Most years, the physician fee schedule proposed rule is an incremental update a coding team notes and moves past. For orthopedics, the CY 2027 rule is not that. It takes direct aim at total joint replacement, at the office visit billed on the same day as a procedure, and at the global surgical package that sits underneath nearly every orthopedic operation.
CMS issued the calendar year 2027 Physician Fee Schedule proposed rule, CMS-1848-P, on July 14, 2026, and published it in the Federal Register on July 16, 2026. Total joint replacement is the financial backbone of most orthopedic practices, and this rule proposes to cut its work value. It also reduces payment for an office procedure billed with a same-day evaluation and management visit, and it moves the global surgical package closer to a full revaluation. Three separate proposals, one shared premise: CMS believes it is paying for visit work that is no longer happening as orthopedic surgery moves out of the hospital and into the outpatient setting. That premise is worth understanding before it becomes final policy.
Proposed Work RVU Reductions for Total Joint Arthroplasty
Begin with the codes that carry the most revenue. In April 2025, the Relative Value Scale Update Committee’s Relativity Assessment Workgroup flagged total shoulder, total hip, and total knee arthroplasty as site of service anomalies. Medicare data from 2021 through 2023 showed each procedure performed less than half the time in the inpatient setting, yet each code still carried inpatient hospital evaluation and management visits inside its 90-day global period. The committee surveyed the codes and recommended lower work values. CMS proposes to go further still, setting values below the committee’s recommendation on every one of these codes, citing reduced procedure time, the removal of inpatient visits that are no longer furnished, and the need to maintain relativity with other 90-day globals.
| CPT Code and Service | RUC Recommended | CMS Proposed |
|---|---|---|
| 23470 Shoulder hemiarthroplasty | 15.60 | 13.81 |
| 23472 Total shoulder arthroplasty | 19.35 | 17.49 |
| 27130 Total hip arthroplasty | 16.70 | 15.37 |
| 27447 Total knee arthroplasty | 16.70 | 15.94 |
CMS is careful to say the surgery itself has not become easier. Its argument is narrower and more structural. When a total joint replacement moves from the inpatient hospital to the outpatient setting, the inpatient hospital visits that were built into the 90-day global period are no longer furnished, and CMS concludes that the work value should decline to match. For total hip arthroplasty, it points to intraservice time falling from 377 minutes to 305 minutes, a 19 percent reduction. These four codes are among the highest-volume and highest-value services in orthopedics, so the proposed reductions carry meaningful financial weight. Every practice that performs total joints should model the proposed values against its own case volume and payer mix rather than rely on a national average.
The expert read is that this is a site-of-service story before it is a work-value story. These procedures were once routinely inpatient, and the global package was constructed to include inpatient visits. As the typical case shifted to the outpatient department and the ambulatory surgery center, the facility payment followed the patient into the outpatient and ASC payment systems, and CMS is using that same shift to justify removing the inpatient visits, and their associated work, from the physician’s global. The surgeon performs the same operation on the same patient and is paid less for the professional work, not because the work changed, but because the setting and the flow of Medicare dollars around it did. One further point deserves emphasis. Because the fee schedule is budget neutral, the value removed from arthroplasty is not returned to orthopedics. It is redistributed across all other physician services. Practices should understand these reductions for what they are, a structural repricing tied to where care is delivered.
Office Procedures Billed With a Same-Day Evaluation and Management Visit
The second proposal moves into the office, and it lands on a billing pattern orthopedic practices rely on every day. When a significant, separately identifiable E/M visit is performed on the same day as a procedure, it is reported by appending modifier 25, and that modifier is what allows the visit to be paid separately. CMS is now questioning whether both services should be paid in full. Its reasoning is that the pre-service and post-service visit work is already built into any procedure that carries a global period, so paying a full same-day E/M on top of the procedure pays twice for the same resources.
CMS therefore proposes to reduce payment when a separately identifiable office or outpatient E/M visit is furnished by the same physician, or a physician in the same group practice, on the same day as a 0-day, 10-day, or 90-day global procedure. The highest-paid service on that date, whether the procedure or the visit, is paid at 100 percent, and every other procedure or visit on that date is paid at 50 percent. The reduction mirrors the longstanding multiple procedure payment reduction already applied to second and subsequent same-day surgical procedures. CMS is seeking comment on whether a smaller reduction, such as 25 percent, would be more appropriate, and on whether the policy should extend to inpatient E/M visits.
