Inside the 2027 MPFS rule

In July, CMS initially proposed a payment update of -1.19% for clinicians in advanced payment models (APMs) and -1.68% for all other clinicians. 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.

In the final MPFS rule, CMS increased the payment cuts for physicians, with APM participants seeing a -1.83% decrease and non-APM participants seeing -2.31% decrease. The payment update includes a 0.75% increase for APM participants and a 0.25% increase for non-APM participants, along with an estimated -0.12% adjustment for changes in work relative value units.

Aside from the overall payment updates, CMS also finalized a proposal to reduce Medicare payments when an evaluation and management visit occurs on the same day as a bundled surgical service at the same physician practice. Medicare will reduce payment for the lower-cost service by 20%, much less than the 50% cut CMS originally proposed.

Other proposals finalized in the rule include more financial incentives for accountable care organizations (ACOs) and the phaseout of reporting options for the Merit-based Incentive Payment System (MIPS), beginning with the 2031 performance period.

"Medicare should reward clinicians for keeping people healthy," said HHS Secretary Robert F. Kennedy, Jr. "Under President Trump's leadership, we are putting prevention and primary care at the center of Medicare, closing payment loopholes, and cracking down on waste."

However, physician groups had largely mixed reactions to the final MPFS rule. Although some groups like Accountable for Health and the American Academy of Family Physicians praised several of the changes in the rule, including increased payments for ACOs and comprehensive primary care services, other groups were more critical in their responses.

"The continued erosion of Medicare physician payments, combined with policies that fail to recognize the complexity of care provided by rheumatologists, threatens the stability of physician practices and patients' access to essential care," said William Harvey, president of the American College of Rheumatology.

"These cuts are not happening in isolation," said Jerry Penso, president and CEO of the American Medical Group Association. "Our members are absorbing reductions to physician and clinician reimbursement and outpatient drug reimbursement at the same time they face a trillion dollars in pending Medicaid cuts. Each one makes it harder to sustain the staff, technology, and care models patients depend on. Congress must enact lasting reforms now, before access to care suffers."

Inside the 2027 OPPS/ASC rule

In the 2027 OPPS/ASC final rule, CMS finalized a 2.3% payment increase for both the OPPS and ASCs, a slight decrease from the 2.4% originally proposed in July. 

Other changes in the final rule include expanding site-neutral payments for more medical services, including imaging services without contrast, and removing more procedures from the inpatient-only (IPO) list. In 2027, CMS will remove 637 services from the IPO list, including endocrine, digestive, auditory, and respiratory procedures.

"By right-sizing payments and rooting out waste, today's reforms will drive affordability in Medicare for current beneficiaries while ensuring it will still be there to serve their children and grandchildren," said CMS Administrator Mehmet Oz.

Several healthcare groups, including the American Hospital Association (AHA), the Association of American Medical Colleges (AAMC), and America's Essential Hospitals (AEH), were highly critical of the final rule and spoke out against it after its release.

In a statement, Ashley Thompson, SVP of public policy analysis and development at AHA, said the 340B policy changes are a "continued assault" that "will further stress hospitals' ability to care for their patients."

"The drug payment cuts disproportionately affect and target non-profit and public hospitals serving low-income patients, while redistributing billions of dollars to hospitals that do not share the same safety-net and academic missions," said Jonathan Jaffery, AAMC's chief healthcare officer. "These cuts threaten access to critical services made possible by the 340B program and will lead to worse health outcomes for patients."

"Rather than strengthening and preserving safety net funding, CMS is instead prioritizing hospitals that do not serve the safety net and nodding to the pharmaceutical industry's interests," AEH said in a statement. "These cuts are landing at a time when essential hospitals and their mission are more important than ever, as millions of people risk losing their Medicaid coverage in the coming months."