The Centers for Medicare & Medicaid Services (CMS) published the Calendar Year (CY) 2027 Medicare Physician Fee Schedule (PFS) proposed rule on July 16, 2026. This annual update sets Medicare Part B reimbursement rates for physician services and outpatient therapy, among other services, and to update or amend other Part B payment and coverage policies effective on or after January 1, 2027. These rates apply to Part B services furnished in a variety of settings, such as physician offices, hospitals, skilled nursing facilities and other post-acute care settings, hospices, and patients’ homes.
This year’s proposed rule includes two separate conversion factors: one for qualifying alternative payment model (APM) participants (QPs) and one for physicians and practitioners who are not QPs. The proposed CY 2027 qualifying APM conversion factor of $33.17 represents a projected decrease of $0.40 (-1.19%) from the current conversion factor of $33.57. Similarly, the proposed CY 2027 nonqualifying APM conversion factor of $32.84 represents a projected decrease of $0.56 (-1.68%) from the current conversion factor of $33.40. The primary driver of the net reduction in CY 2027 physician payment rates is the expiration of the temporary 2.5% increase Congress provided for CY 2026 through HR 1, which sunsets at the end of the year.
CMS has also included a number of proposals relating to: changes to the PFS and other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, the relative value of services, and changes in the statute; modifications to the Medicare Shared Savings Program (Shared Savings Program); updates to the Quality Payment Program (MIPS and Advanced APMs); changes to payment policies for drugs and biological products paid under Medicare Part B; changes to the Clinical Laboratory Fee Schedule requirements; other changes to Medicare Part B payment policies for Rural Health Clinics and Federally Qualified Health Centers; and changes to the regulations associated with the Ambulance Fee Schedule.
CMS also includes Requests for Information relating to a variety of topics. These topics include: payment models for primary care; potential fraud, waste, and abuse in community-based palliative care; resource costs and requirements for future Alzheimer’s disease and Alzheimer’s disease-related dementias intensive lifestyle intervention services; influence of the Current Procedural Terminology coding system and American Medical Association process on physician payment policy; use of electronic prior authorization by Accountable Care Organizations that participate in the Shared Savings Program; policy changes and resources that could improve clinical outcomes and reduce inappropriate Medicare spending through accountable care programs and models; opportunities related to interoperability, specifically for diagnostic laboratory tests and imaging services; potential improvements to the current star rating assignment methodology for quality measure scores reported under the administrative claims collection type; and MVP scoring policies.
A CMS fact sheet regarding the proposal is available here.
LeadingAge will analyze the proposal, provide additional information for members, and submit comments to CMS. The rule will be open for public comment through September 14.