The Scenario in an Orthopedic Office
Consider a new patient who presents with knee pain, receives a separately identifiable office E/M reported with modifier 25, and then has a same-day major joint arthrocentesis or injection reported with CPT code 20610, which carries a 0-day global period. Under the proposal, the higher-paid of the two services is paid in full and the other is cut by half. The same reduction reaches fracture care encounters, which typically carry a 90-day global period, when a separately identifiable E/M is furnished on the same day. CMS identifies orthopedic surgery and hand surgery among the specialties that would see a significant decrease from this proposal in combination with the practice expense change described below.
Orthopedic practices should not wait for a final rule to understand their exposure. The practical step is to run a report of same-day office E/M visits appended with modifier 25 that are paired with a 0-, 10-, or 90-day global procedure, quantify how often the pattern occurs, and model the revenue effect of the lower-paid line being reduced by half.
Global Surgical Packages Under Review
The same reasoning underlies both the arthroplasty reductions and the same-day E/M proposal, and it traces back to the global surgical package. A global bundles the pre-operative, intra-operative, and post-operative care of a procedure into a single payment, with the work of the post-operative visits crosswalked from E/M values into the procedure’s work RVUs. Because orthopedics is built on 90-day global services, how CMS values these bundles is not a peripheral issue for the specialty. It is central to how orthopedic work is paid.
For CY 2027, CMS proposes to pause the data collection required under the Medicare Access and CHIP Reauthorization Act, which was built on no-pay CPT code 99024, citing its accumulated findings and the reporting burden on practices. The agency cites earlier analysis indicating that only 4 percent of reviewed 10-day globals and 67 percent of reviewed 90-day globals had one or more post-operative visits during the global period. Alongside the pause, CMS is publishing a public use file that displays the imputed work RVUs for 10-day and 90-day post-operative visits and the work RVUs that would remain if those visits were removed from the bundle. CMS is not proposing to change global billing or payment across the board for CY 2027, but it is assembling the record to revalue the package in future rulemaking, and the arthroplasty proposals show how that reasoning is already being applied to specific codes.
The limits of that record deserve attention, because they bear directly on whether the data can support a national revaluation. As the rule states, the 99024 data collection has never been national. It applied only to practices with 10 or more practitioners, in nine states, and because 99024 carries no payment, even the practices in that cohort had little incentive to report every post-operative visit. The resulting finding that most post-operative visits are not occurring is therefore drawn from a sample that is geographically narrow, weighted toward large groups, and structurally prone to underreporting. A practice outside the nine reporting states, or below the practitioner threshold, was never part of the dataset at all, which means the public use file does not describe its post-operative reality. In the same section, CMS raises the possibility of requiring all providers to report CPT code 99024. Practices should read that as the more immediate risk, because a decision to revalue 90-day globals on the strength of the current limited data, or to expand mandatory reporting, would reach every orthopedic practice regardless of whether it has ever reported the code.
Compliance and Strategy Note
Post-operative documentation is now a strategic priority as much as a compliance one. For a practice in one of the nine reporting states that meets the practitioner threshold, complete and consistent 99024 reporting matters, because that data feeds the valuation directly. For every other practice, the priority is thorough documentation of each post-operative visit within the global period, so that the care actually furnished can be demonstrated if CMS expands mandatory 99024 reporting or revalues the package. In both cases, the strongest position a practice can take now is to document the post-operative reality of its own patients and to comment on the gap between that reality and the limited national sample CMS is relying on.
The Visit Complexity Add-On Becomes a Modifier
CMS proposes to convert HCPCS code G2211, the visit complexity add-on, from a separately reported add-on code into a modifier, referred to in the rule by the placeholder MOD1. Rather than submitting the add-on on its own claim line, a practice would append the modifier to the base office or outpatient E/M code. CMS proposes to value the modifier at 16 percent of the base E/M code, replacing the current flat add-on that raises a low-level visit by a larger percentage than a high-level visit. For CY 2027, CMS proposes to maintain the existing limitations on reporting this recognition with modifier 25, and it seeks comment on whether to allow it when an office E/M is performed on the same day as a 0-, 10-, or 90-day global procedure. Orthopedic practices that report the visit complexity add-on on their office E/M visits should prepare billing staff and claim edits for the shift from a separate line to a modifier on the base E/M code.
Other Updates Reaching Orthopedic Services
Removal of the Indirect Practice Cost Index From Practice Expense
CMS proposes to remove the steps of the practice expense methodology that rely on the Indirect Practice Cost Index, phased in over two years, applying half of the measured variation in the first year and removing it entirely in the second. In its impact discussion, CMS attributes significant decreases for orthopedic surgery and hand surgery, among other specialties, largely to the combination of the modifier 25 proposal and the IPCI removal, with the practice expense effect partly offset by a proposed practice expense stabilization adjustment. Orthopedic practices with a high volume of in-office procedures should assess this effect against their most frequently billed non-facility services.
