Proposed Medicare Physician Fee Schedule 2027: Changes in Reimbursement
The Centers for Medicare & Medicaid Services (CMS) has disclosed a proposed Medicare Physician Fee Schedule (PFS) for 2027, featuring a decrease in physician reimbursements. A drop of 1.68% has been announced, with a slightly reduced cut of 1.19% for those engaged in qualifying alternative payment models (APMs). The newly proposed conversion factors stand at $33.17 and $32.84 for participating and non-participating APM physicians, respectively. This marks a reduction from current rates of $33.57 and $33.40.
The American College of Rheumatology (ACR) has expressed dissatisfaction with these adjustments, citing concerns over the sustainability of physician practices. ACR President William F. Harvey, MD, MSC, FACR, highlighted that healthcare professionals have faced a 33% reduction in Medicare reimbursements when adjusted for inflation since 2001. The ACR fears that continued reductions may lead to physicians merging with larger health systems or ceasing service to Medicare patients.
The proposal also foresees the phasing out of the traditional Merit-based Incentive Payment System (MIPS) by 2029 in favor of MIPS Value Pathways (MVPs) that align better with clinical practices. The ACR supports the transition, but insists that specific pathways accommodate the complexities of providing rheumatologic care. The CMS intends to refine the PFS to enhance accuracy and address outdated payment policies.
Simultaneously, proposed amendments to the Medicare Shared Savings Program aim to enhance accountable care organizations by offering cost-saving opportunities and reducing administrative burdens. Apart from these changes, legislative efforts are underway to tackle ongoing reimbursement challenges. The Patients First Act of 2026 has been introduced in Congress, intending to link Medicare PFS updates with inflation and implement predictable payment frameworks, receiving bipartisan co-sponsorship.
Industry responses vary, with organizations like the American College of Physicians (ACP) and the American Academy of Family Physicians (AAFP) cautiously endorsing provisions that align with strengthening primary care. Despite concerns over reduced physician payments, the AAFP emphasizes the importance of reforming Medicare payments to support primary care comprehensively across different insurance frameworks, acknowledging the ripple effect Medicare policy has on other systems like Medicaid and commercial insurance.