What are the 2027 Medicare payment changes for pediatric practices?
As of July 2026, the CMS calendar year 2027 Physician Fee Schedule proposed rule (CMS-1848-P) would cut the Medicare conversion factor by 1.19 to 1.68 percent and reduce payment to 50 percent on the lesser service when a modifier 25 E/M visit is billed the same day as a procedure with a global period. For pediatrics, that targets one of the highest-volume billing scenarios in the specialty. It is proposed, not final, with comments due September 14, 2026.
Same-day modifier 25 payment cut. CMS proposes paying the lesser service at 50 percent when a separately identifiable E/M visit is billed with modifier 25 alongside a 0, 10, or 90 day global procedure on the same date.
Conversion factor drops. The non-QP conversion factor would fall from $33.4009 to $32.8409, a 1.68 percent decrease driven by the expiration of the one-year 2.5 percent bump Congress provided for 2026.
Still a proposal. Nothing is final until the 2027 final rule, and the comment window closes September 14, 2026.
What CMS Proposed
On July 14, 2026, CMS released the CY 2027 Physician Fee Schedule proposed rule (CMS-1848-P). Per the CMS fact sheet, the rule proposes three changes that hit pediatric practices especially hard. First, the conversion factor would drop from $33.4009 to $32.8409 for non-QP providers and from $33.5675 to $33.1693 for QP providers, driven by the expiration of the one-year 2.5 percent statutory increase Congress enacted for 2026 under the Working Families Tax Cut legislation. Second, CMS proposes to reduce payment when a separately identifiable E/M visit with modifier 25 is furnished on the same day as a 0, 10, or 90 day global procedure, paying the lesser service at 50 percent. Third, the G2211 visit complexity add-on would transition from a standalone code to a 16 percent modifier on the underlying E/M visit. The comment period closes September 14, 2026.
| Proposed change | Current (2026) | Proposed (2027) |
|---|---|---|
| Conversion factor (non-QP) | $33.4009 | $32.8409 (minus 1.68%) |
| Conversion factor (QP) | $33.5675 | $33.1693 (minus 1.19%) |
| Same-day E/M + global procedure | Both paid in full with modifier 25 | Lesser service paid at 50% |
| G2211 visit complexity | Standalone add-on code | 16% modifier on the E/M |
| Status | In effect | Proposed, comments due Sept 14, 2026 |
Does This Affect Your Pediatric Practice?
If your practice bills same-day E/M visits with in-office procedures, the modifier 25 proposal affects you directly. Pediatric offices frequently perform procedures with 0 or 10 day global periods on the same day as a sick visit, including laceration repairs, incision and drainage, wart destruction, foreign body removal, and ear lavage. Under the proposal, when a level 3 or level 4 E/M visit is billed with modifier 25 alongside one of these procedures, the lesser service would be paid at 50 percent instead of the full rate.
One important nuance for pediatrics: the proposal targets E/M visits billed with procedures that carry a 0, 10, or 90 day global period. Preventive medicine codes such as the well-child visit (99392) carry an XXX global period, which means the global concept does not apply in the same way. Whether the same-day sick-plus-well visit modifier 25 scenario is directly hit depends on how CMS defines the scope in the final rule. Practices should not assume they are exempt until the final language is published.
The conversion factor cut, by contrast, hits every code. A 1.68 percent reduction across a high-volume pediatric E/M schedule, where each individual claim already carries a low dollar amount, compresses margins that were already tight. In our experience matching pediatric practices with billing partners, the practices that feel these cuts most are the ones with a heavy Medicaid mix, because Medicaid rates already sit below Medicare, and any downward pressure on the Medicare benchmark pulls commercial and managed-Medicaid negotiations down with it over time.
Why the Modifier 25 Cut Matters Most for Pediatrics
The modifier 25 same-day payment reduction is the single most consequential line item in this rule for a pediatric practice. CMS says the proposal addresses what it views as duplicative payment when the same physician provides an E/M service and a procedure with a global period on the same date, because the global period already includes a built-in E/M component. CMS proposed a similar change in the CY 2019 PFS proposed rule and did not finalize it at that time, but noted it continued to believe the current methodology overpays.
Pediatrics is more exposed to this than most specialties because same-day E/M-plus-procedure encounters are not edge cases, they are the daily workflow. A child comes in for a sick visit, the provider evaluates a laceration and repairs it, and the practice bills the E/M with modifier 25 plus the repair code. Under the proposal, the lesser of those two services would be paid at half. Multiply that across every same-day encounter in a busy pediatric office and the annual impact is substantial, even before the conversion factor cut is layered on.