Efficiency Adjustment on Procedural Codes
The efficiency adjustment finalized in the CY 2026 final rule continues to apply. It reduces work RVUs and intraservice time for non-time-based services by 2.5 percent on a three-year cycle, and it exempts time-based codes, telehealth-list services, and new codes. Because most orthopedic procedures are non-time-based, they fall within the scope of the adjustment. Coders reviewing new or revised orthopedic codes for 2027 should confirm which work RVUs already reflect the efficiency-adjusted value, since CMS has treated certain committee recommendations as though the adjustment were already applied.
The Conversion Factor, in Brief
For completeness, the conversion factor most orthopedic practices are paid on, the nonqualifying factor, is estimated at $32.8409 for CY 2027, which CMS characterizes as roughly a 1.68 percent reduction from the 2026 rate driven by the expiration of a one-time statutory increase. This applies across the schedule and is not specific to orthopedics. The code-level proposals above will matter more to most orthopedic practices than this uniform adjustment.
The Healthcare Inspired Perspective
Viewed together, these proposals share a single foundation, and it is site of service. Total joint replacement was once predominantly inpatient and is now predominantly outpatient and ASC. The facility payment followed the patient into those settings, and CMS is aligning the physician fee schedule with where the work now takes place. The arthroplasty reductions reflect that alignment, and so do the same-day E/M proposal and the pause in global data collection. Orthopedics is affected earlier and more directly than most specialties, because it depends heavily on 90-day globals and on high-volume office procedures. None of these proposals should be read as a routine technical adjustment. Taken as a whole, they represent a deliberate repricing of orthopedic work, and they warrant a considered, well-documented response.
CMS raises one concern directly, and it deserves a direct answer. A payment reduction on same-day services creates a financial incentive to bring the patient back on a separate day simply to preserve full payment. That is not a sound response. It adds an unnecessary visit and avoidable risk for a patient who could have been treated in a single encounter, and it does not serve care. The appropriate response also happens to be the one that protects the practice. Document each same-day E/M so the record itself establishes a significant, separately identifiable service. Apply modifier 25 with discipline. Document every post-operative visit within the global period. And submit a comment before September 14. A well-supported comment costs a few hours of effort. Silence risks a lasting reduction in the value of every joint replacement and every office procedure the practice performs.
What Orthopedic Practices Should Do Before September 14, 2026
- Model the arthroplasty reductions. Apply the proposed work RVUs for CPT codes 23470, 23472, 27130, and 27447 to your actual total joint volume and payer mix to quantify the revenue effect.
- Quantify same-day exposure. Run a report of office E/M visits appended with modifier 25 that are paired with a 0-, 10-, or 90-day global procedure on the same date, including arthrocentesis, injections, and fracture care, and model the 50 percent reduction on the lower-paid line.
- Tighten modifier 25 support. Confirm that documentation for every same-day E/M establishes a significant, separately identifiable service, because scrutiny on these claims will increase whether or not the reduction is finalized.
- Document post-operative care, and know your reporting status. If the practice is in one of the nine reporting states and meets the practitioner threshold, report CPT code 99024 completely. Every practice should document each post-operative visit thoroughly, both to prepare for possible universal 99024 reporting and to support a comment on the limits of the current national data.
- Prepare for the visit complexity modifier. Ready billing staff and claim edits for the shift of the visit complexity add-on from a separate line to a modifier valued at 16 percent of the base E/M code.
- Submit a comment. CMS is seeking input on the arthroplasty valuations, on the size of the same-day reduction, on extending it to inpatient E/M, and on global revaluation. Comments must be received by September 14, 2026, referencing file code CMS-1848-P.
Primary source. Centers for Medicare & Medicaid Services, “Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies,” CMS-1848-P, RIN 0938-AV82, Federal Register Vol. 91, No. 135 (July 16, 2026). Provisions summarized here include the proposed work RVUs for CPT codes 23470, 23472, 27130, and 27447, the same-day E/M and modifier 25 payment proposal, the global surgical package data collection pause, the proposed conversion of HCPCS code G2211 to a modifier, the proposed removal of the Indirect Practice Cost Index from the practice expense methodology, and the efficiency adjustment. Comments may be submitted electronically at the CY 2027 PFS docket, CMS-2026-2377.
This publication is provided by Healthcare Inspired LLC for educational purposes and reflects a proposed rule that remains subject to change through the public comment process and final rulemaking. It does not constitute legal, coding, or reimbursement advice for any specific claim or arrangement. Practices should verify final policy against the published final rule and consult qualified counsel where appropriate.