What Is the 2027 Medicare Conversion Factor Cut?
As of August 2026, the CMS CY 2027 Physician Fee Schedule proposed rule (CMS-1848-P) includes a conversion factor reduction that would lower Medicare payments for nearly every service urgent care centers bill. The proposed non-APM conversion factor is $32.84, a 1.68% decrease from the 2026 rate of $33.40, driven primarily by the expiration of a temporary 2.5% congressional payment increase that applied to CY 2026 only. If finalized, the new rate takes effect January 1, 2027, and the comment period closes September 14, 2026.
Dollar impact per visit: On a 99213 visit reimbursed at approximately $111 in 2026, the proposed cut reduces payment by roughly $1.87 per visit. Across 40 Medicare visits per day, that compounds to over $19,000 in lost annual revenue per provider.
Why the cut is happening: Congress provided a one-time 2.5% conversion factor increase for 2026 through the One Big Beautiful Bill Act. That increase expires December 31, 2026, and current law does not include a replacement.
What to do now: Model the revenue impact on your top E/M codes, review your billing workflows for undercoding and missed charges, and submit a public comment to CMS before September 14, 2026 if the reduction threatens your practice.
How the 2027 Conversion Factor Was Calculated
The Medicare conversion factor is the dollar multiplier applied to relative value units (RVUs) to determine what Medicare pays for each service. Every E/M visit, procedure, and diagnostic test an urgent care center bills uses this single number as its pricing anchor. When the conversion factor drops, every line item on every claim pays less.
For CY 2027, CMS proposed two separate conversion factors. Physicians participating in qualifying alternative payment models (APMs) would receive a conversion factor of $33.17, a decrease of $0.40 or 1.19% from the 2026 APM rate of $33.57. Physicians not participating in qualifying APMs would receive $32.84, a decrease of $0.56 or 1.68% from $33.40. Most urgent care providers fall into the non-APM category.
The math behind the reduction includes three positive adjustments and one large negative one. The statutory MACRA update adds 0.25% for non-APM practitioners. Budget neutrality adjustments from work RVU changes add an estimated 0.53%. However, the temporary 2.5% statutory payment increase Congress provided for CY 2026 through Public Law 119-21 (the One Big Beautiful Bill Act) expires at year-end. That expiration alone more than wipes out the positive adjustments, resulting in the net decrease. CMS published the proposed rule on July 14, 2026, and the comment period closes September 14, 2026. The final rule is expected by November 2026.
Who Does the Conversion Factor Reduction Affect?
The conversion factor cut applies to every physician, nurse practitioner, physician assistant, and other qualified healthcare professional who bills Medicare Part B services. For urgent care centers, this means every E/M visit, every X-ray interpretation, every laceration repair, and every injection billed to Medicare pays less starting January 1, 2027 if the proposed rate is finalized.
Urgent care is disproportionately exposed to conversion factor changes because E/M visits make up the majority of claims. Unlike surgical specialties that rely on procedure-heavy code mixes with different RVU structures, urgent care revenue is concentrated in the 99202 through 99215 range. When the conversion factor drops by 1.68%, urgent care feels that reduction on nearly every claim rather than on a subset of higher-value procedures.
In our experience matching providers with billing partners, the practices that reach out after a fee schedule cut share a common pattern: they absorbed the initial revenue decline without adjusting their billing operations, and by the second or third quarter, the compounding effect of lower per-visit payments combined with unchanged overhead made outsourcing a financial necessity rather than a strategic choice. The providers who model the impact early and adjust proactively avoid that compounding problem.
Why Medicare Payments Keep Falling Behind Costs
The 2027 proposed cut is not an isolated event. It is the latest in a long series of conversion factor reductions or flat payments that have failed to keep pace with the Medicare Economic Index (MEI), which measures the actual cost of running a medical practice. According to the American Medical Association, Medicare physician payment has effectively declined by approximately 29% in inflation-adjusted dollars since 2001. The MEI accounts for staff wages, rent, malpractice insurance, medical supplies, and other practice expenses that have all risen substantially over the past two decades.
Congress has intervened with temporary patches in most recent years, typically in December spending legislation. The 2.5% increase for CY 2026 was one such patch. However, these patches create a cycle of uncertainty: practices cannot plan for the following year because they do not know whether Congress will act, and when the patch expires without a replacement, the resulting cut feels sudden even though it was structurally predictable.
