What Is the Proposed 2027 Medicare Payment Change for Family Medicine?
As of August 2026, the CMS CY 2027 Medicare Physician Fee Schedule proposed rule, published July 14, 2026, sets the non-APM conversion factor at $32.84, a decrease from the current $33.42 in 2026. The reduction is driven largely by the expiration of the temporary payment increase provided by the One Hundred Nineteenth Congress Budget and Benefit Act (OBBBA). The public comment period closes September 14, 2026.
The size of the cut: The proposed conversion factor of $32.84 represents an approximate 1.7 percent decrease from the 2026 rate of $33.42 for non-APM participants.
Why it is happening: The temporary statutory payment increase that propped up the 2026 conversion factor is expiring, and Congress has not yet passed legislation to extend or replace it.
What you can do: Submit comments to CMS by September 14, 2026, review your APCM and care management billing to offset the cut, and model the revenue impact on your top CPT 99213 and 99214 claims now.
What the Proposed Rule Changes
The CMS CY 2027 Medicare Physician Fee Schedule proposed rule, published in the Federal Register on July 16, 2026, proposes a conversion factor of $32.84 for physicians who do not participate in a qualifying Advanced Alternative Payment Model (APM). For those who do participate in a qualifying APM, the proposed conversion factor is $33.17. Both figures are lower than the current 2026 conversion factor of $33.42.
The conversion factor is the dollar amount multiplied by the total relative value units (RVUs) assigned to each CPT code to determine Medicare reimbursement. When the conversion factor drops, every service line billed to Medicare pays less, even if the RVUs for your most common codes stay the same.
For a family medicine practice where 99213 and 99214 make up the majority of daily encounters, this is not a rounding error. A practice billing 40 established patient visits per day across two providers, predominantly at the 99213 and 99214 level, can model the annual revenue difference by multiplying total RVUs by the conversion factor change. Even a $0.58 per-RVU decrease compounds across thousands of claims per year.
The proposed rule also includes a request for information on redesigning primary care payment, specifically asking how CMS should reconsider primary care service valuation. That request signals that CMS recognizes the current payment structure undervalues primary care, but the 2027 rate cut arrives before any redesign can take effect.
Why Is Medicare Cutting Family Medicine Reimbursement in 2027?
The proposed decrease is not a targeted cut to family medicine. It is the result of a temporary legislative fix expiring. The One Hundred Nineteenth Congress Budget and Benefit Act provided a short-term conversion factor increase that boosted 2026 payments. That increase was always scheduled to expire, and Congress has not passed new legislation to extend it.
This is a pattern family medicine practices have experienced repeatedly. Temporary patches sustain payment rates for one or two years, then expire, and the baseline rate drops back. The result is that primary care reimbursement has not kept pace with inflation, practice costs, or the expanding scope of services family medicine delivers.
The proposed rule does include a +0.25 percent statutory update for non-APM participants and a +0.75 percent update for APM participants, plus an estimated +0.53 percent adjustment for proposed RVU changes. But these modest increases do not fully offset the loss of the temporary statutory boost, which is why the net conversion factor still declines.
One question we hear constantly from family medicine practice managers is why their Medicare revenue keeps fluctuating year to year despite stable patient volumes. The answer is almost always the conversion factor. It changes every January, and the temporary legislative patches make the swings even harder to predict.
Conversion Factor Comparison
| CY 2026 (Current) | CY 2027 (Proposed) | |
|---|---|---|
| Non-APM conversion factor | $33.42 | $32.84 (proposed) |
| APM conversion factor | $33.57 | $33.17 (proposed) |
| Change from prior year | +3.77% (from 2025) | Approx. -1.7% (from 2026) |
| Statutory update | Included OBBBA temporary increase | +0.25% (non-APM), +0.75% (APM) |
| Comment deadline | N/A (finalized) | September 14, 2026 |
A lower conversion factor means every claim pays less. If your billing team is not already maximizing APCM codes, G2211, and care management billing to offset the cut, a specialized family medicine billing partner can identify the revenue you are leaving on the table. Get matched with vetted billing companies that understand primary care reimbursement.
What Family Medicine Practices Should Do Now
The comment period closes September 14, 2026. The final rule is expected in November 2026 with an effective date of January 1, 2027. These steps prepare your practice for the change regardless of the final outcome.
1. Model the revenue impact on your top codes. Multiply your total RVUs for 99213, 99214, and 99215 by the proposed conversion factor of $32.84 and compare to your current reimbursement at $33.42. The difference is your projected annual revenue loss.
2. Submit a comment to CMS by September 14. CMS accepts comments from individual practices. AAFP and state medical associations publish sample comment language that practices can adapt. Volume of comments influences the final rule.
3. Verify you are billing APCM codes for eligible patients. The three APCM codes (G0556, G0557, G0558) provide monthly care management revenue that does not depend on the conversion factor in the same way E/M codes do. Many family medicine practices are leaving this revenue unclaimed.
4. Confirm G2211 is appended to every qualifying visit. The complexity add-on code G2211 adds reimbursement to qualifying E/M visits for longitudinal care. Practices that are not consistently billing G2211 are underreporting the work they already do.
