The 2027 Medicare Fee Schedule Hits Podiatry Three Ways: What Your Billing Team Needs to Model

How Does the 2027 PFS Proposed Rule Affect Podiatry?

As of July 14, 2026, the CMS 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P) creates a triple payment reduction for podiatry practices. The conversion factor decreases by 1.19 to 1.68 percent. A negative 2.5 percent efficiency adjustment applies to work RVUs for non-time-based services, which includes most podiatric surgical codes. And CMS proposes reducing payment to 50 percent when an E/M visit with modifier 25 is billed on the same day as a procedure by the same provider. For podiatry, where the majority of visits involve an E/M plus a procedure, the combined effect of all three provisions is more significant than the headline conversion factor number suggests.

The conversion factor drops again.
CMS proposes $33.17 for APM participants and $32.84 for non-APM providers, down from 2026 rates.

The efficiency adjustment targets surgical codes.
The negative 2.5 percent on non-time-based work RVUs hits nail procedures, debridement, and most podiatric surgery codes.

Modifier 25 same-day visits face a 50 percent cut.
When an E/M is billed with modifier 25 alongside a procedure, all services except the highest-paid would be reduced to 50 percent payment.

What CMS Proposed on July 14

CMS released CMS-1848-P on July 14, 2026. ECG Management Consultants identified podiatry among the specialties projected to see a payment decrease, alongside dermatology, orthopedic surgery, and hand surgery. The American Podiatric Medical Association released a comprehensive update and is preparing comments by the September 14, 2026 deadline.

Three provisions converge on podiatry simultaneously. The conversion factor decreases to $33.1693 for qualifying APM participants (down 1.19 percent) and $32.8409 for non-qualifying APM providers (down 1.68 percent). The efficiency adjustment reduces work RVUs by 2.5 percent for all non-time-based services, which covers the vast majority of podiatric procedural codes including nail debridement, wound debridement, matrixectomy, hammertoe correction, and bunion surgery. And the modifier 25 proposal would reduce payment to 50 percent for any same-day E/M visit billed alongside a procedure with a global period, a workflow that describes a substantial share of all podiatric encounters.

CMS framed the modifier 25 provision as addressing what it considers duplicate payment for E/M resources already built into global surgical packages. The agency proposed a similar change in 2019 but did not finalize it. The reintroduction in the 2027 proposed rule signals that CMS intends to pursue this reduction.

Why Does This Hit Podiatry Harder Than Most Specialties?

Podiatry is uniquely exposed to the modifier 25 same-day reduction because of how podiatric care is structured. Unlike primary care, where most visits are E/M-only encounters, podiatric visits routinely involve both a medical evaluation and a procedure performed in the same visit. A patient presenting for a diabetic foot exam typically receives an E/M visit (the evaluation) plus a nail debridement, wound care, or other procedure. The E/M is billed with modifier 25 to indicate it was a separate and identifiable service from the procedure.

Across the billing companies we vet for podiatry practices, we consistently see modifier 25 on 50 to 70 percent of all podiatric claims. That is not overcoding. It reflects the clinical reality that podiatric visits almost always involve both evaluation and intervention. The CMS proposal to pay 50 percent on all but the highest-paid same-day service would reduce payment on the E/M component of these combined visits, which translates directly to lower per-visit revenue.

The efficiency adjustment compounds the problem. Podiatric surgical codes are non-time-based, which means the 2.5 percent work RVU reduction applies to nail procedures (11720, 11721, 11730), wound debridement (97597, 11042), matrixectomy (11750), and surgical procedures like bunionectomy (28296) and hammertoe correction (28285). When the efficiency reduction and the modifier 25 reduction are stacked on top of the conversion factor decrease, the per-visit revenue impact for a typical podiatry practice exceeds what any single provision would produce alone.

What Does This Mean for Podiatry Revenue?

The combined effect varies by code mix and modifier 25 usage rate. The table below models the impact on a common podiatric visit scenario.

