Every number in this article is a proposal. CMS can change any of it in the final rule, so treat these figures as planning estimates, not 2027 payment rates.

Each state’s statute and agency regulations govern coverage, payment and disputes. Medicare policies apply only where a state adopts them, as Texas does for coding and payment policy on non-network professional claims.

Dividing net A/R by gross daily charges produces a flattering number that means nothing.

DWC Form RFA with supporting records; prospective decision within 5 business days

Preauthorization for listed services; carrier answers within 3 working days

MGMA suggests running aging by payer, expecting clinicians to close encounters within 72 hours and staff to post charges within two days, and working denials daily, starting with high-dollar claims and the nearest appeal deadlines. Watch filing limits, too: Medicare requires claims within one calendar year of the date of service.

62321, 62323, 64479, 64480, 64483, 64484

.

Clean claim rate

Likely does not meet criteria; reasons are listed

• 
  

• Some services on the request are affirmed and others are not (effective April 1, 2026)

8.0%

Carve-outs that send workers’ comp or personal-injury accounts to a team that focuses on them.

Missing or invalid data, a duplicate, or an out-of-scope request

Missing reports

For most orthopedic visits the effect is small. CMS’s G2211 guidance excludes discrete, time-limited care such as fracture treatment, and the add-on is not paid on visits billed with modifier 25 unless the other service is a preventive service, vaccine administration or annual wellness visit.

1. Screen at scheduling: Original Medicare (not Medicare Advantage or Railroad Medicare), a service delivered in a WISeR state and a primary code from the WISeR list.

2. Choose a pathway by service line. For planned knee arthroscopy and spine procedures, prior authorization gives you a coverage decision before the case; pre-payment review leaves payment at risk after the service.

3. Build note templates from CMS’s checklists so they capture mechanical symptoms, imaging, conservative care, pain or function scores and session counts.

4. Track UTN expiration. If surgery moves beyond 120 days, submit a new request.Identify the carrier or third-party administrator and the claim number; in New York, also capture the WCB case number when one exists.

5. Work non-affirmations quickly: read the rationale, add missing records, request peer-to-peer review and resubmit, or deliver an ABN if the patient chooses to proceed.

6. Calendar every ADR’s 45-day deadline.

7. Track affirmation rates by surgeon to see who is close to exemption.

. For other 2027 Medicare changes, see our CY 2027 Physician Fee Schedule overview

CMS released the proposed calendar year (CY) 2027 Medicare Physician Fee Schedule (PFS) rule, CMS-1848-P, on July 14, 2026. It was published in the Federal Register on July 16, 2026, and public comments closed September 14, 2026. If finalized, most policies take effect January 1, 2027.

For orthopedic practices, four proposals matter most: a lower conversion factor, deep cuts to joint replacement values, a same-day E/M payment reduction and practice expense changes.

Every number in this article is a proposal. CMS can change any of it in the final rule, so treat these figures as planning estimates, not 2027 payment rates.

We will update this article when CMS publishes the CY 2027 final rule. As of October 14, 2026, it has not been released. The CY 2026 final rule appeared in the Federal Register on November 5, 2025, so early November is the window to watch.

What are the key CY 2027 proposals for orthopedic practices?

What would the 2027 conversion factor be?

Since 2026, the law has required two conversion factors. CMS proposes $33.1693 for qualifying APM participants (QPs), down 1.19% from $33.57, and $32.8409 for all other clinicians, down 1.68% from $33.40. Unless a surgeon is a QP through an Advanced APM, the lower factor applies.

The statutory updates (+0.75% for QPs and +0.25% for everyone else) and a +0.53% budget neutrality adjustment push rates up. They are outweighed by the expiration of the one-year 2.5% increase that Public Law 119-21 provided for CY 2026 only.

How much would orthopedic surgery lose overall?

CMS’s specialty impact table (Table D-B5) estimates that the proposed RVU changes would reduce orthopedic surgery’s total Medicare allowed charges by 7%: 5% for office-based (non-facility) services and 8% for services furnished in hospitals and ASCs. By component, work RVUs account for -3%, practice expense -4% and malpractice -1%. Hand surgery is estimated at -5%.

