What changed

Starting Jan. 1, 2027, Medicare will pay 80% of the fee schedule amount for the lower-paid line when an office/outpatient E/M visit billed with modifier 25 shares a date of service with a procedure that carries a 0-day global period, furnished by the same physician or a physician of the same specialty in the same group practice.

The higher-paid line, whether the visit or the procedure, is paid at 100%. CMS finalized the policy in the CY 2027 Physician Fee Schedule final rule released Nov. 4, 2026, after narrowing a July proposal that would have paid the lower-valued service at 50% and reached 10- and 90-day global procedures as well.

What you should know

Consider a four-podiatrist group whose administrator, on the afternoon of Nov. 4, had the CMS fact sheet open in one window and the group's 2026 budget in another. Her managing partner had already forwarded a LinkedIn chart putting the cut at $29,000 to $43,000 a year per podiatrist, with one question attached: what does this cost us?

Two things to know first:

1. It is not actually a change to modifier 25: The coding standard is unchanged: a significant, separately identifiable E/M service beyond the procedure's usual pre- and post-work. A visit that does not meet it was never separately payable and still is not.
2. It is not a cut to every modifier 25 claim: The final rule reaches only 0-day global procedures. Procedures with 10-day globals (most destructions, excisions and incision-and-drainage codes) and services with no global period (vaccine administration, EKGs, 96372 injections, diagnostic tests) outside it.

The reduction lands on top of a lower conversion factor: $32.63 for clinicians who are not qualifying APM participants (down 2.31% from $33.40) and $32.95 for qualifying participants (down 1.83% from $33.57).

How the reduction works

The rule is a payment adjustment applied at adjudication, not an edit that denies a line. Three conditions trigger it:

1. An office/outpatient E/M visit (99202–99215) is billed with modifier 25.
2. A procedure with a 0-day global period is billed for the same patient on the same date of service.
3. Both are furnished by the same physician, or by physicians of the same specialty in the same group practice. Visits furnished the same day by physicians of different specialties in the same group are not subject to the reduction.

Which line takes the cut depends on the fee schedule amounts, not on which service is “primary.” A 99213 (about $93 nationally at the 2027 conversion factor, before the 2027 practice expense changes) paired with a nail debridement (about $44) loses about $9 on the procedure; the same 99213 paired with a subcutaneous debridement (about $130) loses about $19 on the visit. Because the ranking is by locality-adjusted amount, pairs that sit within several percent of each other, such as 99213 and selective debridement 97597 (about $99), can flip from one locality to the next. A practice management system loaded with national rates will estimate those pairs wrong.

Consider the billing director at a 12-physician dermatology group who learned this by hand. He ran the group’s 10 most common same-day pairs through the formula expecting the visit to take the cut every time. On six of them the procedure was the lower line: a shave removal paired with a 99214 lost about $15 on the shave, not the visit. The expected-payment report he had drafted on the assumption that “modifier 25 cuts the E/M” would have been wrong on more than half the group’s affected volume.

Where the reduction applies and where it does not

The rule turns on one field in the CMS relative value file, the global surgery indicator. Only 000, a 0-day global, triggers the reduction. The lookup tool shows where common same-day pairings fall, by specialty or code.

Two readings fall out of the table. Primary care, cardiology, pulmonology, allergy and neurology practices bill modifier 25 constantly, and almost none of it is in scope: their same-day services are XXX or 010. Dermatology, otolaryngology, podiatry, OB-GYN, urology, pain management and wound care carry the exposure, which matches CMS' own estimate that dermatology, otolaryngology and podiatry take the largest hit.