Component	2026 Payment (Example)	Proposed 2027 Change	Net Effect
Conversion factor	$33.40 per RVU	-1.19% to -1.68%	-$0.40 to -$0.56 per RVU
Work RVU (surgical code)	Full work RVU	-2.5% efficiency adjustment	-2.5% on work RVU component
E/M with modifier 25 (same day)	100% of E/M rate	50% of E/M rate	-50% on the E/M portion
Combined visit (E/M + procedure)	Full E/M + full procedure	50% E/M + reduced procedure	Estimated 5-12% total visit reduction

One question we hear constantly from podiatry practice managers is whether the modifier 25 change will actually be finalized. CMS proposed the same reduction in 2019 and withdrew it after significant opposition. The APMA and other specialty societies are preparing comments opposing the proposal again. However, CMS reintroducing it signals continued intent, and practices that model their 2027 revenue without accounting for the possibility are taking a planning risk.

For practices evaluating strategies to maximize podiatry revenue, the 2027 rule changes make accurate code selection and documentation discipline more important than ever. Every dollar of legitimate reimbursement matters more when the per-visit payment is shrinking.

What Should Podiatry Practices Do Now?

The rule is proposed, not finalized. The comment period closes September 14, 2026. But preparation should start now.

1. Model the combined impact on your top 10 codes. Pull your highest-volume CPT codes, calculate the 2027 payment using the proposed CF, the adjusted work RVUs, and the 50 percent modifier 25 reduction where applicable. Compare to your 2026 payments.
2. Calculate your modifier 25 exposure. Determine what percentage of your claims include modifier 25 with a same-day procedure. Multiply that volume by the estimated per-visit reduction to get your total exposure.
3. Review your documentation for modifier 25 compliance. If CMS finalizes the 50 percent reduction, audit scrutiny on modifier 25 usage will increase. Make sure every modifier 25 claim documents a separately identifiable E/M service that would stand on its own without the procedure.
4. Evaluate whether your code selection is optimized. The highest-paid service on a same-day claim would still receive full payment. If your billing team is not selecting the correct E/M level for every visit, you may be leaving money on the table that is even more critical to capture under reduced payment rates.
5. Submit comments to CMS by September 14. The APMA is coordinating specialty comments. Individual practice data on the financial impact of the combined provisions strengthens the comment record and increases the chance of modification or withdrawal.
6. Talk to your billing company about 2027 fee schedule preparation. Your billing partner should be modeling these changes proactively and communicating the projected impact to you before the final rule publishes in November.

Mistakes That Increase the Revenue Impact

Providers often come to us after a fee schedule change takes effect and their revenue drops more than projected. These patterns make the impact worse.

• Not modeling the three provisions together. The CF decrease, the efficiency adjustment, and the modifier 25 reduction are separate provisions, but they compound on the same claims. A practice that plans for only one of the three underestimates its actual 2027 revenue change.
• Defaulting to lower E/M levels. Some podiatry practices routinely bill 99212 or 99213 to avoid modifier 25 scrutiny. If the documentation supports a 99214, billing a lower level sacrifices revenue that is already shrinking under the proposed changes.
• Not updating fee schedules in the practice management system after the final rule. When the final rule publishes in November, every payer fee schedule needs to be updated before January 1. A billing team that delays this update will mispost payments for weeks and miss underpayments during the transition.
• Ignoring the commercial payer ripple effect. Many commercial payers reference the Medicare fee schedule as a benchmark. If CMS reduces modifier 25 payment by 50 percent, commercial payers with Medicare-indexed contracts may follow. Check whether your commercial contracts are tied to the Medicare fee schedule and plan accordingly.

Frequently Asked Questions

Next Steps

• Start by calculating your modifier 25 usage rate and modeling the combined impact of all three provisions on your highest-volume codes. That gives you the revenue exposure number you need for 2027 planning.
• For practices that need a billing partner with podiatry-specific experience navigating annual fee schedule changes and modifier compliance, Podiatry Bill Co connects you with vetted billing companies that specialize in podiatry billing across all practice types and payer environments.