Starting January 1, 2027, when a separately identifiable office or outpatient E/M visit is billed on the same day as a 0-day global procedure by the same physician or the same practice, Medicare pays the higher-valued service at 100% and the other at 80%.
Modifier 25 still gets the visit through the edit. It no longer gets it paid in full.
What CMS finalized
CMS proposed a 50% reduction that would have applied to 0-, 10- and 90-day global procedures. After comments it narrowed the policy twice: it applies only to 0-day globals, and the reduction is 20%, not 50%. CMS describes it as ending duplicate payment for work already built into the procedure’s value.
Separately, the 2027 conversion factor falls to $32.63 for clinicians who are not qualifying APM participants (down 2.31% from $33.40) and $32.95 for those who are (down 1.83%). The two changes stack.
Who feels it first
Any practice where a visit and a minor procedure routinely share a date: dermatology (biopsies, destructions), podiatry, orthopedics and primary care (joint and trigger-point injections), ENT, urology and GI office procedures. If modifier 25 appears on more than a small share of your E/M lines, this is a line item in your 2027 budget.
The part most practices will get backwards
The reduction lands on the lower-valued line, which is not always the E/M. A level 4 visit billed with a low-value 0-day procedure means the procedure takes the 20%. Practices that respond by down-coding or dropping the E/M are giving up 100% of a service to avoid losing 20% of the smaller one.
The second mistake is assuming commercial payers follow on January 1. Some will adopt it, some will not, and some already apply their own modifier 25 reductions. Check each contract before changing how you bill everyone.
Run this on your own claims
- Pull 12 months of Medicare claims where an office E/M with modifier 25 and a 0-day global code share a date of service and a billing TIN. Group by provider.
- For each pair, take 20% of the lower allowed amount. The total is your annual exposure before the conversion-factor cut.
- Read ten of the notes behind your highest-volume pair. If the E/M documentation only restates the reason for the procedure, the visit was already an audit risk; the new policy makes it a poor trade as well.
Find something and want it sized properly? Tell us and we will run the numbers with you. Find nothing? Good, and worth knowing before January.
When this is not the real problem
If your modifier 25 claims are already denying as CO-97, the 80% rule is not your issue; the bundling denial is. Fix that first.
Source: CMS, Calendar Year 2027 Medicare Physician Fee Schedule Final Rule fact sheet, November 4, 2026 (cms.gov). Confirm payer-specific policy before changing billing practice.