CY 2027 Final Rules and Your Wound Care Program: The Data That Sets 2028 Is Already Written
Monday morning, November 9. Mercy Hospital. Everytown, Kansas.
The frost hasn't quite melted off the parking lot. A thin silver glaze catches the low morning sun, casting long shadows across the brick facade of the east wing. Shift change is underway. Day-shift nurses step inside, passing a tired night tech on the way out. Elderly patients and their spouses trudge through the morning chill, their breath visible in the morning air. Near the emergency department entrance, a lone county ambulance idles with its lights off. Its latest patient is already inside.
Inside, the hospital is waking up. Somewhere down the hall, a dietary cart rattles across the tile. Outside William ‘Bill’ Merkle, CPA, CHFP's office window, the sound of a supply truck backing into the loading dock carries through the glass, its warning signal echoing through the morning.
Bill has read the headline three times, and it hasn't changed.
Medicare’s hospital outpatient rates go up 2.3% in 2027.
The coffee beside his keyboard has gone lukewarm. He reads it again anyway.
He has been a hospital CFO long enough to know that every headline is somebody else's summary of a spreadsheet. Two point three is the number in the press release. It is not the number on his claims.
So he waits for the sheet. Headlines are for reporters. The sheet is where the story actually lives. Decades in hospital finance has taught him that explanations arrive later than headlines.
It arrives at 9:40 from the revenue analyst down the hall. Printed. Stapled once in the corner. Still warm from the copier. Every wound care and hyperbaric code Mercy bills. The 2026 national rate in one column, 2027 in the next, the difference in green.
He runs a finger down it. Subcutaneous debridement, up 14.4%. Selective debridement, up 14.7%. Hyperbaric oxygen, up 12.5%. Skin substitute application, up 10.6%.
Not two point three. Somewhere between four and six times that.
Bill taps his calculator watch out of habit, a reflex older than most of the software his team uses on a daily basis.
The problem is that he has kept small hospitals open for decades by refusing one thing: good news he can't explain. Money that arrives without a reason tends to leave the same way.
He circles the debridement line twice.
In the margin, he writes one word: Why?
In thirty years of hospital finance, he has learned that unexpected gains deserve the same scrutiny as unexpected losses.
Why Wound Care Rates Rose Faster Than the Update
Bill has spent enough years around reimbursement reports to recognize a familiar pattern.
The number in the headline and the number on the spreadsheet are talking about the same thing, but they are not speaking the same language.
The headline says 2.3%. The spreadsheet says 14.4. Both are true. The difference is in what each number measures.
The trail starts with something most clinicians never think about, and most hospital finance teams think about constantly: the conversion factor.
The conversion factor is a dollar amount the Centers for Medicare & Medicaid Services (CMS) multiplies by a service’s Ambulatory Payment Classification (APC) relative weight to set its national payment rate under Medicare’s Hospital Outpatient Prospective Payment System (OPPS).
For calendar year (CY) 2027, the standard OPPS conversion factor increased from $91.415 to $99.970, a 9.36% increase.¹
That is considerably larger than the 2.3% update in the headline. The reason is that the conversion factor reflects more than the annual inflation adjustment alone.
If that sounds more like math than medicine, Bill would probably agree. Fortunately, the important takeaway is pretty straightforward.
The 2.3% figure represents Medicare's annual update process. It is not a direct prediction of how much every outpatient service will increase.
That update begins with a 3.2% hospital market basket increase and subtracts a 0.9 percentage point productivity adjustment.¹
The larger story, however, involves the 340B drug payment adjustment.
CMS finalized payment for separately payable drugs acquired through the 340B program at average sales price (ASP) minus 28%, replacing the previous ASP plus 6% payment methodology.¹ Because the change must remain budget neutral, those dollars cannot simply disappear. Instead, CMS redistributed them across non-drug outpatient services.