5. Review your payer mix and contract terms. Medicare conversion factor changes affect Medicare FFS claims directly. Commercial payer contracts may or may not follow. Review your contracts to understand which payers adjust rates based on the Medicare fee schedule.
6. Evaluate whether outsourced billing recovers more than the cut costs. In our experience matching family medicine practices with billing partners, the practices that lose the most to conversion factor cuts are the ones that were already underbilling care management, G2211, and preventive services before the cut happened.
APCM as the Offset Strategy
Advanced Primary Care Management codes (G0556, G0557, G0558) were introduced in the CY 2025 PFS final rule specifically for primary care. They pay a monthly per-patient fee for care management services that family medicine practices already perform but often do not bill for. Unlike chronic care management (CCM), APCM is not time-based, which removes the documentation barrier that kept many family medicine practices from billing care management.
The CY 2027 proposed rule expands the APCM framework further by proposing optional behavioral health integration add-on codes that can be billed alongside the base APCM code in the same month. CMS is also seeking comments on whether to incorporate preventive services like annual wellness visits and depression screenings into the APCM bundle.
For a family medicine practice facing a 1.7 percent conversion factor cut, APCM billing represents the clearest path to replacing and potentially exceeding the lost revenue. A practice with 500 Medicare patients eligible for G0557 (the mid-tier code for patients with two or more chronic conditions) billing monthly can generate significant additional annual revenue that directly offsets the per-claim reduction from the lower conversion factor.
Providers often come to us after realizing their practice qualifies for APCM but has no workflow in place to capture it. The gap between eligibility and billing is where the most revenue sits unused in family medicine right now.
Common Misreadings of the Proposed Rule
The biggest mistake we see family medicine practice managers make is reading the proposed conversion factor and assuming it is final. It is not. The proposed rule is open to comment until September 14, 2026, and the final rule typically adjusts based on feedback. The 2026 final rule included changes from the proposed version, and the same is likely for 2027.
The second misreading is assuming the cut is unavoidable at the practice level. The conversion factor affects every Medicare claim equally, but practices that expand their billing into APCM, G2211, and behavioral health integration codes can grow total revenue even as the per-unit rate declines. The practices that treat the conversion factor as their only lever are the ones that lose the most.
Third, some practices confuse the statutory update (+0.25 percent for non-APM) with the total change. The statutory update is one component. The overall conversion factor also reflects budget neutrality adjustments, RVU redistributions, and the expiration of temporary increases. The net result is a decrease, not the small increase the statutory update alone would suggest.
Frequently Asked Questions
When does the 2027 conversion factor take effect?
If finalized as proposed, the new conversion factor takes effect January 1, 2027. The final rule is expected in November 2026. The current proposed rate of $32.84 for non-APM participants may change in the final rule based on public comments and any legislative action Congress takes before the end of 2026.
How much will family medicine reimbursement decrease in 2027?
The proposed non-APM conversion factor of $32.84 represents an approximate 1.7 percent decrease from the 2026 rate of $33.42. The actual dollar impact per practice depends on total Medicare volume, code mix, and whether the practice bills care management and complexity add-on codes that supplement E/M reimbursement.
Can I submit comments on the proposed rule?
Yes. CMS accepts public comments from individual practices, not just organizations. Comments are due September 14, 2026. The AAFP and state medical associations publish resources to help practices submit effective comments. CMS considers comment volume and specificity when finalizing the rule.
What is the APCM code and can family medicine bill it?
APCM stands for Advanced Primary Care Management. The three codes (G0556, G0557, G0558) pay a monthly per-patient fee for care management services. Family medicine, internal medicine, and geriatrics are the primary eligible specialties. The codes are not time-based, which simplifies documentation compared to chronic care management.
Does the conversion factor cut affect commercial payer rates too?
Not directly. The Medicare conversion factor applies only to Medicare fee-for-service claims. However, some commercial payers benchmark their fee schedules against Medicare rates. Review your commercial contracts to determine whether any payer adjusts rates automatically when the Medicare fee schedule changes.
Will Congress stop the cut before January 2027?
As of August 2026, no legislation has been passed to prevent or offset the proposed conversion factor decrease. Congress has a history of providing temporary fixes, but the timing and outcome of any legislative action for 2027 are not confirmed. Practices should plan for the proposed rate while monitoring legislative developments.
Next Steps
Model the revenue impact of the proposed $32.84 conversion factor on your practice’s top Medicare codes before the September 14 comment deadline.
If your practice is not billing APCM or G2211, start now. These codes represent the most direct offset to the proposed cut and do not require waiting for the final rule.
For practices that need help maximizing care management billing or navigating the 2027 fee schedule changes, get matched with a specialized family medicine billing partner.
The 2027 conversion factor cut does not have to mean lower revenue. Family medicine practices that bill APCM, G2211, and care management codes recover more than the cut costs. Get matched with vetted billing companies that specialize in family medicine and know how to capture every dollar your practice earns.
