If you operate on Medicare patients, 2027 is another year of being paid less for the same work. Here is what changed, why surgeons are pushing back, and what your real options are.
1. What Changed for 2027
The conversion factor went down, and further than proposed. When CMS released its proposed rule on July 14, 2026, it projected cuts of 1.68% for most physicians and 1.19% for qualifying APM participants. The final rule cut deeper. CMS says the main reason is that the one-time 2.5% increase Congress provided for 2026 has expired.
| Medicare conversion factor | 2026 | 2027 proposed | 2027 final |
|---|---|---|---|
| Most physicians (non-qualifying APM) | $33.40 | $32.84 (−1.68%) | $32.63 (−2.31%) |
| Qualifying APM participants | $33.57 | $33.17 (−1.19%) | $32.95 (−1.83%) |
What it looks like in dollars. As a simple illustration, a service valued at 10 total RVUs paid $334.00 at the 2026 rate and pays $326.30 at the 2027 rate, $7.70 less each time, before geographic adjustments. Multiply that across a year of cases and the loss is real, even though nothing about the operation changed.
For hip and knee replacement, the cut is far steeper. Lower work values for total joint arthroplasty, together with the conversion factor cut, take the full professional fee down about 17.5%.
| Medicare professional fee (qualifying APM participant) | 2026 rate | 2027 proposed | 2027 final | Change from 2026 |
|---|---|---|---|---|
| 27130 (Total Hip) | $1,167 | $934 | $964 | −17.4% |
| 27447 (Total Knee) | $1,165 | $931 | $962 | −17.5% |
For surgeons who are not qualifying APM participants, the drop is 17.8%. Figures as presented at the AAHKS 2026 Annual Meeting.
2. The Efficiency Adjustment, and Why Surgeons Disagree
CMS assumes surgery got faster. In its 2026 rule, CMS applied a 2.5% "efficiency adjustment" that lowers the work values and intraservice time of non-time-based services. Time-based services such as office visits are exempt. CMS listed surgical procedures and orthopaedic services among the services it believes can now be done more efficiently.
The data says otherwise. A study in the Journal of the American College of Surgeons analyzed more than 1.7 million operations across 249 procedure codes and 11 specialties. Operative times rose 3.1% between 2019 and 2023, 90% of procedure codes took the same time or longer, and patients grew more complex. The authors found no evidence of the efficiency gains the adjustment assumes.
Operations are taking longer, patients are more complex, and Medicare is paying as if the opposite were true.
In its September 2026 comments on the 2027 rule, the American College of Surgeons asked CMS to repeal the efficiency adjustment.
3. Same-Day Visits and the Global Surgery Package
A same-day visit now costs you 20%. When an office visit is billed on the same day as a 0-day global procedure, Medicare pays the higher-valued service in full and the other at 80%. CMS had proposed paying 50% and including 10-day and 90-day globals; the final rule is narrower, but the reduction is policy starting in 2027.
Watch the global period. CMS paused its global surgery data collection, stating that several years of data show post-operative visits in the global period "are not occurring." Read that as a signal: the way Medicare values global surgical packages is under scrutiny.
4. What This Means for Your Practice
Each change on its own looks small. Together they tell one story: Medicare's payment for surgical work keeps falling while the cost and complexity of doing that work keep rising. A practice built on Medicare volume has to run faster every year to stand still. That is why more surgeons are asking a question that used to sound radical: does my practice have to depend on Medicare at all?
5. Your Options, Honestly Compared
| Path | What you gain | What you give up |
|---|---|---|
| Stay in Medicare and optimize | Patient volume you already have; no change for patients | Exposure to every future cut and rule change |
| Medicare opt-out and private contracting | You set your own fees with Medicare patients, by private contract | Medicare pays nothing for your services, so patients pay you directly; it applies to all your Medicare patients, not some |
| Stay in Medicare and add a concierge package | You may be able to receive payment from both Medicare and the patient | You are still subject to every Medicare regulation, with many possible consequences if the concierge charges are not structured correctly |
None of these is right for every surgeon. Your specialty, your market and your patients decide what makes sense, and any move away from Medicare should be planned with a healthcare attorney and a financial adviser.
6. Guidance from Surgeons Who Have Done It
OptOutMD was built by doctors, for doctors. Orthopaedic surgeon Dr. Amanda Marshall-Rodriguez, who built and operates the independent practice TruOrtho, has teamed up with OptOutMD to help fellow surgeons understand the road to greater practice independence, and she brought that conversation to AAHKS 2026. Physicians should hear about these choices from physicians who have lived them.