The final Medicare physician fee schedule for 2027 cuts payment 20% for the lowercost service when a patient gets an office visit and a minor procedure on the same day, the Department of Health and Human Services announced on Nov. 4. The rule takes effect Jan. 1, 2027.
HHS says closing the loophole will prevent about $2.38 billion in unintended payments over 10 years. That is about $238 million a year, roughly a tenth of the $2.5 billion in net savings accountable care organizations produced for Medicare in a single year, a calculation from the release’s figures.
What Changes for Same-Day Billing
The 20% cut applies to the lower-cost of the two services when they happen on the same day, the release says. HHS calls it an end to duplicate billing and a closed loophole. Dr. Mehmet Oz, the administrator of the Centers for Medicare and Medicaid Services, said, “This final rule breaks from that status quo.” He described fee-for-service payment as rewarding volume over value. HHS Secretary Robert F. Kennedy Jr. said the rule puts prevention and primary care at the center of Medicare.
What the Rule Does for Prevention and Coordinated Care
The rule creates two new advance care planning codes, launches an Ambulatory Specialty Model for heart failure and low back pain on Jan. 1 and adds three new Merit-based Incentive Payment System value pathways for diabetes, hypertension and hospitalists. It also begins phasing out the traditional Merit-based Incentive Payment System, which sunsets starting with the 2031 performance period, two more transition years than the agency proposed. The release also says CMS finalized separate billing for the clinical time needed to diagnose, treat and counsel patients experiencing vaccine adverse effects. HHS frames the change as a commitment to patient trust and clinical support.
What the Savings Numbers Show
In performance year 2024, 476 accountable care organizations took part and 75% of them earned shared savings, which totaled $4.1 billion, according to HHS. The release puts the net savings to the Medicare trust funds at about $2.5 billion and says the program has saved money for eight consecutive years. Seventy-five percent of 476 is about 357 organizations, a calculation from the two figures.
Starting April 1, 2027, accountable care organizations can eliminate or reduce Part B cost-sharing for patients. The same-day cut is the rule’s headline number, but the accountable care results are larger. The final rule is on the Federal Register as document 2026-22743.
