2027 Medicare Anesthesia Conversion Factor and Your Subsidy

The short answer: in its proposed 2027 Physician Fee Schedule, CMS set the national Medicare anesthesia conversion factor at $20.2143 for most clinicians, down 1.38% from $20.4976 in 2026. Clinicians who qualify through an Advanced Alternative Payment Model would get $20.4165, down 0.89% from $20.5998. The final rule is expected on or around November 1, 2026, and the new rates take effect January 1, 2027. We will update this page when CMS publishes the final figures.

For a hospital, the proposed cut is worth about 28 cents per anesthesia unit. That is too small to justify a meaningful subsidy increase on its own, and large enough that it will come up in every renewal conversation this winter. This article gives you the numbers to tell the difference.

The anesthesia conversion factor at a glance

2024 opened at $20.4349 and was raised to $20.7739 from March 9 after the Consolidated Appropriations Act, 2024. Starting in 2026, CMS publishes two factors: a higher one for qualifying participants in Advanced Alternative Payment Models (APMs) and a lower one for everyone else.

Why the factor is going down in 2027

Most of the 2027 decrease is the end of a one-time increase, not a new cut. The 2025 budget reconciliation law (Public Law 119-21) added 2.5% to physician fee schedule payments for 2026 only, and that increase drops out on January 1, 2027. The proposed rule offsets part of the loss with:

• the statutory update of 0.25% for most clinicians, or 0.75% for qualifying APM participants;
• a budget-neutrality adjustment of +0.53%; and
• anesthesia-specific practice expense and malpractice adjustments, which the American Society of Anesthesiologists (ASA) puts at about +0.30%.

The proposal does not include changes to medical direction, CRNA supervision or anesthesia base units. CMS projects the Medicare Economic Index, its measure of practice cost inflation, at 2.5% for 2027, so even a flat factor would have been a cut in real terms.

How Medicare pays for an anesthesia case

Medicare pays anesthesia in units rather than relative value units:

Payment = (base units + time units) × locality conversion factor

• Base units are fixed for each anesthesia code and reflect the complexity of the procedure.
• Time units are anesthesia minutes divided by 15, counted to one decimal place.
• The locality conversion factor is the national factor adjusted by the geographic practice cost indices for your area, so your local rate will differ from the national figure.

Take a case with 7 base units and two hours of anesthesia time (8 time units), 15 units in all. At the national rate for most clinicians, it pays $307.46 in 2026 and $303.21 under the 2027 proposal, a difference of $4.25.

When an anesthesiologist medically directs two to four concurrent cases, the anesthesiologist (modifier QK) and the CRNA (modifier QX) each receive 50% of the allowed amount. A CRNA working without medical direction (modifier QZ) receives 100%. Either way, the conversion factor change lands on the care team as a whole.

What the 2027 change is worth to your program

To size it, multiply your program's annual Medicare fee-for-service units by the change in the factor:

Impact ≈ annual Medicare units × -$0.2833 (or × -$0.1833 if the group bills as a qualifying APM participant)

An illustrative example, not a client: a program that bills 150,000 anesthesia units a year, 30% of them to traditional Medicare, has 45,000 Medicare units. The 2027 proposal reduces its Medicare revenue by about $12,700 a year. If Medicare Advantage contracts that pay 100% of the Medicare fee schedule account for another 15% of units, the total is about $19,100.

Now compare payer mix. ASA's most recent commercial survey puts the average commercial anesthesia conversion factor at $82.43, about four times Medicare's. In the same program, moving one percentage point of volume from commercial insurance to Medicare costs about $93,000 a year, more than seven times the 2027 factor change. An aging patient population does that without any action from CMS.

For most hospital programs, the 2027 factor change is measured in tens of thousands of dollars. Subsidy increases measured in hundreds of thousands are coming from somewhere else: clinician compensation, coverage commitments, payer mix and collections.

