CMS Proposes 2027 Medicare Pay Cuts: What It Means for Your Orthopedic Practice
- Jul 20
- 4 min read
On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) released its proposed Medicare Physician Fee Schedule for calendar year 2027 (CMS, CY2027 PFS Proposed Rule) — and it's already generating conversation across the orthopedic community. For practices with a substantial Medicare population, this proposal touches nearly every part of how care gets reimbursed, from in-office visits to outpatient surgical procedures.
The rule hasn't been finalized, and public comment is still open. But one thing is already clear: the practices that start planning now, rather than waiting to see how the final numbers land, will be in a much stronger position heading into 2027.
Here's what CMS has proposed so far, and what it means for how you run your practice.
1. Medicare Physician Payments Are Proposed to Decrease
This is the headline, and the one generating the most discussion. According to CMS, a temporary payment increase Congress enacted for 2026 — a 2.50% bump under the Working Families Tax Cut legislation — is set to expire. Unless Congress steps in again, CMS states that expiration alone represents roughly a 2.5% reduction in Medicare payment compared to this year.
Per the CMS fact sheet, the agency is proposing two separate conversion factors for 2027, as required by statute: one for physicians participating in qualifying Alternative Payment Models (APMs) and one for those who aren't. CMS's proposed qualifying-APM conversion factor would fall to $33.17 (a projected 1.19% decrease), while the non-qualifying conversion factor would fall to $32.84 (a projected 1.68% decrease).
For a practice billing a high volume of Medicare procedures, that difference compounds quickly across a full patient panel.
2. A Continued Push Toward Value-Based Care
Per CMS, the agency is proposing further changes to the Medicare Shared Savings Program, Alternative Payment Models, and quality reporting requirements — all part of a longer-running effort to reward coordinated, value-based care over traditional fee-for-service billing. Practices that participate in ACOs or APMs may see modifiers and incentives designed to reflect the additional coordination work involved in longitudinal patient care.
3. Proposed Updates to MIPS
The Merit-based Incentive Payment System is also on the table, with CMS signaling a longer-term intent to simplify or restructure parts of the current quality-reporting framework. For practices already stretched thin on administrative bandwidth, any changes to reporting requirements are worth watching closely as the rule moves toward finalization.
4. Outpatient and ASC Payment Updates
Alongside the physician fee schedule, CMS also released proposed updates to the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgery Center (ASC) payment rates. Because a significant share of orthopedic procedures are performed in outpatient and ASC settings, these updates can meaningfully influence how outpatient surgical care gets reimbursed — separate from, but related to, the physician fee schedule changes above.
Why This Matters for Orthopedic Practices Specifically
Orthopedic practices tend to carry a larger-than-average Medicare population, which means proposed reimbursement pressure lands harder here than in many other specialties. When physician payments tighten, most practices are left choosing among a familiar, and not particularly appealing, set of options:
Increase patient volume
Reduce overhead
Add ancillary services
Find new, non-Medicare-dependent sources of revenue
The problem is that the first option — seeing more patients — usually comes at a cost. Higher volume tends to mean longer wait times, more strain on staff, rushed appointments, and a patient experience that suffers even as the numbers on paper improve. That's a tradeoff most surgeons and practice administrators are understandably reluctant to make.
A Better Way to Respond: Strengthen Experience and Revenue at the Same Time
Instead of asking already-stretched teams to do more with less, a growing number of orthopedic practices are looking for ways to improve the patient experience and diversify practice revenue simultaneously — without adding staff, inventory, or administrative complexity to their day-to-day operations.
That's the problem the 365 Surgical Concierge Program was built to solve. Our hybrid concierge model gives surgeons a way to offer a more elevated, supported surgical experience while creating a meaningful new revenue stream, independent of Medicare reimbursement rates.
What Patients Actually Remember
Patients rarely judge their surgical experience by what happened in the operating room alone. They remember how prepared they felt beforehand, whether their questions were answered, the support they received during recovery, and the confidence they carried through the entire process. Our dedicated concierge team walks alongside patients from enrollment through recovery — providing education, answering questions, and serving as a steady resource exactly when patients need one most.
Less Administrative Burden on Your Team
Every orthopedic practice knows the volume of phone calls, portal messages, and routine questions that come with elective surgery. Our concierge team absorbs much of that workload as an extension of your practice, which frees your clinical staff to spend more time on patient care and less time fielding routine questions.
Revenue That Doesn't Depend on Reimbursement Rates
Practices that implement the 365 Surgical Concierge Program commonly generate an additional $100,000 to $300,000 in annual revenue — a number that holds steady regardless of what happens with the CY2027 conversion factor. It's revenue built on patient experience, not on billing codes.
Preparing for What's Ahead
No practice can control future Medicare reimbursement rates. But every practice can control how it prepares for them. As the CMS proposed rule moves toward finalization later this year, practices that have already invested in a stronger patient experience and a diversified revenue base will be in a far better position than those waiting to see how the numbers shake out.
With CMS continuing to put pressure on physician reimbursement, many practices are looking for ways to strengthen both the patient experience in healthcare and practice revenue at the same time. That's exactly what the 365 Surgical Concierge Program is designed to do — without adding operational burden to your staff.
Reference
Centers for Medicare & Medicaid Services. “Calendar Year (CY) 2027 Medicare Physician Fee Schedule Proposed Rule.” CMS Newsroom Fact Sheets, published July 14, 2026. cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule
This article summarizes CMS's proposed rule as of publication. The rule has not been finalized; figures and provisions are subject to change through the federal rulemaking process. This content is provided for informational purposes and does not constitute legal, financial, or billing/coding advice — practices should consult their own compliance and reimbursement advisors regarding how the final rule applies to them.
Ready to improve patient experience without adding to your workload?
365 Surgical partners with orthopedic surgeons to handle the non-clinical side of the surgical journey — proactive communication, coordination, and patient support that fits seamlessly alongside your existing practice.
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