The result is a 7.5% increase to non-drug outpatient payment rates.¹
That is the transfer Bill is beginning to see on his spreadsheet. The 2.3% update is the annual adjustment and the 7.5% is the redistribution associated with the 340B drug payment change. Together, with other budget-neutrality adjustments, they produce the 2027 $99.970 standard conversion factor.
Which is why the numbers in front of him look nothing like the headline he read over lukewarm coffee earlier this morning.
But not every hospital gets to keep the entire increase, because there is another figure buried deeper in the rule.
CMS is also accelerating recovery of approximately $7.8 billion in additional non-drug payments made between 2018 and 2022 under the earlier 340B payment policy. The existing annual reduction increased from 0.5% in CY 2026 to 2% in CY 2027. It applies to eligible non-drug services at hospitals enrolled in Medicare before January 2, 2018, regardless of whether they participate in the 340B program. Hospitals enrolled on or after that date are exempt. CMS estimates the recovery will be completed in CY 2031.¹
Mercy has been enrolled in Medicare for decades, which means the adjustment applies.
Bill makes a note in the margin: The transfer giveth. The remedy adjustment taketh away.
Not entirely, but enough that the distinction matters. The two adjustments address different parts of the same policy.
Every APC carries its own relative weight, while the conversion factor determines the value of the dollar. The APC weight determines how many of those dollars a specific service receives. CMS recalculates those weights annually using hospital claims and cost-report data.
For CY 2027, the relative weight for APC 5052, which includes subcutaneous debridement, increased from 4.5432 to 4.7523, approximately 4.6%. APC 5051, which includes selective debridement, increased approximately 4.9%. The weight for APC 5054, used for large-area skin substitute application, moved in the opposite direction, falling approximately 2.1%.²,³
Now the differences on Bill’s spreadsheet begin to make sense. Each service receives the same underlying conversion factor and carries a different APC weight. The result is that payment rates do not move together. They move according to the data beneath them.
His spreadsheet is not showing a uniform increase. It’s showing a redistribution.
Service | Code | APC | CY 2026 | CY 2027 | Change |
Debridement, subcutaneous, first 20 sq cm | 11042 | 5052 | $415.32 | $475.09 | +14.4% |
Debridement, selective, first 20 sq cm | 97597 | 5051 | $204.98 | $235.04 | +14.7% |
Skin substitute application, up to 100 sq cm | 15271 | 5053 | $755.08 | $835.00 | +10.6% |
Skin substitute application, 100 sq cm or more | 15273 | 5054 | $2,107.97 | $2,257.84 | +7.1% |
Hyperbaric oxygen, per 30 minutes | G0277 | 5061 | $140.59 | $158.16 | +12.5% |
Hospital outpatient clinic visit | G0463 | 5012 | $136.02 | $146.10 | +7.4% |
National unadjusted payment rates. CY 2026 and CY 2027 rates are from the respective CMS OPPS Addendum B payment files.²,³ Actual hospital payments also reflect applicable adjustments, including the local wage index.²
The pattern is easier to see once the numbers sit side by side.
Some services increase by more than 14 percent. Others rise by roughly half that amount. The difference isn't random. It's the methodology.
For Mercy, the 340B remedy adjustment changes the comparison again. The 2027 Addendum B specifies a 0.9804 adjustment ratio for the affected hospitals and applicable services.² Applied to the $475.09 national rate for subcutaneous debridement, that produces a remedy-adjusted rate of $465.78.
The comparable CY 2026 rate also carried an adjustment, at 0.9951.³ Applied to $415.32, it produces $413.28. The resulting increase for Mercy is approximately 12.7%, before its local wage adjustment.
Bill looks at the two figures again.
The headline said 2.3%.
The red circle around Why? catches his eye. The answer is clear now.
Beneath it, he writes: Transfer. Not a raise.
What Didn't Move, and Why It Matters Most
One line on the sheet isn't green and Bill spots it immediately.
Sheet-form skin substitutes remain at $127.14 per square centimeter for CY 2027, unchanged from CY 2026 and consistent across all three U.S. Food and Drug Administration (FDA) regulatory categories.¹ The application procedures went up. The product rate didn't.
