Claimocity Claims
Late December and early January are crunch time for billing teams. It’s when many practices call a temp agency. This January, the usual crunch comes with a pay cut. Medicare’s 2027 conversion factor drops 2.31% for physicians, more than the 1.68% CMS proposed in July. Paying an agency premium to get through January eats into a margin that just got thinner.
Temps add hands, but they need system access, payer knowledge, and training during the busiest weeks of the year. Most of what drives the crunch is predictable. Below, we cover why the year-end rush happens, how the 2027 cuts hit inpatient providers, which changes are most likely to cause denials, and a better option than hiring temps every year.
Patients who have met their deductible or out-of-pocket max rush to schedule procedures and follow-ups before their benefits reset. Those claims tend to pay cleanly, but the volume, plus holiday staffing gaps, leaves charges unbilled heading into January.
Open enrollment means many patients start the year with new plans, member IDs, or payers, and outdated insurance on file is a common cause of early-year eligibility denials. Hospital-based groups feel this more because they rarely see the patient’s card. Their demographics come from the facility record, which can lag. Meanwhile, most deductibles reset, so patients owe more out of pocket, collections slow, and the billing team fields more statements and payment calls.
We get the impulse to outsource your medical billing. Temps can help with volume, but they leave every spring, and their training leaves with them. An in-house billing workflow that handles the surge stays in place year after year.
CMS published the final 2027 Physician Fee Schedule on November 9th. The conversion factor, the base rate Medicare uses to calculate physician payments, drops for everyone:
Congress gave physicians a one-year 2.5% bump for 2026, and it expires January 1. The scheduled 2027 updates (+0.25% for most physicians, +0.75% for APM participants) only partly offset it.
The timing makes it worse. The cut takes effect the same day new codes and payer rules slow billing down, so revenue per claim drops right when claims are hardest to get out the door.
In 2026, CMS cut facility practice expense payments. The Society of Hospital Medicine (SHM) estimated this would reduce hospitalists’ total Medicare reimbursement by about 7%, and since hospitalists bill almost entirely in the facility setting, there’s no way around it. The 2027 final rule didn’t reverse that cut. CMS says it will consider comments on it for future rulemaking, and the conversion factor cut now lands on top. Factoring in small RVU decreases on core inpatient codes, hospitalists will see roughly 2.3-4.1% less per Medicare visit in 2027.
SHM has told CMS that independent groups, roughly a third to half of all hospital medicine groups, are now weighing whether they can stay solvent, and that for many, hospital employment may be the only answer.
Selling to a hospital or health system is a real option, and it’s the right one for some groups. But it’s permanent. Before making that move, it makes sense to look at the costs a group still controls: temp labor, denials, slow collections, and missed charges.
The 2027 CPT code set takes effect January 1, with 111 new codes and 63 deletions (not counting early-release codes already in use). Deleted codes are invalid for 2027 dates of service, so outdated chargemasters, EHR order sets, or charge capture pick lists will produce rejections. Payer edit tables often lag, so even correct new codes can be denied in early January.
CMS plans to eliminate the Inpatient Only (IPO) list by January 1, 2029. The 2027 final rule removes 637 procedures across 11 clinical families, including digestive, endocrine, maternity, respiratory, and urinary procedures, and CMS expects to remove the rest in next year’s rulemaking.
While a procedure is on the list, inpatient status is automatic. Once it’s off, each inpatient admission has to be supported by documented medical necessity. Traditional Medicare keeps removed procedures exempt from certain two-midnight medical reviews, so the bigger risk comes from Medicare Advantage and commercial payers, which may push these cases to observation or deny the inpatient level of care. CMS also added 619 procedures to the ambulatory surgical center (ASC) covered list, most of them coming off the IPO list. A procedure can now be Medicare-payable in an ASC while a commercial payer’s authorization grid still treats it as inpatient-only, which can trigger denials either way.
The attending’s admission order and notes are what support inpatient status, and professional claims need to document a Place of Service that matches the facility’s final status. There’s a downstream effect, too: outpatient procedures don’t count toward Medicare’s three-day inpatient stay requirement for skilled nursing coverage, so those denials land on the skilled nursing facility.
The global maternity codes are deleted. Antepartum and postpartum visits are now billed per encounter with E/M codes, and labor management and delivery each get new codes. Pregnancies that span the year boundary are the obvious risk. A practice used to holding a global claim until delivery will have care that started in 2026 and a delivery in 2027, when the old codes are no longer accepted.
Under CMS’s Interoperability and Prior Authorization Final Rule (CMS-0057-F), Medicare Advantage, Medicaid, CHIP, and federal marketplace plans must have electronic prior authorization systems in place starting in 2027. The rule doesn’t create new denial reasons, but as payers switch intake systems, watch for “no auth found” or mismatched authorization errors.
CMS finalized a new Hospitalist MIPS Value Pathway (MVP) and now requires clinicians to report at least one specialty-specific core measure starting in 2027. Traditional MIPS reporting ends after the 2030 performance period, and clinicians move to MVPs or Advanced APMs in 2031. For more detail, see our MIPS reporting guide.
The maternity example shows the temptation: shift a date so the service falls under the year or code set that’s easier to bill. Even when it seems harmless, changing a date of service to fit a code, a benefit year, or a payer rule can be considered billing fraud. Common year-end versions include:
Payers know to look for date patterns around the new year, and for hospital-based groups, facility records and EHR timestamps make mismatches easy to spot in an audit. Bill the date the service was performed, document cross-year care clearly, and follow AMA guidance on the new maternity codes.
Claimocity’s automated RCM with AI-powered charge capture is ready for the 2027 code changes, with no agency premium and no new staff to train. Mobile point-of-care charge capture records charges as patients are seen instead of batching them after the holidays. The rules engine flags coding errors before claims go out, and Smart Central Census keeps rounding lists and patient information current, so your team can handle the year-end surge without adding headcount.
Claimocity offers software only, software plus billing support, or full RCM services. If you’re adding providers or payers at the start of the year, credentialing support is available too.
The new year will still bring new codes, payer rules, and insurance cards. With margins this tight, the goal is to remove the avoidable headaches and keep more of what you bill.
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