The long-run trend matters more than one year

The national factor has fallen from $22.2730 in 2019 to a proposed $20.2143 for 2027, a nominal decline of 9.2%. The American Association of Nurse Anesthesiology (AANA) notes in its comment letter on the proposed rule that the Medicare Economic Index rose 22.5% over the same period. Measured against practice cost inflation, a Medicare anesthesia unit now buys roughly a quarter less than it did in 2019.

The gap with commercial insurance is wider still. ASA has long said Medicare pays about 33% of commercial rates for anesthesia. Against the $82.43 average in its latest survey, the 2026 factor is closer to 25%. That gap is why the share of Medicare patients in your operating rooms usually matters more to the group's finances than the annual update.

Could Congress change the number?

Possibly. Two House bills would change how the fee schedule is updated. The Patients First Act of 2026 (H.R. 9693) would tie annual updates to the Medicare Economic Index starting in 2027. The Provider Reimbursement Stability Act of 2026 (H.R. 8163) would raise the budget-neutrality threshold and limit year-to-year swings in the conversion factor to 2.5%. Neither had been enacted as of October 6, 2026.

Congress has stepped in before, mid-year in 2024 and for 2026 through the reconciliation law. Plan on the proposed figure and treat any relief as upside.

What hospital leaders should do before budget season

1. Ask for the unit data. Request your group's annual billed units at your facility by payer class. Without it, nobody can size a reimbursement argument.
2. Do the arithmetic. Multiply Medicare units, plus units under contracts pegged to the Medicare fee schedule, by the factor change. Use your locality rate once CMS publishes the final files.
3. Separate the drivers. A request for more support should show how much comes from reimbursement, how much from compensation, and how much from coverage you asked for, such as added anesthetizing locations, extended hours or call.
4. Check the contract. Some professional services agreements tie stipend adjustments to Medicare rate changes or to "material changes in reimbursement." Know what yours says before the final rule lands.
5. Benchmark the result. Compare total cost per anesthetizing location with peer programs, not just with last year's stipend.

What anesthesia group leaders should do

• Model 2027 at the proposed rate for your locality now, and refresh it when the final rule is out.
• Identify which commercial and Medicare Advantage contracts are set as a percentage of Medicare. Those move with the factor.
• Bring your hospital partner the calculation, not just the headline. A request that shows its math gets resolved faster.

Frequently asked questions

What is the 2026 Medicare anesthesia conversion factor?

The 2026 national factor is $20.4976 for most clinicians and $20.5998 for qualifying APM participants.

What is the proposed 2027 anesthesia conversion factor?

$20.2143 for most clinicians (down 1.38%) and $20.4165 for qualifying APM participants (down 0.89%), from the CY 2027 Physician Fee Schedule proposed rule released July 14, 2026.

When will the final 2027 number be published?

CMS usually releases the final Physician Fee Schedule rule around November 1. The rates take effect January 1, 2027. We will update this page with the final figures.

Which conversion factor applies to my anesthesia group?

The higher factor applies only to clinicians with qualifying participant status in an Advanced APM. Most anesthesia groups do not have it, so the standard factor is the right planning assumption unless your group has confirmed that status.

Does the conversion factor apply to CRNAs?

Yes. CRNAs are paid with the same anesthesia conversion factor, whether they bill independently (QZ) or under medical direction (QX).

Where we come in

At Anesthesia Operations Consultants, we help hospitals and anesthesia groups put numbers like these in context before a renewal, not after it. If a subsidy request is coming, request a benchmark review. You can also read what an anesthesia subsidy is and why hospital anesthesia subsidies keep growing.

Sources: CMS, CY 2027 Physician Fee Schedule proposed rule (CMS-1848-P, 91 FR 43842, July 16, 2026) and fact sheet; CMS anesthesia conversion factor files for 2023 through 2026; CMS Medicare Claims Processing Manual, Chapter 12, Section 50; ASA, July 14, 2026; ASA commercial conversion factor survey, ASA Monitor, November 2025; AANA comment letter, September 1, 2026. All figures are national; locality rates differ. Last updated October 6, 2026.