CMS explained that it was "premature to adjust the payment rate" before updated use patterns are available.¹ Changing the rate now, before the effects of the 2026 policy show up in the CY 2026 claims that will be used for CY 2028 rulemaking, "could result in payment disruptions or introduce unnecessary volatility."¹
Future updates will be based on average sales price data, not a general inflation index.¹
Bill reads the paragraph twice. Not because it is complicated, but because it says something the headline doesn't.
The rate didn't stay flat because CMS concluded that $127.14 was the right price. It stayed flat because CMS concluded it didn't yet have enough information to justify changing it.
Which means the next rate isn't waiting on a formula. It's waiting on claims.
Claims documenting skin substitute use across hospital outpatient programs will contribute to the evidence CMS says it needs before revisiting the payment rate. CMS also stated that it does not yet have enough information to draw reliable conclusions regarding access or appropriate utilization and will continue monitoring claims as they become available.¹
Somewhere inside those claims is the answer CMS is looking for.
Every claim adds another piece of evidence. The only question is whether providers realize what that evidence will help determine.
Non-sheet products
Gels, powders, liquids, and other products not supplied as sheets remain packaged under the OPPS. Their product cost is included in the application payment. CMS explained that these products aren't “manufactured, applied, or measured in the same standardized manner” as sheet products.¹
The application itself is a different matter. CMS assigned the new non-sheet application codes G0681 and G0683 to separately payable APCs 5053 and 5054, respectively.¹ Check the January quarterly update for the applicable code and payment status before billing.
Deep wounds
Commenters asked CMS for guidance on billing product for deep wounds, where the amount needed may exceed the wound's surface area. CMS declined to establish a different measurement method. Providers are expected to “report the units of product that correspond to the total wound surface area treated,” the same expectation that applied before 2026.¹
For product billing, that puts the weight on one measurement: the documented wound surface area.
Bill leans back in his chair.
The application rates changed.
The sheet-product rate didn't.
The non-sheet products remain packaged.
The measurement standard for deep wounds remains unchanged.
None of those decisions happened by accident. Each reflects information CMS believes it has, lacks, or is still trying to verify.
He glances at the calendar in the corner of his computer screen. November.
Most of 2026 has already been billed. The claims still being submitted and processed will add to the record CMS uses to evaluate the policy taking shape for 2028.
Bill looks back at the spreadsheet.
The question isn't just what CMS will do with that data. It's whether anyone at Mercy knows what its own records are saying.
Down the Hall: The Same-Day Visit Question
The coding office is at the end of the administrative wing, past the copier nobody fixes and the bulletin board covered in retirement announcements and fundraisers. Barb Vance, who has run the health information management (HIM) department for decades and knows every modifier code by heart, has the physician fee schedule open on one monitor, a coding bulletin on the other and three pages of highlighted notes spread across her desk.
"Do we start scheduling the visit on a different day?"
Bill sits down. He has heard versions of the question all morning. Whenever reimbursement changes, someone's first instinct is usually to shuffle patient appointments around.
The Medicare Physician Fee Schedule (PFS) final rule changes how a common wound clinic encounter is paid.⁴ When an office or outpatient evaluation and management (E/M) visit is billed on the same day as a procedure with a 0-day global period, by the same practitioner or another practitioner of the same specialty in the same group, Medicare pays the highest-valued service in full and reduces payment for the other eligible service or services by 20%.⁴
In wound care, 0-day procedures are everyday work. A debridement (11042–11044, 97597), a skin substitute application (15271–15277), or a compression wrap (29580, 29581) may all be performed during an encounter that also includes a separately identifiable E/M visit.⁵
The reduction applies to the practitioner's claim under the PFS. The hospital's own facility claim, paid under the OPPS, isn't part of it. The rule draws no distinction between office and hospital outpatient settings.⁴ Mercy also employs Dr. Wayne Kincaid, the wound center’s medical director, so the professional fee is Bill's problem too.
The answer to the question on the second monitor is in the same rule.
