On November 4, CMS released the CY 2027 Medicare Physician Fee Schedule (PFS) final rule, effective January 1, 2027. For orthopedic programs, three sections are most relevant: the revaluation of the primary total hip and total knee arthroplasty (THA/TKA) codes, a reshaped set of rules for remote therapeutic monitoring (RTM) and remote physiologic monitoring (RPM), and the sunsetting of traditional MIPS. While CMS stepped back from the steepest proposed cuts to joint replacement and gave practices more time on the most disruptive remote monitoring change, surgeon payments still fall drastically and the conditions for billing remote care are tightening.
Below is what CMS finalized, how it's different from the proposed rule, and what it means for orthopedic programs.
THA and TKA Reimbursement Cuts
In July, CMS had proposed lowering the work relative value units (RVUs) for primary THA (27130) from 19.11 to 15.37 and for primary TKA (27447) from 19.11 to 15.94, which would have been work RVU cuts of nearly 20% and 17% for hip and knee procedures, respectively. In the final rule, CMS instead adopted the AMA RUC's recommended work RVU of 16.70 for both codes. Though this is less severe than the proposed cuts, it is still a work RVU reduction of roughly 13%. CMS wrote that commenters persuaded it the proposed values “could significantly affect providers and create barriers to accessing care for Medicare patients,” but ultimately felt that the previous RVUs reflected outdated assumptions surrounding hip and knee care centered around an inpatient model, whereas most of these procedures are now done in outpatient settings. Total shoulder arthroplasty (23472) followed the same path: CMS finalized the RUC's 19.35 work RVUs, down from 21.58, instead of its initially proposed 17.49.
On top of this, the conversion factor–which is how much Medicare pays per RVU–also falls 2.31% for most clinicians, more than the 1.68% CMS had proposed. Most of the drop reflects the expiration of a one-year 2.5% statutory increase that applied in 2026; the additional decline versus the proposal is partly because restoring the arthroplasty RVUs had to be offset elsewhere under budget neutrality. Combined, the surgeon’s work payment for a primary THA or TKA drops roughly 15%.
Opposing commenters had made the argument that when patients go home within hours, the post-op surveillance work doesn’t disappear; it shifts to the surgeon's team, including wound monitoring by phone and portal, anticoagulation management, PT coordination, and complication triage. CMS responded that it does not believe the shift to outpatient care “has necessarily resulted in less work” but said the updated valuation already captures higher pre-service time and more complex post-op visits. It did not add payment for the pre-operative optimization work that commenters said falls outside the global package, a gap also highlighted in an October AAOS Now commentary.
How Surgeons Are Reacting
Online reactions from orthopedic surgeons were quick, and it was mostly frustration, with some calling for opting out of Medicare entirely. Some noted that, combined with the CY 2026 cuts, the reduction to surgeon payment for these procedures approaches 20% over two years. Others highlighted the widening gap in facility payment; with CMS finalizing a 2.3% increase for both hospital outpatient departments and ASCs in the CY 2027 OPPS/ASC final rule, several are viewing this recent reimbursement cut as a form of penalty for surgeons and teams who have successfully moved most of their patients toward lower cost sites, an efficiency gain that is now being used as justification for the surgeon pay cuts. Some commented that owning or partly owning ASCs may become an increasingly important source of revenue for orthopedic surgeons as current rates and ongoing cuts may become unsustainable.
Remote Monitoring: Three Proposals Finalized, One Delayed to 2029
CMS finalized three of its four proposed RPM and RTM changes for January 1, 2027 and delayed the fourth:
- Established patients only for RTM: CMS finalized its proposal that RTM, like RPM, must be limited only to already established patients. This means neither can be used as a first touch point.
- A required initiating visit: Overlapping with the above, billing for RPM or RTM can't begin until the practitioner furnishes a face-to-face visit, in person or via telehealth, where monitoring is discussed. This rule was added due to concerns surrounding patients being added into remote monitoring without prior clinical evaluation. For patients already receiving remote monitoring before January 1, 2027, a grandfathering rule applies, and those patients don’t need a new initiating visit.
- Revalued codes: CMS finalized lower practice expense inputs for the setup and device supply codes. Reductions of 20% or more are phased in, with no more than a 19% cut in a single year. CMS also reversed course on removing clinical staff inputs from the treatment management codes, agreeing that clinical staff are often involved. The AMA RUC will review practice expenses for all 19 RPM/RTM codes at its January 2027 meeting, so more changes are likely down the line.
- Direct-employment requirement delayed to 2029: As of January 1st, 2029, RPM and RTM can be billed only when the work is performed by clinical staff directly employed by the billing practitioner or practice, not by contracted third-party staff, and CMS will issue additional guidance on acceptable staffing arrangements before then.
CMS noted that these changes do “not prohibit working with vendors who do not supply third-party staff time, but supply software, devices, technical support, etc.” This means practices can still license technology platforms and get implementation support from outside partners, as long as the people doing the monitoring work belong to the practice.