For urgent care centers operating on margins that depend on volume, even a small per-visit reduction changes the financial math on staffing, lease renewals, and equipment purchases. The providers we connect with billing companies often tell us that the billing side of their operation is the first place they look to recover lost revenue, because clean claim rates and denial turnaround are the fastest levers available without reducing clinical staff. Practices that handle high volumes of after-hours visits billed under CPT 99051 feel the per-visit reduction even on extended-hour revenue that was already thin margin.
Tighter Medicare margins make every claim worth more. A billing partner matched to your volume, payer mix, and coding patterns can recover revenue you are leaving on the table today.
How Much Revenue Will a Typical Urgent Care Center Lose?
The revenue impact depends on your Medicare patient volume and your code mix, but the math is straightforward. The conversion factor is a multiplier, so the percentage reduction applies uniformly across all services. The table below models the per-visit and annual impact for the five most common urgent care E/M codes based on national Medicare non-facility rates.
| CPT Code | 2026 Rate (est.) | 2027 Proposed | Per-Visit Cut | Annual Loss (40/day) |
| 99202 | $74.00 | $72.76 | $1.24 | $12,896 |
| 99203 | $111.00 | $109.13 | $1.87 | $19,448 |
| 99213 | $111.00 | $109.13 | $1.87 | $19,448 |
| 99214 | $162.00 | $159.28 | $2.72 | $28,288 |
| 99215 | $223.00 | $219.25 | $3.75 | $39,000 |
Note: Estimates use approximate 2026 national non-facility Medicare rates and apply the proposed 1.68% reduction. Actual rates vary by geographic locality and GPCI adjustments. The “Annual Loss” column assumes 40 Medicare visits per day at that single code, five days per week, for 52 weeks. A blended code mix across all five levels would produce a different total, but the directional impact is clear: across a typical urgent care provider billing 30 to 50 Medicare E/M visits per day, the annual revenue reduction ranges from roughly $15,000 to $40,000 per provider before accounting for ancillary services.
What to Do Before the September 14, 2026 Deadline
The comment period for the CY 2027 PFS proposed rule closes September 14, 2026. Here is what urgent care practice managers should do now.
1. Model the revenue impact on your top E/M codes. Pull your Medicare claims data from the last 12 months, identify your five highest-volume CPT codes, and apply the 1.68% reduction to each. This gives you a baseline annual revenue loss figure to plan around.
2. Review your current clean claim rate. A 1.68% payment cut is permanent revenue loss. A 5% or 10% denial rate is recoverable revenue that your billing operation is already leaving behind. Fixing the denial rate offsets the conversion factor cut multiple times over.
3. Audit your charge capture for missed ancillary revenue. X-rays, labs, EKGs, nebulizer treatments, wound care supplies, and minor procedures performed alongside E/M visits represent revenue that urgent care centers routinely underbill. A billing partner with urgent care experience catches these consistently.
4. Check your modifier 25 documentation. CMS has also proposed a separate 50% payment reduction on same-day E/M visits billed with modifier 25 alongside procedures with global periods. If both provisions are finalized, the combined revenue hit is substantial. Review your modifier 25 workflows now.
5. Submit a public comment to CMS. Comments can be submitted electronically at regulations.gov under docket CMS-1848-P. CMS reads every comment, and provider-specific data about revenue impact carries weight in the final rule. The deadline is September 14, 2026.
6. Evaluate your billing operation against tighter margins. If you are billing in-house with a small team, model whether the per-claim cost of your current setup still makes financial sense under a lower conversion factor. Outsourced billing partners in the Billing Service Quotes network start at rates as low as 6%.
Common Misreadings of the Proposed Rule
The 1,592-page proposed rule contains dozens of provisions, and the conversion factor cut is easy to conflate with other changes. Here are the most common mistakes we see practice managers make when reading the news coverage.
Confusing the conversion factor cut with the modifier 25 reduction. The conversion factor cut is a flat percentage reduction applied to the dollar multiplier for every service. The proposed modifier 25 reduction is a separate 50% payment cut applied only when a same-day E/M visit is billed alongside a procedure with a global period. These are two independent provisions with different mitigation strategies.
Assuming Congress will patch it. Congress has provided late-year patches in most recent cycles, but there is no guarantee for 2027. The 2.5% increase for 2026 was part of a larger legislative package, and the political dynamics for a 2027 patch are not yet clear. Plan as if the proposed rate stands. If Congress acts, you adjust upward, which is the easy direction.