CMS states that the policy "does not prohibit same-day procedures."⁴ It says bringing patients back on another day for their procedure "would actually increase beneficiary cost-sharing," because the patient pays coinsurance on a second visit.⁴ And it names the tools it will use to watch for exactly that pattern: claims edits, comparative billing reports and medical review.⁴
Nothing about the documentation standard changed, either. A same-day E/M still has to be significant and separately identifiable from the procedure, reported with modifier -25.⁴ The rule changed what that visit pays, not what it has to prove.
Bill says it out loud, mostly to himself. "Same visit. Same note. One line pays less."
"So we don't move anything," Barb says.
"We don't move anything. We make sure the note would hold up if somebody pulled it."
Barb nods once and closes the rule. The answer wasn't a different appointment. It was a better reason for the visit.
The Data That Sets 2028 Is Mostly Written
Back in his office, Bill starts a list. Not for 2027. For the year after.
A review won't rewrite 2026. It simply tells a wound program what stories its claims have already been telling all year.
The list is short. Each item connects to a payment rule, a measurement expectation, or a pattern CMS says it intends to monitor:
Skin substitute units against documented wound area. On each application, do the units billed match the wound surface area recorded in the note? CMS just restated that expectation and declined to change it.¹
Product, code and unit agree. The product billed is the product documented, in the unit its code describes. Sheet products are billed per square centimeter; non-sheet products are packaged.¹
Same-day E/M notes stand on their own. Pull a sample of 2026 visits billed with modifier -25 alongside a 0-day procedure. Does each note show an evaluation that is significant and separately identifiable from the procedure?⁴
A same-day baseline. How often does an E/M share a day with a 0-day wound procedure today? If that pattern shifts in 2027, the program should be able to explain why in clinical terms.⁴
The 2027 rates, adjusted for the hospital. Start with the national payment rate, apply the hospital's applicable wage adjustment, and account for the 340B remedy adjustment where applicable.¹,²
None of these items require a new system. They require someone to look, because for most wound programs the data already exists.
By November, most of the work that will influence 2028 has already happened and the remaining claims will add to the record. The advantage belongs to the organizations that have read their data before CMS asks.
The Rest of the CY 2027 Changes
With the list done Bill slides the paper aside. Most of what matters to Mercy is already on it.
A few more changes are worth noting. Some affect reimbursement directly. Others answer questions wound programs are likely to encounter as the new codes and payment rules take effect.
UltraMIST (97610) Is Now Separately Payable
One item gets a checkmark from Bill immediately. Under the OPPS, low-frequency non-contact ultrasound moves to status indicator T, APC 5051, at $235.04.² CMS had proposed conditional packaging under status indicator Q1, but finalized separate payment under T after considering public comments. The service is subject to the multiple-procedure discount when billed with another qualifying procedure.²
A New Code for Fluorescence Wound Imaging (97611)
Current Procedural Terminology (CPT) code 97611 replaces the former Category III codes 0598T and 0599T, both of which are deleted for CY 2027.² The new code describes real-time fluorescence wound imaging. Under the OPPS, CMS assigns it to APC 5722 at $244.85.²
A national code and payment rate establish how the service is reported and valued. They do not, by themselves, establish coverage or medical necessity.
Hyperbaric Oxygen (G0277) Rises 12.5%
G0277 remains in APC 5061 at $158.16 per 30-minute unit, up from $140.59 in CY 2026.²,³ The separate professional attendance and supervision service, CPT 99183, remains outside OPPS payment under status indicator B.²
The Physician Conversion Factor Falls
One line, unfortunately, goes in the opposite direction.
While many outpatient wound care services gained payment under the OPPS, the Physician Fee Schedule (PFS) conversion factors declined.
