CMS Finalizes Policy to Reduce Payment for Same-Day Procedures and Services

The Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2027 Medicare Physician Fee Schedule final rule on November 4. The ruling finalized a policy that will reduce payment when certain procedures are performed on the same day as an office visit. The following AAO-HNS overview provides key details about how we believe this policy change will impact otolaryngology practices.

Questions? Contact the Academy’s Health Policy Team: healthpolicy@entnet.org.

What is the new policy?

Under the finalized policy, Medicare will reduce payment by 20% when certain procedures and services are provided to the same patient on the same day.

Specifically, when a separately identifiable office or outpatient (O/O) evaluation and management (E/M) visit is provided on the same day as a procedure with a zero-day global period, Medicare will pay the highest-valued service at 100% and reduce payment for all other eligible services by 20%. The policy applies when services are provided by the same physician or by physicians of the same specialty within the same group practice.

In response to the proposed policy, the Academy formed the Same Day Care Coalition, bringing together nearly 30 national physician and patient organizations. The Academy also launched ENTsCareForMedicare.org, with members sending 10,000+ messages to Congress and 1,200+ comments to CMS. Additionally, Academy leadership met with offices of the White House, CMS, and hundreds of congressional offices, including during an Academy-organized Capitol Hill advocacy day with physician members.

In the final rule, CMS:

Reduced its proposed 50% payment cut to 20%
Narrowed the policy to procedures with zero-day global periods, excluding procedures with 10- and 90-day global periods.
Limited the policy to services furnished by the same physician or physicians of the same specialty within the same group practice, excluding physicians from differing specialties.
Office/outpatient (O/O) evaluation and management (E/M) visits (CPT codes 99202-99205 and 99211-99215)
Procedures with a zero-day global period—meaning procedures that do not include bundled payment for follow-up care. Common otolaryngology examples include diagnostic nasal endoscopy (CPT 31231), cerumen removal (CPT 69210), and flexible laryngoscopy (CPT 31575).

The Academy remains opposed to the payment reduction and will continue advocating for its full elimination.

When does the new policy take effect?

These changes will be implemented on January 1, 2027.

How will otolaryngology practices be impacted?

CMS originally estimated that the policies contained in the proposed rule would reduce total allowed Medicare charges for otolaryngology by 9% overall. In the final rule, CMS projects the estimated impact for otolaryngologists will be –5%, including  –2% for otolaryngologists in the facility setting and –5% for otolaryngologists in the non-facility setting.

It is important to note that these estimates do not include the additional –2.31% decrease to the Medicare conversion factor, which is set at $32.63 for CY 2027 for those not qualifying under a Medicare Alternative Payment Model (most otolaryngologist-head and neck surgeons).

This fight is not over. The Academy is taking steps to demand full repeal.

Which ENT services will be affected?

The finalized policy applies only to:

Importantly, the policy does not apply to other E/M services (such as inpatient E/M visits), procedures with 10- or 90-day global periods, or same-day services rendered by physicians of different specialties within the same group practice.

How will the payment reduction be calculated?

Under the new policy, Medicare will pay 100% of the applicable Medicare payment rate for the highest-valued service and reduce payment for all other eligible same-day services by 20%.

For example: An established patient with chronic rhinosinusitis with nasal polyps and comorbid asthma presents with worsening symptoms, including purulent nasal drainage, wheezing, cough, and postnasal drip. The otolaryngologist performs a diagnostic nasal endoscopy (CPT 31231) to evaluate the nasal cavity and sinuses and guide treatment decisions. The physician also performs a separately identifiable E/M visit (CPT 99214) to assess the patient's asthma, allergies, infection status, medication needs, and ongoing treatment plan.

Under CY 2027 Medicare payment rates in the non-facility setting, the physician would receive approximately $182 for the nasal endoscopy and $131 for the E/M visit, totaling $314. The same visit in CY 2026 would have paid $329. Under the new policy, Medicare would pay the higher-valued service (the nasal endoscopy) in full but reduce payment for the lower-valued service (the E/M visit) by 20%, resulting in a combined payment of approximately $287. This represents an 8.4% reduction, or approximately $26, for the same encounter.

CPT Code	Procedure or Service	2027 Value	Payment Change	2027 Payment
31231	Dx Nasal Endoscopy	$182.39	0%	$182.39
99214-25	Established Patient E/M - Level 4	$131.17	–20%	$104.94
TOTAL ENCOUNTER		$313.56	-8.4%	$287.33

Will CMS reduce payment for the E/M visit, the procedure, or both?

The 20% reduction applies only to the lower-valued service(s), which may be either the E/M visit or the procedure(s), depending on their respective payment rates.

What evidence has CMS provided to justify this policy?

CMS continues to assert that separately identifiable E/M visits and procedures performed on the same day involve “overlapping” physician work and resources, resulting in “duplicative” Medicare payments. In the CMS news release, they refer to this as “duplicate billing.” However, CMS did not provide evidence in the final rule to demonstrate this overlap or substantiate a sweeping 20% cut.

Furthermore, in its justification for the policy, CMS relies heavily on external analysis, including from America’s Health Insurance Plans (AHIP), which has a financial interest in reducing reimbursement and could benefit from adopting similar payment reductions.

Does this change when Modifier 25 can be used?

No, the new policy does not impact the rules regarding appropriate use of Modifier 25. The Modifier should continue to be used when an E/M service is provided that is significant and separately identifiable from a procedure performed on the same day. For more information on proper coding using Modifier 25, click here to read the Academy’s CPT for ENT article.

Where can I find more information?

The AAO-HNS will continue to share updates through email and via ENTsCareForMedicare.org. For additional information, you can find the full regulatory text from CMS here (p. 391-406) and view CMS's Fact Sheet here.