Treating the G2211 transition as a cut. CMS also proposes converting G2211 from a standalone add-on code to a modifier that increases the E/M base by 16%. This is a structural billing change, not a payment reduction. Practices that currently bill G2211 correctly should see comparable revenue under the new modifier. Our G2211 visit complexity analysis for urgent care explains the current rules and what the transition means.
Reading “proposed” as “final.” This is a proposed rule. CMS could narrow, delay, or modify the conversion factor in the final rule expected in November 2026. However, the structural driver of the cut, the expiration of the 2.5% temporary increase, is a matter of law, not rulemaking. Only new legislation can restore that portion.
In-House Billing vs. Outsourced Billing Under Tighter Margins
When Medicare reimbursement drops, the cost structure of your billing operation matters more than it did last year. An in-house billing team that costs a fixed amount per month regardless of clean claim rate performance becomes harder to justify when every claim is worth less. One question we hear constantly from practice managers after a fee schedule announcement is whether this is the right time to evaluate outsourcing.
The answer depends on your current performance metrics. If your denial rate is under 4%, your days in accounts receivable are under 35, and your charge capture is consistently catching ancillary services alongside E/M visits, your in-house operation may already be optimized enough to absorb the cut. If any of those numbers are off, the gap between what you are collecting and what you could be collecting likely exceeds the conversion factor reduction itself. Practices already navigating complex billing scenarios like emergency-level E/M visits under CPT 99281 know how quickly missed charges and documentation gaps erode margins.
Across the billing companies we vet for urgent care practices, the ones that specialize in walk-in environments consistently identify two revenue recovery areas that in-house teams miss: incomplete charge capture on ancillary services performed alongside the E/M visit, and insufficient modifier documentation that triggers avoidable denials. A billing company matched to your specific payer mix and claim volume can address both of those within the first 60 to 90 days.
The matching process through Billing Service Quotes is free for providers and takes as little as 30 minutes. A real person reviews your facility details, including your patient volume, payer mix, and existing EHR system, and introduces you to billing companies with direct urgent care experience. No algorithms. No pressure. No obligation to move forward.
Frequently Asked Questions
CMS proposed a CY 2027 conversion factor of $32.84 for non-qualifying APM practitioners and $33.17 for qualifying APM participants. These represent decreases of 1.68% and 1.19% respectively from the CY 2026 rates. The reductions are driven primarily by the expiration of a temporary 2.5% statutory payment increase that applied only to CY 2026.
The public comment period for the CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P) closes on September 14, 2026. Comments can be submitted electronically at regulations.gov. CMS typically publishes the final rule in November. Urgent care providers who want to influence the final outcome should submit comments with specific revenue impact data.
The conversion factor directly affects Medicare Part B payments only. However, many commercial payers use Medicare rates as benchmarks for their own fee schedules. A Medicare conversion factor reduction often signals downward pressure on commercial reimbursement in subsequent contract cycles, making it relevant even for practices with a low Medicare payer mix.
As of August 2026, no legislation has been introduced specifically to offset the CY 2027 conversion factor reduction. Congress has passed last-minute patches in most recent years, typically in December spending packages, but there is no guarantee. Practice managers should budget based on the proposed rate and treat any congressional action as upside.
The conversion factor reduction and the proposed modifier 25 same-day payment cut are two separate provisions in the same proposed rule. The conversion factor cut reduces the base dollar value of every Medicare service. The modifier 25 provision would additionally reduce payment by 50% on same-day E/M visits billed alongside global-period procedures. If both are finalized, practices billing modifier 25 on high volume face a combined revenue impact.
The fastest offset is improving your clean claim rate and charge capture accuracy. Denial prevention and complete ancillary charge capture on every visit typically recover more revenue than the conversion factor cut removes. A billing partner with urgent care expertise can audit your current claims data and identify specific recovery opportunities within the first 30 to 60 days.
Next Steps
Review your Medicare claims volume by CPT code and model the 2027 revenue impact using the proposed $32.84 conversion factor. If you have not already, read our coverage of the proposed modifier 25 payment cut for 2027 and the G2211 visit complexity changes for urgent care to understand the full scope of CY 2027 billing changes.
If tighter Medicare margins are pushing you to evaluate your billing operation, Billing Service Quotes connects urgent care facilities with billing companies matched to your volume, payer mix, and coding environment in as little as 30 minutes.
Do not wait for the final rule to protect your revenue. Get matched with a billing company that knows urgent care billing and can help you collect more on every claim starting today.