For clinicians who are not qualifying Alternative Payment Model (APM) participants, the conversion factor falls from $33.4009 to $32.6286, a 2.31% decrease. For qualifying APM participants, it falls from $33.5675 to $32.9548, a 1.83% decrease.⁴
The primary reason is the expiration of the one-year 2.5% statutory increase that applied during CY 2026. The 2027 factors also reflect the applicable statutory updates and a 0.12% negative budget-neutrality adjustment.⁴
CMS's national example for an established level 3 office visit (99213) shows payment falling from $95.19 to $92.01.⁶
That is the national office rate. For services furnished in a hospital outpatient department, the physician's professional payment uses the facility rate.
Where Addendum B Actually Lives
By now, Bill knows the answer to most of the questions on his list. Finding the underlying numbers, however, is another matter.
The code-by-code OPPS payment rates aren't printed in the Federal Register. CMS publishes the supporting addenda online.¹
The starting point is the CY 2027 OPPS final rule page. Under the supporting files, look for the 2027 OPPS addenda. Addendum B lists payment rates, APC assignments, and status indicators by Healthcare Common Procedure Coding System (HCPCS) code. Addendum D1 explains what those status indicators mean.
The physician side has its own CY 2027 PFS final rule page. Under Downloads, the PFS addenda include the relative value files. The global-period indicator in those files identifies whether a procedure carries a 0-, 10-, or 90-day global period, information that matters under the new same-day E/M policy.⁵
What Bill Learned Before Lunch
By lunchtime, Bill's desk is covered in printouts.
Some explain why rates increased.
Some explain why they didn't.
And a few point toward changes still taking shape.
Together, they answer most of the questions that arrived with the headline that morning.
Most, but not all.
Bill has worked through enough payment updates to recognize the pattern. The biggest changes are rarely the only ones. They're just the ones people talk about first.
Bill folds his analyst's sheet in half and opens the top drawer, where he keeps the papers he still checks before storm season. The ones that explained something important before everyone else realized it mattered. Old cost reports. A rate sheet from the year a clinic almost closed. He lays this one on top.
The increase is real. So is the reason for it.
And the number that matters for 2028 isn't in any rule yet. The evidence behind it is being assembled now, one claim at a time, in wound centers like the one down the hall.
He closes the drawer and heads to the cafeteria.
References
Centers for Medicare & Medicaid Services. Medicare program: hospital outpatient prospective payment and ambulatory surgical center payment systems; and quality reporting programs. Fed Regist. 2026;91:70284. Published November 6, 2026. Accessed November 10, 2026. https://www.federalregister.gov/documents/2026/11/06/2026-22739/medicare-program-hospital-outpatient-prospective-payment-and-ambulatory-surgical-center-payment
Centers for Medicare & Medicaid Services. CY 2027 OPPS final rule with comment period (CMS-1850-FC), Addendum B: OPPS payment by HCPCS code (11.04.26). Accessed November 10, 2026. https://www.cms.gov/medicare/payment/prospective-payment-systems/hospital-outpatient/regulations-notices/cms-1850-fc
Centers for Medicare & Medicaid Services. CY 2026 OPPS Addendum B: OPPS payment by HCPCS code, July 2026 update (07.14.26). Accessed November 10, 2026. https://www.cms.gov/license/ama?file=/files/zip/july-2026-opps-addendum-b.zip
Centers for Medicare & Medicaid Services. Medicare and Medicaid programs; CY 2027 payment policies under the physician fee schedule and other changes to Part B payment and coverage policies. Fed Regist. 2026;91:70992. Published November 9, 2026. Accessed November 10, 2026. https://www.federalregister.gov/documents/2026/11/09/2026-22743/medicare-and-medicaid-programs-cy-2027-payment-policies-under-the-physician-fee-schedule-and-other
Centers for Medicare & Medicaid Services. CY 2027 PFS final rule (CMS-1848-F), Addendum B: relative value units and related information (updated 11/05/2026). Accessed November 10, 2026. https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1848-f
Centers for Medicare & Medicaid Services. CY 2027 PFS final rule (CMS-1848-F): impact on CY 2027 payment for selected procedures. Accessed November 10, 2026. https://www.cms.gov/medicare/payment/fee-schedules/physician/federal-regulation-notices/cms-1848-f
