2027 Medicare Fee Schedule: What the Proposed Rule Changes for Radiology Billing

How Does the 2027 PFS Proposed Rule Affect Radiology?

As of July 14, 2026, the CMS 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P) creates a mixed payment picture for radiology. The conversion factor decreases by 1.19 to 1.68 percent depending on APM status. A negative 2.5 percent efficiency adjustment applies to work RVUs for non-time-based services, which includes the majority of diagnostic imaging codes. However, proposed practice expense methodology changes that move indirect PE allocation to both work RVUs and clinical labor RVUs may benefit nonfacility and technical component billing for radiology, partially or fully offsetting the conversion factor and efficiency reductions depending on practice setting.

• The conversion factor is going down. CMS proposes $33.17 for qualifying APM participants and $32.84 for non-qualifying APM participants, down from the 2026 rates.
• The efficiency adjustment hits imaging codes. The negative 2.5 percent adjustment on non-time-based work RVUs applies to most radiology CPT codes.
• PE changes may help nonfacility radiology. The revised indirect PE allocation methodology could increase technical component and nonfacility payment for imaging services.

What CMS Proposed on July 14

CMS released the CY 2027 PFS proposed rule on July 14, 2026. For radiology, three provisions dominate the financial impact. The conversion factor decreases to $33.1693 for qualifying APM participants (down 1.19 percent from 2026) and $32.8409 for non-qualifying APM participants (down 1.68 percent). This is the per-RVU dollar amount that translates relative value units into actual payment, so a lower conversion factor reduces payment on every radiology code.

The efficiency adjustment is the second hit. CMS proposes continuing the negative 2.5 percent adjustment to work RVUs for all non-time-based services. Most diagnostic imaging codes, including CT scans, MRI, X-ray, and nuclear medicine, are classified as non-time-based. The adjustment reduces the work RVU component of each affected code, which compounds with the conversion factor decrease to produce a larger net payment reduction than either change alone.

The practice expense methodology revision is the third, and potentially offsetting, provision. CMS proposes allocating indirect practice expenses using both the work RVU and the clinical labor RVU for all services, instead of only using that dual allocation for services that can be reported with technical and professional components. The American College of Radiology noted that this change appears positive for diagnostic radiology, particularly for nonfacility and technical component services. An imaging lobbyist quoted by Radiology Business described the PE changes as potentially offsetting some of the negative conversion factor impact, depending on site of care.

How Does This Affect Different Radiology Settings?

The combined impact of the three provisions varies significantly by practice setting. This is the detail that the headline coverage misses and the one that matters most for revenue projections.

The Society of Interventional Radiology estimated an overall positive 3 percent total RVU impact for interventional radiology, with a 5 percent nonfacility gain and a 1 percent facility gain. Diagnostic radiology faces a more complex picture. The conversion factor and efficiency adjustment produce a net negative on work RVUs, but the PE methodology changes may add back enough nonfacility and technical value to offset part or all of the decrease. The net effect depends on each practice’s mix of facility versus nonfacility billing, professional-only versus global billing, and the specific codes that make up its volume.

Across the billing companies we vet for radiology practices, the ones that model these changes most effectively are the ones that run their fee schedule projections by code and by setting, not as a single aggregate number. A practice that bills 60 percent of its volume as nonfacility technical component will see a different 2027 outcome than a practice that bills 80 percent as professional component in a facility setting, even if they bill the same codes.

What Should Radiology Practices Do Before January 2027?

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

• Model the combined impact by code and setting. Do not rely on aggregate specialty-level estimates. Pull your top 20 CPT codes by volume and calculate the 2027 payment for each using the proposed conversion factor, the adjusted work RVUs, and the revised PE RVUs. Compare the result to your 2026 payments.
• Identify which codes are hit by the efficiency adjustment. The negative 2.5 percent applies to non-time-based services. Most diagnostic imaging codes fall into this category. Time-based services, including some interventional and consultation codes, are exempt.
• Evaluate your nonfacility versus facility billing mix. If the PE methodology changes benefit nonfacility billing, practices with a higher share of nonfacility or global billing may see a net gain on certain codes. Practices billing predominantly in facility settings will see less offset.
• Review the three new diagnostic radiology quality measures. CMS proposes exposure dose indices, patient exposure optimization, and appropriate follow-up imaging protocols as core radiology measures. Your billing and compliance teams need to understand the reporting requirements.
• Check whether RUC-recommended values for your codes were accepted. CMS proposes accepting RUC values for fine needle aspiration, MRA of head and neck, and CT of upper extremity with new portable ultrasound equipment pricing. If your practice bills these codes at volume, the RVU changes affect your 2027 revenue.
• Submit comments to CMS by September 14, 2026. The ACR and SIR are coordinating specialty comments. If the proposed changes affect your practice, contributing data through your specialty society or directly to CMS strengthens the comment record.

Mistakes That Cost Radiology Practices Revenue

Providers often come to us after a fee schedule change takes effect and their revenue drops more than expected. The same patterns repeat every year.

• Using the conversion factor decrease as the only metric. The conversion factor is one of three variables changing simultaneously. A practice that plans only for the 1.68 percent CF decrease and ignores the efficiency adjustment and PE changes will underestimate or overestimate its actual 2027 revenue depending on setting and code mix.
• Not updating fee schedules in the practice management system. When the final rule publishes in November, every payer fee schedule in your system needs to be updated before January 1. A billing team that waits until February to apply the new rates will mispost payments and misidentify underpayments for the first two months of the year.
• Ignoring the PE methodology impact on technical billing. The PE changes are complex, and many practices default to assuming “everything is going down.” For nonfacility radiology billing, that assumption may be wrong. The PE methodology revision specifically reallocates indirect costs in a way that may increase technical component payment on certain imaging codes. Missing this means underpricing your services or failing to capture a payment increase.
• Not checking the ACR guidelines and specialty society impact analyses. The ACR, SIR, and ASNC publish code-level impact analyses within weeks of the proposed rule. These analyses do the per-code modeling that most practices cannot do internally. In our experience matching radiology practices with billing partners, the practices that stay ahead of fee schedule changes are the ones whose billing company monitors these specialty analyses and applies the findings proactively.

Frequently Asked Questions

Next Steps

Start by pulling your top radiology CPT codes by volume and modeling the 2027 payment using the proposed conversion factor, adjusted work RVUs, and revised PE RVUs. That gives you a code-level revenue projection that accounts for all three changes simultaneously.

For practices that need a billing partner with experience navigating annual PFS changes, fee schedule updates, and radiology-specific PE methodology, Radiology Bill Co connects you with vetted billing companies that specialize in diagnostic imaging billing across all practice settings.