Medicare 2026

Medicare Physician Payment Rates for 2027: What Happens When the One-Year 2.5% Increase Ends

Doctors who treat Medicare patients are paid under a national price list called the Medicare Physician Fee Schedule. The way that list is updated matters to everyone with Medicare, because it influences what clinicians are paid, how practices make staffing and scheduling decisions, and — over time — how easy it is to find a doctor who accepts Medicare. Heading into 2027, one piece of the formula is changing: a temporary 2.5 percent increase that applied only to 2026 is scheduled to end.

Here is a plain-English look at what that means, what has been proposed, and what has not yet been announced.

How doctors are paid under Medicare

Each service a clinician provides has a set of "relative value units" that reflect the work, practice expense, and malpractice costs involved. Those units are multiplied by a dollar amount called the conversion factor, then adjusted for geographic differences in costs. The result is the Medicare-approved amount for that service.

In Original Medicare in 2026, after you meet the $283 Part B deductible, you generally pay 20 percent of that Medicare-approved amount for doctor visits, as long as your doctor accepts assignment. Medicare pays the rest.

What changed for 2026 — and why 2027 looks different

The budget reconciliation law signed on July 4, 2025 (Public Law 119-21) added a 2.5 percent increase to physician fee schedule payments for services furnished on or after January 1, 2026, and before January 1, 2027. That increase was deliberately temporary — a one-year bump, not a permanent change.

In its 2026 final rule, issued October 31, 2025, CMS set the 2026 conversion factor at $33.57 for clinicians who qualify as participants in advanced alternative payment models (a 3.77 percent increase) and $33.40 for other clinicians (a 3.26 percent increase), up from $32.35. Those figures reflected statutory updates of 0.75 and 0.25 percent, the one-year 2.5 percent increase, and an estimated 0.49 percent adjustment tied to changes in work values.

For 2027, that 2.5 percent is scheduled to roll off. CMS issued its proposed 2027 physician fee schedule on July 14, 2026, published it in the Federal Register on July 16, 2026, and closed the public comment period on September 14, 2026. CMS's own fact sheet confirms that the 2026-only 2.5 percent increase will no longer be in effect for 2027. Under Section 1848(b)(1) of the Social Security Act, the Department of Health and Human Services must publish the final 2027 payment amounts by regulation before November 1, 2026.

Separately, Public Law 119-75 (enacted February 3, 2026) extended the 1.00 "work geographic index floor" — a provision that raises the work portion of payments in areas where labor costs are below the national average — through December 31, 2026. What happens to that floor after 2026 depends on further congressional action.

The Medicare Payment Advisory Commission, an independent group that advises Congress, recommended in its March 2026 report that Congress increase payment rates for physician and other health professional services for 2027 by 0.5 percentage points above what current law provides. That is a recommendation, not a law.

Will this affect your access to a doctor?

Payment policy changes can influence practice decisions, but it is worth putting access in context. In MedPAC's 2025 survey, 96 percent of Medicare beneficiaries age 65 and older reported having a primary care provider, compared with 92 percent of privately insured people ages 50 to 64. Among those who had received care in the past 12 months, 97 percent of Medicare beneficiaries were satisfied with their ability to find providers who accepted their insurance, versus 93 percent of privately insured people. If you have concerns about a specific doctor or specialist, it is reasonable to call ahead and confirm they still accept Medicare for 2027.

What is already set for 2027 on the patient side

• Part D out-of-pocket cap: $2,400 (up from $2,100 in 2026).
• Maximum Part D deductible any plan may charge: $700.
• Part D base beneficiary premium (used in the late-enrollment penalty calculation; actual plan premiums are set plan by plan): $41.33.
• Annual Enrollment Period: October 15 – December 7, 2026, with choices taking effect January 1, 2027.
• Social Security cost-of-living adjustment: 3.6 percent, announced October 14, 2026, for benefits payable beginning January 2027.

The 2027 Part B standard premium and deductible, and the 2027 IRMAA income-related brackets, have not been announced. CMS typically releases those figures in the fall. Avoid any source that quotes specific 2027 numbers for them before CMS does.

A note for people with Medicaid or Extra Help

Since 2025, people with Medicaid or Extra Help have a monthly Special Enrollment Period to move to Original Medicare with a stand-alone Part D plan, or to switch from one stand-alone Part D plan to another. Full-benefit dual-eligible individuals can also join an integrated Dual Eligible Special Needs Plan (D-SNP) in any month.

Thinking through coverage for 2027

Many people on Medicare choose between Original Medicare (often paired with a Medigap policy and a stand-alone Part D plan) and Medicare Advantage. Both are legitimate paths with trade-offs. Original Medicare with Medigap generally offers broad access to any provider who accepts Medicare and more predictable cost-sharing, usually with a separate drug plan premium. Medicare Advantage plans package medical and often drug coverage together, typically with provider networks and plan-specific rules, and may include extra benefits. The right fit depends on your doctors, your medications, your travel patterns, and your budget.

Where to go for official information

For personalized details and official updates, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227), available 24 hours a day, 7 days a week; TTY users can call 1-877-486-2048.

This article is for general education and is not affiliated with any government agency.