CMS Releases CY 2027 Proposed Medicare Physician Fee Schedule Payment And Policy Updates

The Centers for Medicare & Medicaid Services released the Medicare Physician Fee Schedule payment and policy updates for calendar year 2027. Major updates include:

Physician Fee Schedule

• After accounting for the expiration of a 2.5% CY 2026 payment increase under the One Big Beautiful Bill Act, the proposed CY 2027 qualifying Alternative Payment Model conversion factor of $33.17 represents a projected decrease of 40 cents or 1.19% from the current conversion factor of $33.57.
• The proposed nonqualifying APM conversion factor of $32.84 represents a projected decrease of 56 cents or 1.68% from the current conversion factor of $33.40.
• Evaluation and management services that occur during a global period would be reimbursed at 100% for the most expensive services and at 50% for all other services.
• The methodology used to calculate practice expense Relative Value Units would move away from older specialty-specific data to a mixture of input data and a “PE stabilizer” designed to minimize volatility in RVU values.
• Diabetes services now would be included as preventive services for Rural Health Clinics to align such payments with those in Federally Qualified Health Centers and physician offices.

Medicare Shared Savings Program

• Shared savings for Basic track Level E would be raised from 50% to 60%.
• Maximum weight used for calculating regional adjustments under the Enhanced track would be reduced from 50% to 35%.
• The prior savings adjustment scaling factor would increase from 50% to 75% to reduce the so-called “ratchet effect” for Accountable Care Organizations.

Comments are due by Monday, Sept. 14. The Missouri Hospital Association published an issue brief with additional information.