Not sure how the 2027 proposals hit your specific pediatric case mix? A billing partner that models E/M, modifier 25, and procedure payment together can show you the real number before January. Get matched with vetted pediatric billing companies in about 30 minutes, free.
What Pediatric Practices Should Do Now
The rule is proposed, not final, but the practices that prepare now will not be caught flat in January.
- Pull your modifier 25 volume for the past year and separate E/M-plus-global-procedure claims from E/M-plus-preventive claims.
- Model the 50 percent reduction on your most common same-day procedure codes to see the annual revenue impact.
- Confirm which of your in-office procedures carry 0 or 10 day global periods, since those are the ones directly targeted.
- Review your G2211 utilization and model the transition from a flat add-on to a 16 percent modifier on the underlying E/M.
- Update your fee schedule projections using the proposed conversion factors ($32.8409 non-QP, $33.1693 QP).
- Submit a comment to CMS before September 14, 2026, if the modifier 25 reduction would affect your practice.
Common Misreadings of the Proposal
The first misreading is assuming the modifier 25 cut applies to every same-day sick-plus-well visit. The proposal targets E/M visits billed with procedures that have 0, 10, or 90 day global periods. Preventive medicine codes carry an XXX global period, so the standard well-child-plus-sick-visit pairing may not be directly affected, though commercial payers often follow Medicare’s lead. The second is treating the proposal as final. It is proposed, the comment window is open, and CMS did not finalize the same proposal in 2019. The third is ignoring the conversion factor cut because it looks small. A 1.68 percent decrease across thousands of claims per month compounds into real money, especially in a specialty where per-claim revenue is already low.
Across the billing companies we vet for pediatric practices, the practices that avoid surprises are the ones that model their own codes rather than reading the headline and moving on. For a practical framework on evaluating a billing partner who can run that analysis, see our guide on how to find the right pediatric billing service.
In-House vs a Pediatric Billing Partner
Whether to absorb a change like this in house or hand it to a billing partner comes down to whether your team can model the combined impact of a conversion factor cut, a modifier 25 payment reduction, and a G2211 modifier transition across your full payer mix before January. A single-provider practice with a sharp billing lead may run the analysis fine. A busy multi-provider group already juggling well-child coding, vaccine administration, same-day sick visits, and Medicaid prior authorizations often finds that modeling a three-part payment change is exactly the work that gets deferred until the revenue already moved.
Providers often come to us after a payment change has already cost them a quarter, not before, usually because the in-house team did not have the bandwidth to model it in time. A billing company with real pediatric experience treats the modifier 25 workflow, the G2211 add-on, and the fee schedule as a single picture, so a rate change becomes a modeling exercise instead of a January surprise.
Frequently Asked Questions
If finalized, the changes would apply to services on or after January 1, 2027. CMS released the proposed rule on July 14, 2026, and is accepting comments through September 14, 2026. The final rule usually arrives in the fall.
The proposal targets E/M visits billed with procedures that carry a 0, 10, or 90 day global period. Preventive medicine codes carry an XXX global period, so the standard well-child-plus-sick-visit pairing may not be directly hit. Confirm the scope in the final rule before assuming either way.
The non-QP conversion factor would fall from $33.4009 to $32.8409, a 1.68 percent decrease. The QP conversion factor would fall from $33.5675 to $33.1693, a 1.19 percent decrease. Both drops are driven by the expiration of the one-year 2.5 percent statutory increase from 2026.
CMS proposes converting G2211 from a standalone add-on code worth a flat payment to a modifier that adds 16 percent to the underlying E/M visit. For pediatric practices that bill G2211 on chronic conditions like asthma or ADHD, the dollar impact depends on the E/M level billed.
Yes. CMS proposed a similar same-day E/M payment reduction in the CY 2019 Physician Fee Schedule proposed rule and did not finalize it. The 2027 proposal revives the concept, and CMS noted in the rule that it continued to believe the current methodology overpays.
CMS accepts public comments on CMS-1848-P through September 14, 2026, with submission instructions in the proposed rule and on the Federal Register listing. Comments from practices that model a real payment impact on specific codes tend to carry more weight than general opposition.
Next Steps
Model your same-day modifier 25 volume against the proposed 50 percent reduction so you know your real exposure before the final rule.
If your practice bills G2211 for longitudinal care, model the flat-to-percentage transition on your most common E/M levels.
When you want to see how a billing partner would handle the 2027 changes across your full payer mix, we can connect you with a pediatric billing company in about 30 minutes.
The 2027 proposals reward pediatric practices that model their modifier 25, conversion factor, and G2211 exposure together and plan early. Pediatrician Billers matches your practice with vetted, specialty-experienced billing companies across all 50 states, with rates starting as low as 6 percent and a match in about 30 minutes. Getting matched is free to providers.
