Proposed changes to the MPFS

For CY 2027, CMS is proposing a payment update of -1.19% for clinicians in advanced payment models (APMs) and -1.68% for all other clinicians. The payment update includes a 0.75% increase for APM participants and a 0.25% increase for non-APM participants, along with an estimated 0.53% adjustment for changes in work relative value units.

With a temporary 2.5% payment increase included in the One Big Beautiful Bill Act expiring at the end of the year and only modest payment updates to offset, physician payment rates will fall next year.

According to CMS, these updates "better reflect modern medical practice and support the Trump administration's goal of shifting from sick care to healthcare."

"Over time, the PFS has accumulated layers of outdated payment policies and billing conventions that no longer fully reflect how healthcare services are delivered," the agency said. "CMS is proposing a targeted recalibration of payment rates to improve accuracy, transparency, and consistency."

The proposed rule also includes several measures that target what CMS views as duplicative or inflated payments. For example, CMS proposed cutting reimbursements for surgeries performed on the same day as evaluation and management visits. The agency also proposed tightening billing for remote monitoring by requiring an initiating visit, banning billing when work is done by contractors, and limiting some services to established patients. 

CMS is proposing three new MVPs for diabetes, hypertension, and hospital-based care to promote prevention and expand participation opportunities. If this change is finalized, the MVPs would include a relevant reporting option for roughly 98% of specialties.

Other proposals in the rule include making participation in the Medicare Part D Claims Data 340B Repository mandatory, making electronic prior authorization mandatory, and changing the methodology for determining whether clinicians qualify for advanced payment model bonuses.

The American Academy of Family Physicians (AAFP) also voiced concerns about the payment decrease, saying that it would "further destabilize physician practices and limit investment in primary care."

"Medicare physician payments have declined 33% from 2001 to 2025 when adjusted for inflation, even as practice expenses have increased," AAFP said in a statement. "Reforming Medicare payment is critical for serving all patients across the healthcare system, because Medicare payment policies influence Medicaid, Tricare, and commercial insurance."

Both AMGA and AAFP have called for Congress to implement permanent Medicare payment reform that includes a predictable update linked to the Medicare Economic Index.

"A single year of congressional intervention was never a substitute for structural reform. The moment the temporary fix expired, the underlying erosion of physician payment reasserted itself," Penso said. "Medical groups and health systems cannot build sustainable, high-value, team-based care on a payment system that swings between modest relief and a renewed decline every 12 months."

However, not all changes in the proposed rule were unwelcome. The National Association of Accountable Care Organizations (NAACOS) praised the ACO proposals in the rule.

"CMS projects that the proposed rules will bolster the impact ACOs have had by reducing Trust Fund expenditures by $5.5 billion through 2036," the organization said. "NAACOS shares CMS' goal of having all Medicare beneficiaries in an accountable care relationship. Today’s proposals are a positive step toward making this goal a reality and we look forward to continued collaboration."