Radiology Reimbursement in 2027: What the Proposed Medicare Fee Schedule Changes

How Does the 2027 Medicare Fee Schedule Affect Radiology Billing?

As of July 2026, the CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P) estimates a net positive impact of approximately +2% on total allowed charges for diagnostic radiology and nuclear medicine, and +3% for interventional radiology and radiation oncology. These gains are driven by practice expense methodology changes that more than offset the overall conversion factor reduction of 1.19% to 1.68%. The proposed rule also introduces three new diagnostic radiology quality measures and accepts updated RVU values for several imaging codes.

• Net positive for radiology: Despite the conversion factor cut, practice expense adjustments specific to imaging services produce an estimated +2% to +3% net increase in total allowed charges for most radiology subspecialties.
• New quality measures: CMS proposes three diagnostic radiology core measures covering exposure dose indices, patient exposure optimization, and appropriate follow-up imaging protocols.
• Billing accuracy becomes critical: The gap between the conversion factor cut and the PE-driven gains means the net result depends on correct site-of-service coding, modifier usage, and technical versus professional component billing.

What CMS Proposed for Radiology on July 14

On July 14, 2026, CMS published the CY 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P). The proposed rule includes the standard annual update to relative value units, conversion factors, and practice expense calculations that determine what Medicare pays for every radiology service.

The overall conversion factor would drop to $33.1693 for qualifying APM participants (down 1.19%) and $32.8409 for non-qualifying practitioners (down 1.68%). On the surface, that looks like a pay cut for everyone. But the radiology-specific story is different.

CMS’s proposed rule impact tables show an estimated combined effect of approximately +2% on total allowed charges for diagnostic radiology and nuclear medicine, and approximately +3% for interventional radiology and radiation oncology. The American College of Radiology’s initial summary noted that the practice expense changes appear positive for diagnostic radiology, particularly for nonfacility and technical services.

The proposed rule also accepts RUC-recommended values for fine needle aspiration codes, MRA of head and neck, and CT of upper extremity with new portable ultrasound equipment pricing. For practices billing these codes regularly, the accepted RVU values may translate to higher per-procedure payments in 2027.

Which Radiology Practices Benefit Most?

The +2% to +3% net positive impact does not distribute evenly across all radiology practices. The benefit concentrates in practices that bill a high volume of technical component and global imaging services, because the practice expense adjustments primarily affect the PE component of radiology RVUs.

Freestanding imaging centers and radiology groups that own their equipment and bill the technical component (modifier TC) or global service stand to gain the most. The PE methodology changes increase the practice expense RVU for equipment-intensive services, which is where radiology has always carried the bulk of its Medicare payment.

Hospital-based radiologists who bill only the professional component (modifier 26) will see less benefit from the PE changes, because the professional component carries a smaller PE share. These practices are more exposed to the raw conversion factor cut.

In our experience matching radiology practices with billing companies, the practices that leave the most revenue on the table are those that do not actively manage their TC versus 26 modifier split or that default to global billing when separate component billing would capture more. For a deeper look at how modifier selection affects reimbursement on common radiology codes, see our guide to CPT 71046 billing.

Why the Net Number Matters More Than the Conversion Factor

Every year when CMS publishes the proposed fee schedule, the headline number is the conversion factor change. In 2027, that headline is a cut of 1.19% to 1.68%. For most specialties, that number tells the financial story. For radiology, it does not.

Radiology is one of the most equipment-intensive specialties in medicine. The practice expense component of a radiology RVU includes the cost of imaging equipment, maintenance, technical staff, and supplies. When CMS adjusts the PE methodology, it redistributes payment toward or away from equipment-heavy specialties. In the CY 2027 proposed rule, the redistribution favors diagnostic radiology.

This is why the ACR’s initial analysis called the PE changes positive for radiology despite the conversion factor decline. The PE gains on technical services more than offset the conversion factor reduction for practices that bill a healthy mix of technical and global services. But a practice that fails to code correctly, bills the wrong component, or does not distinguish between facility and nonfacility rates will not capture those gains.

