Proposed Changes to Medicare Physician Fee Schedule 2027
On July 14, 2026, the Centers for Medicare and Medicaid Services (CMS) unveiled the proposed 2027 Medicare Physician Fee Schedule (PFS). This proposal suggests reductions in the PFS conversion factor, impacting financial operations for both qualifying and non-qualifying alternative payment model (APM) participants. Significant proposals include changes to practice expense (PE) methodology, evaluation and management (E/M) restructuring, Medicare Shared Savings Program (MSSP) reforms, and mandatory 340B repository reporting. These changes could substantially affect operational and financial practices if enacted.
Stakeholders are encouraged to review the comprehensive proposal, including the RFIs, by submitting comments before the deadline on September 14, 2026. With the temporary 2.5 percent statutory increase in physician payments expiring at the end of 2026, reduced payments for 2027 could reignite discussions in Congress on the necessity for long-term physician payment reform. This highlights the importance of a strategic approach to regulatory compliance requirements amidst anticipated changes.
Practice Expense Modernization
A key component of the proposal is the modernization of how PE relative value units (RVUs) are determined. CMS intends to replace outdated specialty-based survey data with new invoice-based pricing beginning in CY 2027. This update aims to better reflect current practice trends, revising specialty code assignments, and ensuring equitable payments for E/M nursing facility visits. Feedback is sought on introducing a modifier for hospital-employed physicians to address indirect PEs.
Impact on Reimbursement and Specialty Payments
The proposal also aims to revise payments for services linked to global surgical periods, potentially affecting payments for concurrent E/M visits. Specialties like otolaryngology and dermatology may experience significant impacts. CMS’s focus on refining reimbursement reflects an effort to align compensation with the current healthcare landscape.
Technological Integration and Telehealth Considerations
CMS is responding to OIG reports on Remote Patient Monitoring (RPM) and Remote Therapeutic Monitoring (RTM) by intending to modify billing requirements. This could significantly impact third-party companies within these sectors. The introduction of HCPCS G-codes for different workloads in Advance Care Planning (ACP) services is also proposed.
Additional proposals include refining procedures related to Medicare Part B and D Inflation Rebate Programs and extending telehealth service waivers through CY 2027. CMS encourages feedback on the integration of AI technologies into Medicare payment strategies, signifying a push towards leveraging technology for improved care models.
Finally, CMS invites feedback through RFIs on potential revisions to primary care payment structures and AMA's CPT code reliance. These inquiries reflect the agency’s continued efforts to realign physician compensation structures with the evolving medical practice landscape, indicating a forward-focused strategy for Medicare policy advancement.