CMS’s table captures RVU changes only, so the conversion factor cut applies on top.

CMS attributes the decrease largely to the modifier 25 proposal and the removal of the indirect practice cost index. Results vary by surgeon: CMS’s practitioner-level file shows about 41% of orthopedic surgeons with total RVU declines greater than 5%.

What happens to joint replacement and shoulder arthroplasty payments?

In April 2025, the RUC flagged these codes because Medicare data for 2021 to 2023 showed them performed as inpatient cases less than half the time, while their global packages still included inpatient hospital visits. After the RUC resurveyed them, CMS rejected its values as building in higher intensity even though surveyed times fell and the typical case had moved to outpatient settings.

In dollars, CMS’s selected-procedures file shows the national surgeon payment for 27447 falling from $1,159.35 in 2026 to $922.17 under the proposal, and for 27130 from $1,162.02 to $925.46, about 20% each. These are facility rates at the nonqualifying conversion factor, before geographic adjustment.

A second step is built in. For codes that are not new or revised, Medicare law phases in total RVU reductions of 20% or more over two years, and CMS caps the first-year drop at 19%. CMS’s phase-in file lists 27130, 23470 and 23472, so part of their reduction would carry into 2028 if finalized. 27447 is not on that list.

AAOS and several orthopedic specialty societies urged CMS to keep the CY 2026 work RVUs for all four codes. CMS separately invited comment on a nomination to use empirical surgical time data for 23472, 27130 and 27447, which could bring further changes in later rulemaking.

How would the same-day E/M reduction work?

CMS proposes to reduce payment when the same physician, or a physician in the same group practice, bills a separately identifiable office or outpatient E/M visit with modifier 25 on the same day as a procedure with a 0-, 10- or 90-day global period. The highest-paid service would be paid at 100%, and every other procedure or E/M visit that day at 50%.

CMS proposed a narrower version in 2019 but did not finalize it. It now argues that visit work built into global packages is being paid twice, and it asked whether 25% would be a better reduction and whether inpatient E/M visits should be included.

Here is how it would play out, using proposed 2027 national non-facility RVUs at the nonqualifying conversion factor:

• 99214 (moderate-complexity established-patient visit, 4.04 RVUs, about $132.68) plus 20610 (major-joint injection without ultrasound guidance, 2.00 RVUs, about $65.68): the visit is paid in full and the injection drops to about $32.84.

• 99213 (low-complexity established-patient visit, 2.84 RVUs) plus 20611 (major-joint injection with ultrasound guidance, 3.04 RVUs): the injection is the higher-paid service, so the visit is paid at half.

The documentation standard doesn’t change: the E/M must still be significant and separately identifiable from the procedure’s pre-service work. CMS says it will use claims edits, comparative billing reports and medical review to watch for practices that move visits to separate days to avoid the reduction. Our guide to billing an E/M on an orthopedic injection day covers documentation in detail.

What changes are proposed for practice expense?

For CY 2026, CMS cut indirect practice expense (PE) for services furnished in facilities by allocating the work-based portion of facility PE at half the non-facility amount. For CY 2027, CMS proposes to:

• Remove the indirect practice cost index (IPCI), which anchors specialty PE to survey data from 2007 or earlier, over two years: half its effect in 2027 and none in 2028.

• Allocate indirect PE using both work RVUs and clinical labor for all services except 10- and 90-day global codes.

• Limit year-over-year PE RVU changes to 5% for codes that are not new, revised or revalued; the statutory phase-in still applies on top.

CMS also asked whether the facility and non-facility differential still makes sense, including whether indirect PE for hospital-employed physicians should fall below 50%, possibly to zero, and whether a new modifier should identify employed physicians. Nothing on that is proposed yet.

The -2.5% efficiency adjustment to work RVUs and intraservice time for non-time-based services took effect January 1, 2026. CMS’s finalized policy reapplies it every three years, and the CY 2027 proposal does not add a new round.

Is CMS changing the global surgical package?

