Proposed Medicare Physician Fee Schedule Updates for 2027
On July 14, the Centers for Medicare & Medicaid Services (CMS) unveiled the proposed physician fee schedule for the calendar year 2027. This proposal mandates the application of two distinct conversion factors as dictated by law: one for participants in qualifying alternative payment models (QPs) and another for non-QP participants. According to the proposal, physician payments would decrease, with a 1.19% reduction in the QP conversion factor and a 1.68% reduction in the non-QP conversion factor compared to 2026.
The conversion factors incorporate statutory updates of 0.75% for QPs and 0.25% for non-QPs, along with a 0.53% adjustment to accommodate changes in work relative value units. However, these adjustments are counterbalanced by the absence of a 2.50% statutory increase that was applicable for 2026 but will not continue in 2027. CMS proposes changes in the practice expense methodology by moving away from relying heavily on specialty-specific per-hour data.
Additional changes are suggested for the calculation of indirect practice expenses for skilled nursing facility stays. Furthermore, there is a proposal to reduce payments when an office or outpatient evaluation and management visit coincides with a global procedure conducted by the same physician or within the same practice on the same day. These changes aim to optimize reimbursement processes while aligning with regulatory compliance requirements.
Medicare Shared Savings Program Reforms
The Medicare Shared Savings Program (MSSP) is set to undergo reform with provisions aimed at enhancing savings in two-sided risk tracks and encouraging the participation of new accountable care organizations. Updates are also planned for the MSSP beneficiary assignment methodology, ensuring precise attribution and improved efficiencies in risk management.
Quality Payment Program Updates
Under the Quality Payment Program, CMS suggests introducing three new Merit-based Incentive Payment System Value Pathways and revising all existing ones. The modifications involve discarding several quality measures deemed insufficiently valuable, while focusing on measures related to patient-reported outcomes and chronic disease management. These updates aim to streamline quality measures while supporting enhanced patient care outcomes.
Updates to the Ambulatory Specialty Model, as finalized last year, are also proposed. These updates include clarifications to quality measure scoring, excluding participants based on subspecialty, introducing a rural adjustment, and providing an option for voluntary patient-reported outcome data submission. This aligns with CMS's commitment to refining quality care models across diverse practice settings.
The proposal also addresses the Medicare Part D claims data, suggesting a transition from voluntary to mandatory submissions to the 340B claims data repository for 340B hospitals, effective in 2027. Stakeholders may submit their comments on the proposed rule by September 14. Additionally, members of the American Hospital Association (AHA) will be provided with a detailed Regulatory Advisory for immersive insights into the proposed changes.