Nonetheless, these updates represent significant changes to how remote monitoring will be deployed, particularly for organizations that have relied on outsourced remote monitoring models. At Force, our remote monitoring capabilities are designed to keep patients connected to their own surgical and care teams throughout their care journey. This model is designed to support these stricter billing requirements, with monitoring built into the care team’s own workflow, empowering care teams to focus more of their time and effort on patient care.
Sunsetting Traditional MIPS: Simplicity, Standardization, and PROs
The final rule also reshapes the Merit-based Incentive Payment System (MIPS) in ways that impact orthopedic care:
- Traditional MIPS is ending: CMS will sunset the traditional MIPS reporting option beginning with the 2031 performance period. Clinicians must move to MIPS Value Pathways (MVPs) or Advanced APMs by the end of 2030, two years later than CMS originally proposed. CMS estimates MVPs already apply to about 98% of clinicians.
- A core measure requirement starts in 2027: CMS replaced the requirement to report at least one outcome or high-priority measure with a requirement to report at least one designated MIPS core measure. Clinicians without an applicable core measure must attest to that, and small practices are exempt.
- The joint replacement MVP now has defined core measures: For the Improving Care for Lower Extremity Joint Repair MVP, which is the most relevant to orthopedic surgery, CMS designated three core measures, one of which must be reported: Q470 (Functional Status After Primary Total Knee Replacement, which is a patient-reported outcome measure), Q480 (Risk-Standardized Complication Rate Following Elective Primary THA and/or TKA, which is claims-based), and Q351 (Venous Thromboembolic and Cardiovascular Risk Evaluation).
Ultimately, beyond simplifying participation pathways and standardizing quality reporting options, this also represents a signal from CMS that patient-reported outcomes are increasingly part of how individual surgeons will be scored, not just hospitals. As MVPs become the main MIPS pathway, a PROM-based functional status measure (Q470) is now one of three core options for joint replacement surgeons reporting the Lower Extremity Joint Repair MVP, bringing them closer to how CMS measures hospital performance through initiatives like the THA/TKA PRO-PM, which affects performance in both TEAM and CJR-X.
Other Provisions Orthopedic Leaders Should Note
- Same-day E/M reductions (modifier 25): When an office/outpatient E/M visit is billed with a 0-day global procedure on the same day by the same physician (or a same-specialty physician in the same group), the lower-paid service will be paid at 80%. This was softened from the proposed 50% cut, which would also have impacted 10- and 90-day global procedures. In practice, this means that if an orthopedic clinic sees a patient for an office visit and does a joint injection on the same day, they will get a 20% reduction in the service that pays less, whereas in the past they would have been paid for both services in full.
- Global surgery under review: CMS paused the collection of CPT 99024 (a no-pay code used for tracking) but said its data show post-operative visits during global periods “are not occurring, yet providers are still being paid for these visits.” CMS also finalized several long-standing orthopedic codes, including large-joint arthrocentesis/injection (CPT 20610), as potentially misvalued. While commenters noted that this data is likely underreported given clinics don’t get a benefit from reporting it, this still signals that CMS may look to reduce pay for global surgical packages in future rulemaking by reducing or removing post-op visits.
- ASM gets updates ahead of launch: The mandatory model launches January 1, 2027, with orthopedic surgeons remaining in its low back pain cohort and payment adjustments of up to ±9%, rising to ±12% by the final year. For low back pain, CMS added a claims-based lumbar spine MRI measure and replaced the patient-reported Functional Status Change measure (Q220) with the process-based Functional Outcome Assessment (Q182). CMS also dropped a proposed 5-point bonus for voluntarily submitting PRO data, while signaling that PRO-PMs remain a long-term goal. Other changes include a 5-point rural scoring adjustment, new CMS authority to terminate participants for program-integrity or compliance reasons, and the option to attest to improvement activities at the group or individual level.
What This Final Rule Means for Orthopedic Programs
Orthopedic programs should start by planning for lower professional revenue per case. Even with the softer cut, surgeons will be paid less per joint while still doing the work that keeps patients safe at home, so programs need to make that between-visit work efficient rather than simply absorb it. In the near term, that means getting automated workflows and digital patient engagement ready for January, and if you rely on RTM/RPM, build the initiating visit and remote monitoring discussion into pre-op or discharge workflows, and document established-patient status, especially for new RTM patients.
Programs should also use the 2029 runway for RTM/RPM direct employment provisions wisely. Those that rely on contracted monitoring staff should map out now how that work will move to their own teams. CMS has made clear that technology partners remain an option, so pairing the care team with a platform that lets a small group of clinicians manage a large panel is a practical path forward. Finally, keep the full episode in view. With CJR-X beginning nationwide in 2028, the same capabilities that protect remote monitoring revenue, including early issue detection, patient engagement, and matched PROMs, will also protect episode performance.
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