ACO: the participant-list decision carries real money in 2027. Read the ACO analysis before you decide anything.
Plan 2027 on the proposed numbers until the final rule lands.
If a proposal in this rule would hit your practice, tell us what you're seeing and we'll help you plan 2027 around it before the final rule takes effect.
Updated September 23, 2026 with the final ASM participant list and the close of the comment period. The July 16 update added the published rule and the specialty impact figures.