One question we hear constantly from radiology practice managers is whether the conversion factor cut means they should expect lower payments across the board. The answer for 2027 is no, but only if the billing is accurate. A radiology billing company that understands the PE component dynamics can model the specific impact on a practice’s code mix before January 1.

How to Prepare Your Radiology Billing for 2027

The proposed rule comment period closes September 14, 2026, and the final rule typically publishes in November. Radiology practices should start preparing now to capture the PE gains and avoid the coding errors that turn a net positive into a net negative:

1. Model the impact on your top 20 codes. Pull your most-billed radiology CPT codes and compare the proposed 2027 RVUs against the 2026 values. The CMS addenda files include the proposed work, PE, and malpractice RVUs for every code.
2. Verify your site-of-service coding. Facility versus nonfacility designation drives the PE payment. A freestanding imaging center that incorrectly codes as facility-based forfeits the higher nonfacility PE rate on every claim.
3. Audit your TC and 26 modifier usage. Ensure every claim reflects whether the practice owns the equipment (TC or global) or only interprets the images (26). Modifier errors on radiology claims are among the most common preventable denial causes.
4. Review the three new quality measures. CMS proposes diagnostic radiology core measures for exposure dose indices, patient exposure optimization, and appropriate follow-up imaging. Practices participating in MIPS should evaluate whether these measures require documentation workflow changes.
5. Check the Modifier 25 proposal. CMS proposes reducing payment when a separate E/M visit is billed on the same day as a procedure with a global period. Radiology practices that routinely bill an E/M visit alongside an imaging procedure should assess the revenue impact.
6. Submit a comment by September 14 if the proposals affect your practice. CMS reads every public comment. Radiology groups and imaging centers should weigh in on the PE methodology changes and the quality measure proposals.

Common Radiology Billing Errors That Erase PE Gains

The net positive impact CMS projects for radiology depends entirely on correct billing. The following errors are the ones most likely to erase the PE gains and turn a 2% increase into a net loss:

• Billing global when the practice only performs the interpretation. If a radiologist reads images from a hospital-owned scanner, the professional component (modifier 26) is the correct claim. Billing global or omitting the modifier means the claim includes a technical component the practice did not provide, which triggers a denial or a recoupment on audit.
• Defaulting to facility rates when the practice is freestanding. A freestanding imaging center’s nonfacility PE rate is significantly higher than the facility rate for the same code. If the place-of-service code indicates a facility setting incorrectly, Medicare pays the lower rate on every claim. Across a year of CT and MRI billing, that difference compounds into tens of thousands of dollars.
• Missing the multiple procedure payment reduction. When two or more imaging procedures are performed in the same session, Medicare applies a 50% reduction to the TC of the lower-valued procedures. A billing team that does not sequence the highest-valued procedure first, or that fails to account for the MPPR, will see unexpected payment adjustments and potential recoupments.

For practices that rely on a high volume of CT imaging, our CPT 74176 billing guide details the specific modifier and sequencing rules that affect CT abdomen and pelvis claims.

Impact by Radiology Subspecialty

The proposed rule does not affect all radiology subspecialties equally. Understanding where your practice falls on this spectrum determines whether the 2027 changes are a net gain or a net pressure point.

The key takeaway is that radiology practices billing technical services benefit most. Practices billing professional-component-only services see the conversion factor cut without the offsetting PE gains. For a review of the ACR’s guidelines on appropriate billing practices, the fundamentals of compliant radiology coding remain unchanged in 2027, but the financial consequences of errors have increased.

Frequently Asked Questions

Next Steps

• Download the CMS addenda files for the CY 2027 proposed rule and compare your top 20 codes against 2026 values.
• Audit your current TC, 26, and global modifier usage to ensure you are capturing the correct PE component on every claim.
• Request a free quote to compare radiology billing companies that specialize in imaging-specific coding, modifier management, and PE optimization.