CMS Releases CY 2027 Medicare Final Payment And Policy Regulatory Updates

The Centers for Medicare & Medicaid Services released the calendar year 2027 Medicare payment and policy updates to the Home Health Prospective Payment System, the Physician Fee Schedule, the hospital Outpatient PPS and the Ambulatory Surgical Center payment systems. Major updates include:

Outpatient PPS

• Net payment update of 2.3%, consisting of 3.2% market basket update reduced by 0.9% productivity adjustment
• Payment for certain bone density scans, X-rays, ultrasounds, CT scans and MRIs furnished in certain excepted off-campus provider-based departments reduced to a physician fee schedule equivalent
• Reduction in Medicare OPPS payments for drugs purchased under the 340B Drug Pricing Program from average sales price +6% to ASP -28% for certain providers
• Increase to the recovery amount to remedy prior 340B unlawful payment reductions from 0.5% to 2%
• Removal of an additional 637 services from the inpatient only list
• Updates to the hospital outpatient quality reporting program

ASC Payment System

• Net payment update of 2.3%, consisting of 3.2% market basket update reduced by 0.9% productivity adjustment
• Updates to the ASC quality reporting program

Physician Fee Schedule

• Payment update for qualifying advanced alternative payment model participants will decrease the current conversion factor rate of $33.57 for 2026 to $32.95 in 2027, a reduction of $0.62 or 1.83%
• Payment update for non-qualifying advanced alternative payment model participants will decrease the current conversion factor rate of $33.40 for 2026 to $32.63 in 2027, a reduction of $0.77 or 2.31%
• Revisions to evaluation and management payments for overlapping stand-alone services and complexity add-on payments
• Rural Health Clinic and Federally Qualified Health Center payment updates
• Updates to the PFS Medicare Shared Savings Program
• Sunset of the Merit-based Incentive Payment System in favor of the new MIPS Value Pathways or AAPM models for the CY 2031 performance year

Home Health PPS

• Net payment update of 2.4% net with an estimated increase in payments of $415 million
• Stronger ability to recover Medicare payments from noncompliant providers and suppliers
• Recalibration of the PDGM case-mix weights
• Summary of responses to the request for information about creating a home health-specific wage index
• Updates to the Home Health Quality Reporting System
• Updates to Durable Medical Equipment

The Missouri Hospital Association published an issue brief with additional details.