Not for 2027 payment. CMS proposes to pause the data collection that requires practices with 10 or more practitioners in nine states to report 99024, the no-pay code for post-operative visits included in the global package. CMS says its data show many of those visits are not occurring and asks whether all practitioners should report 99024 in the future.

CMS also posted a file showing, for each 10- and 90-day global code, current work RVUs, reported post-operative visits and the work RVUs that would remain if all post-operative visits were removed. CMS describes it as a purely arithmetic approach and asked for comments on revaluation strategies for future rulemaking. AAOS argues the underlying 99024 data are unreliable.

What happens to the G2211 add-on?

CMS proposes to replace the visit complexity add-on code G2211 with a payment modifier (placeholder MOD1) worth 16% of the base office/outpatient or home E/M payment. A second modifier (MOD2) would pay 32% for clinicians in Shared Savings Program or LEAD Model ACOs. The current modifier 25 restrictions would carry over, and CMS asked whether to allow the modifier on visits billed with modifier 25 on global procedure days.

For most orthopedic visits the effect is small. CMS’s G2211 guidance excludes discrete, time-limited care such as fracture treatment, and the add-on is not paid on visits billed with modifier 25 unless the other service is a preventive service, vaccine administration or annual wellness visit.

Which other 2027 proposals should orthopedic practices watch?

Potentially misvalued codes. CMS asks the RUC to review several long-unreviewed codes, including 20610, 29824 (arthroscopic distal clavicle excision), 24515 (plate fixation of a humeral shaft fracture), 20680 (deep hardware removal) and 64721 (open carpal tunnel release). Their 2027 values would not change from this alone.

Remote therapeutic monitoring (RTM). RTM would be limited to established patients, require a separately reportable initiating visit and be payable only when the practice’s own clinical staff, not contracted vendors, perform it.

Therapy thresholds. The KX threshold for PT and speech-language pathology combined, and separately for OT, would rise from $2,480 to $2,540. The $3,000 targeted medical review threshold stays in place through CY 2027.

Ambulatory Specialty Model (ASM). This mandatory model starts January 1, 2027. Its low back pain cohort includes orthopedic surgeons with enough attributed episodes in selected areas, and CMS has posted the final 2027 participant list. Proposed refinements include replacing the functional status measure with Functional Outcome Assessment (Q182), adding a lumbar MRI measure and a rural scoring adjustment. Payment adjustments begin in 2029 at up to 9% either way, rising to 12%.

TEAM. The Transforming Episode Accountability Model, mandatory for selected hospitals since January 1, 2026, holds them accountable from surgery through 30 days after discharge for procedures that include lower extremity joint replacement, hip and femur fracture surgery and spinal fusion. The proposed rule lists TEAM among expected Advanced APMs for 2027.

What should your practice do before January 1, 2027?

1. Model your exposure. Price your 2026 Medicare volume for your top codes with the proposed Addendum B RVUs and the $32.8409 conversion factor, then rerun it when the final rule posts.

2. Size the same-day E/M effect. Report how often each clinician bills an office E/M with modifier 25 on a 0-, 10- or 90-day procedure day, and which service pays more.

3. Audit same-day documentation. Confirm the E/M note shows work beyond the procedure’s usual pre-service evaluation, and don’t move visits to separate days just to avoid the reduction.

4. Revisit arthroplasty economics, including surgeon compensation models and payer contracts that pay a percentage of Medicare rates.

5. Prepare claim edits for a G2211 replacement modifier, new KX thresholds and expected-payment logic, so variance reports don’t flag correct 50% payments as underpayments.

6. Check whether your surgeons are on CMS’s 2027 ASM participant list, and assign someone to its reporting requirements.

7. Keep reporting 99024 if you are currently required to, until the final rule confirms the pause.

8. Review RTM vendor arrangements if third-party staff deliver your monitoring services.

How Rette helps

Rette’s agents read the operative and clinical notes in the EHR your practice already uses, suggest codes and flag documentation gaps, such as a same-day E/M that isn’t clearly separate from the procedure. They validate claims against NCCI, NCD and LCD rules before submission. Prior authorization, denials, appeals and workers’ compensation work sit in one prioritized queue, so your team can apply the 2027 rules consistently once CMS finalizes them.