Physician organizations warn that the proposed Medicare reduction could disproportionately affect office-based procedural specialties and prompt additional patient visits, while CMS says current payments may duplicate resources.
Medicare would reduce payment for some evaluation and procedural services delivered during the same patient visit under a proposed 2027 policy that physician organizations say could strain medical practices and complicate patient access.
The proposal could affect physicians across multiple specialties. Available analyses indicate that dermatologists, otolaryngologists, podiatrists and other physicians who frequently perform office procedures face the greatest exposure. The policy could also encourage some practices to schedule evaluations and procedures on different days, requiring patients to make additional visits.
The Centers for Medicare & Medicaid Services included the policy in its proposed 2027 Medicare Physician Fee Schedule.
When a physician—or another physician in the same group—provides a separately identifiable office or outpatient evaluation and management service on the same day as a procedure with a 0-, 10-, or 90-day global period, Medicare would pay the highest-valued qualifying service at 100%. Medicare would reduce payment for every other qualifying service by 50%.
The proposal would not eliminate Modifier 25. Physicians would continue using the modifier to report a significant, separately identifiable E/M service. The documentation requirements would also remain unchanged. The proposal would change payment for qualifying services, not physicians’ ability to report them.
A Milliman analysis commissioned by the American Academy of Dermatology Association estimated that the policy would reduce Medicare fee-for-service allowed amounts by approximately $969 million, based on 2024 utilization. That amount represents approximately 1% of total Medicare Physician Fee Schedule allowed amounts.
The analysis identified dermatology as the specialty with the largest estimated dollar exposure, accounting for approximately $291 million of the modeled reduction. Milliman estimated that the proposal would reduce MPFS allowed amounts by approximately 7.3% for otolaryngology, 7% for dermatology, and 5.6% for podiatry. Orthopedic surgery, ophthalmology, urology, family medicine, and internal medicine would experience smaller effects.
Because the Physician Fee Schedule operates under budget neutrality, Medicare would generally redistribute the reductions through the fee schedule rather than retain the entire amount as program savings. The financial effects would therefore vary substantially among specialties.
Physician organizations also warn that the proposal could make same-day care financially difficult for some practices. A physician may evaluate a new or worsening condition, determine that a procedure is medically necessary,y and perform it during the same appointment.
If Medicare reduces payment for one of those services, some practices could respond by scheduling the procedure on another day. Patients could then face additional appointments, transportation costs, caregiver arrangements, and time away from work. Separate visits could also delay treatment, particularly for older adults, rural patients, people with mobility limitations, and patients who travel long distances for specialty care.
These outcomes remain potential consequences. The policy has not taken effect, and available sources do not establish how many physicians would change their scheduling practices or how many patients would experience delays.
CMS says physicians may use some of the same clinical and administrative resources when they provide an E/M service and a procedure during one encounter. The agency believes the current payment methodology likely duplicates payment for those overlapping resources.
The California Medical Association, American Medical Association, and other physician organizations dispute that reasoning. They argue that existing code-valuation methods already account for shared work and practice expenses. They also contend that CMS has not produced evidence showing that any remaining overlap warrants a uniform 50% reduction.
The organizations have urged CMS to address duplicated resources through its established code-specific review process instead of applying an across-the-board payment reduction.
The public-comment period closed September 14, 2026. CMS could finalize, modify, delay, or withdraw the policy when it issues the final 2027 Physician Fee Schedule.
If CMS adopts the proposal as written, the policy would take effect January 1, 2027. Physicians should monitor the final rule but should not change scheduling, coding, or documentation practices based solely on the proposal. Practices that regularly report Modifier 25 can review their same-day Medicare service patterns and prepare to evaluate the final policy’s operational effects.