A proposed rule from the Centers for Medicare and Medicaid Services would cut payment in half when a physician performs both an evaluation and a procedure during the same office visit. The change targets Modifier 25, the billing mechanism specialty practices use every day to bill a separately identifiable evaluation and management service alongside a same-day procedure. If finalized, it would take effect January 1, 2027.
The proposal, published in the CY 2027 Medicare Physician Fee Schedule on July 14, 2026, would pay the highest-valued service at 100 percent and reduce every other qualifying E/M visit or procedure furnished on the same day to 50 percent. It applies whenever an office or outpatient E/M visit is billed with a procedure carrying a 0-, 10-, or 90-day global surgery period. CMS has framed the change as a correction for what it calls duplicative payment for overlapping evaluation resources.
The practical effect reaches every specialty that routinely evaluates and treats a patient in one visit. Orthopedic surgeons who examine a knee and inject it. Pain management physicians who assess a patient and perform a nerve block. Wound care specialists who evaluate a chronic wound and debride it. Cardiologists who see a patient and perform a diagnostic procedure. In each case, the E/M payment or the procedure payment, whichever is lower, would be halved.
Key Takeaways
50 percent payment reduction for the lower-valued service when an E/M visit and a procedure are billed on the same day under Modifier 25. The most expensive service is paid at 100 percent. (CMS CY 2027 Physician Fee Schedule proposed rule, July 14, 2026.)
Specialty-level RVU impacts: orthopedic surgery faces an estimated 7 percent RVU reduction; ENT and dermatology each face approximately 9 percent. Combined with a 1.19 to 1.68 percent conversion factor decline, orthopedic practices could see an 8 to 9 percent total reduction in Medicare allowed charges.
AAO-HNS survey of 1,406 ENT physicians (released August 19, 2026): 80 percent say the cut could reduce seniors' access to care; 67 percent would need to see fewer Medicare patients; 14 percent would stop accepting Medicare entirely; 30 percent would need to reduce staff.
Comment period closes September 14, 2026. Approximately 20 medical specialty organizations have joined in opposing the proposal.
CMS has asked whether a 25 percent reduction would be more appropriate than 50 percent, signaling some openness to negotiation on the percentage, though the payment-reduction mechanism itself appears firm.
What Exactly Is CMS Proposing?
Under current rules, when a physician provides a separately identifiable E/M visit on the same day as a procedure, both services are paid in full, with the E/M visit billed using Modifier 25. CMS believes this results in duplicative payment because the global surgery package already includes a pre-procedure evaluation component. The proposed fix is blunt: pay the most expensive service at 100 percent and cut everything else on the same day to 50 percent.
The proposal applies to E/M visits billed alongside procedures with 0-day, 10-day, or 90-day global surgery periods. It does not distinguish between a brief check-in and a complex medical decision-making visit. If the E/M is separately identifiable and documented, the documentation quality does not change the 50 percent reduction. This is a payment policy change, not a documentation requirement change.
Which Specialties Are Hit Hardest?
Any specialty that routinely combines evaluation and procedural care in a single visit faces significant exposure. According to an analysis by Kovo RCM, the estimated specialty-level RVU reductions are approximately 9 percent for dermatology and ENT, and 7 percent for orthopedic surgery. For orthopedics specifically, office-based services face a 5 percent cut and facility-based services an 8 percent cut. When combined with the conversion factor decline from the expiration of the temporary 2.5 percent increase, orthopedic practices could see total Medicare allowed charges fall 8 to 9 percent.
Pain management, wound care, podiatry, and cardiology also rely heavily on same-day E/M plus procedure billing, though published RVU impact estimates for those specialties are not yet available. The common thread is that the more procedure-heavy and evaluation-intensive a specialty's workflow, the deeper this cut reaches.
What Are Physicians Saying?
The American Academy of Otolaryngology surveyed 1,406 ENT physicians and released the results on August 19, 2026. The findings are stark: 80 percent say the proposed cut could diminish elderly patients' access to specialty care, 67 percent would need to reduce the number of Medicare patients they see, 14 percent would stop accepting Medicare entirely, more than 84 percent say it could extend wait times and limit referral options, and 30 percent say they would need to cut staff.
The AAO-HNS and approximately 20 allied medical organizations contend that the existing payment framework already accounts for overlapping evaluation resources and that CMS has not documented genuine 50 percent duplication. They argue the proposal would force physicians to schedule separate visits for the evaluation and the procedure, adding cost and inconvenience for patients while not actually reducing Medicare spending.
What This Means for Your Practice
This proposed rule would change how money flows through every visit where your physicians evaluate and treat in the same encounter. If it takes effect, the revenue per visit drops for your highest-volume billing pattern. That makes everything else in your revenue cycle matter more: coding accuracy, modifier documentation, denial prevention, underpayment detection, and payer contract enforcement.
The comment period closes September 14, 2026. Whether or not the final rule lands at 50 percent, 25 percent, or somewhere else, the direction is clear: CMS is looking to reduce same-day E/M payments. Practices that understand their Modifier 25 utilization, know which procedures and payers generate the most same-day E/M revenue, and have clean documentation and coding will be best positioned to adapt.
This is the work Cosentus does for the specialties we serve, including orthopedics, wound care, pain management, anesthesia, behavioral health, cardiology, and ASCs. We audit coding accuracy, prevent and work denials, detect underpayments, and hold payer contracts to their terms. When a payment rule changes, disciplined RCM is how a practice protects the revenue it has earned.
Frequently Asked Questions
Is this rule final?
No. It is a proposed rule published July 14, 2026. The public comment period closes September 14, 2026. CMS will review comments before issuing a final rule, typically in late fall. Implementation, if finalized, would be January 1, 2027.
Does the 50 percent cut apply to every same-day visit?
It applies when an E/M visit is billed with Modifier 25 alongside a procedure with a 0-, 10-, or 90-day global surgery period. The most expensive service is paid at 100 percent; the other is paid at 50 percent.
Will commercial payers follow?
Some commercial payers already have their own Modifier 25 payment reduction policies. Whether additional payers adopt the CMS model depends on how the final rule is structured and how each payer's contracts reference Medicare rates.
Does better documentation prevent the cut?
No. The proposal is a payment policy change, not a documentation requirement. Even a perfectly documented, separately identifiable E/M visit would receive 50 percent payment. Documentation quality still matters for audit defense and denial prevention, but it does not override the proposed rate reduction.
What can a practice do right now?
Quantify how often your practice bills Modifier 25 with 0-, 10-, and 90-day global procedures. Identify which procedures and payers drive the most same-day E/M revenue. Model the financial impact using the 50 percent and 25 percent scenarios. Submit a comment to CMS before September 14. And make sure your broader revenue cycle, including denial rates, underpayment recovery, and payer contract compliance, is as tight as possible.
Talk to Cosentus
Payment rules are changing. What you can control is how much of every earned dollar your practice actually collects. Cosentus helps specialty practices and surgery centers capture, defend, and collect revenue as reimbursement rules shift. Talk to our team at cosentus.com/contact or call +1 (877) 266-9040.