- Federation urges CMS to withdraw modifier 25 payment cut
- Justice Department announces emergency scheduling of three potent kratom compounds
- AMA comments on 2027 hospital outpatient payment proposed rule
- Physician enrollment provisions included in the CY 2027 home health proposed rule
- OMB federal grantmaking rule update
- More articles in this issue
Federation urges CMS to withdraw modifier 25 payment cut
The AMA led more than 150 national medical specialty societies, state medical associations, and other healthcare organizations in a sign-on letter (PDF) urging the Centers for Medicare & Medicaid Services (CMS) not to finalize its proposal, in the calendar year (CY) 2027 Medicare Physician Fee Schedule (MPFS) proposed rule, to reduce payment by 50% when a separately identifiable office/outpatient evaluation and management (E/M) service reported with modifier -25 is furnished on the same day as a procedure with a 0-, 10-, or 90-day global period.
The Federation argues that CMS has not substantiated the policy. The agency characterizes the resource overlap it seeks to correct only as “likely,” without quantifying it, identifying the specific duplicated resources, or explaining what has changed since it declined to finalize a substantially similar, and narrower, proposal for CY 2019. The letter additionally emphasizes that the RUC and CMS already remove duplicative work and practice expense through the established valuation process, so an across-the-board reduction would take a second cut for overlap that the process has already addressed. The 50% figure is also disproportionate and departs from other multiple procedure payment reductions, which apply only to the specific component where an efficiency actually occurs rather than to physician work, practice expense and professional liability alike.
The letter further warns that the reduction would fall hardest on the independent, office-based practices this administration has said it wants to sustain, because those practices cannot offset the cut with facility revenue—and for some common procedures, the reduced payment would fall below the direct costs of furnishing the service. The Federation urges CMS to withdraw the proposal, not to extend it to inpatient or other E/M services, and to address any genuine overlap through the misvalued code and RUC valuation processes on a code-specific basis.
Justice Department announces emergency scheduling of three potent kratom compounds
The U.S. Department of Justice (DOJ) last week (PDF) announced the emergency, temporary scheduling of three kratom-related compounds that, according to the DOJ order, “pose an imminent hazard to public safety: mitragynine pseudoindoxyl, commonly known as MGPI, and two synthetic compounds known as MGM-15 and MGM-16.”
Kratom is an extract of a tropical tree (Mitragyna speciosa) native to Southeast Asia used by some individuals to self-treat conditions such as pain, coughing, diarrhea, anxiety and depression, opioid use disorder, and opioid withdrawal. There are no FDA-approved prescription or over-the-counter drug products containing kratom or its known alkaloids. Kratom use raises concern during pregnancy due to risk for opioid-like neonatal abstinence syndrome. Additional adverse effects include mental and neurological symptoms (confusion, tremors and seizures), heart and lung problems (high blood pressure and slow breathing), gastrointestinal problems (nausea and vomiting), and liver problems.
An FDA assessment of 7-OH found that “7-OH produces respiratory depression, physical dependence, and withdrawal symptoms characteristic of classical opioids, such as morphine, fentanyl, oxycodone, and hydrocodone.” Studies have found that “7-OH produces respiratory depression with more than 3-fold greater potency than morphine.” The FDA reports that an estimated 1.7 million Americans aged 12 and older used kratom in 2021.
The AMA continues to support legislative efforts banning synthesized, purified or derivative products from kratom for marketing, distribution, promotion and sale including but not limited to the unregulated mitragynine along with the 7- hydroxymitragynine and MGM-15 market. To help states, the AMA Advocacy Resource Center encourages reviewing a recent issue brief (PDF) that contains legislative examples from states that have taken action to regulate kratom.
Read the full DEA order (PDF).
AMA comments on 2027 hospital outpatient payment proposed rule
In a comment letter (PDF) to CMS Administrator Mehmet Oz, MD, MBA, the AMA responded to the calendar year (CY) 2027 proposed rule for the Hospital Outpatient Prospective Payment System (OPPS) and Ambulatory Surgical Center (ASC) Payment System. Although OPPS is a facility payment system, many of its proposals carry direct consequences for physicians, and a consistent theme runs through the AMA’s comments: payment policies that pay differently for the same service based on site-of-service or ownership disadvantage independent physician practices, encourage their acquisition by hospitals and health systems, and raise costs for patients and the Medicare program.
The AMA offered qualified support for CMS’ proposal to extend site neutral payment to imaging without contrast furnished in excepted, off-campus hospital outpatient departments. As with last year’s drug administration policy, the AMA supports site neutral payment in principle but objects to achieving it by removing net dollars (an estimated $260 million in the first year) from the Medicare program, and urged CMS to instead reinvest those savings into other Part B services, including the MPFS. The AMA noted that the OPPS-MPFS payment gap reflects, in part, physician payment rates that have not kept pace with practice costs, which rose 59% between 2001 and 2026 while physician pay rose only 7%. The AMA also urged CMS to evaluate its CY 2026 drug administration policy before expanding this authority further.
On the phased elimination of the Inpatient Only (IPO) list, the AMA supported removing services where the evidence shows they can be furnished safely in the outpatient setting for the Medicare population, but urged CMS to let clinical and payment-system readiness (rather than a fixed calendar) set the pace, and to strengthen the medical review protections that safeguard physicians’ judgment about where a given patient should be treated. The AMA supported CMS’ proposal to pay average sales price minus 33.4% for 340B-acquired drugs, which narrows a payment advantage that depends on hospital ownership. On prior authorization (PA), the AMA opposed expanding the program to additional botulinum toxin injection codes absent evidence of inappropriate utilization, and urged that if CMS proceeds, it allow a single authorization to cover a full course of therapy and decide requests within the same timeframes CMS applies to Medicare Advantage.
The AMA also commented on the codification of provider-based status requirements under section 6225 of the Consolidated Appropriations Act, 2026, and CMS' request for information on hospital price transparency—supporting the transparency objectives of both while urging CMS to minimize burden on small, rural, and independent facilities, to make hospital prices genuinely comparable across the settings where a service may be furnished, and to disclose clearly when a separate, additive facility fee applies, all without extending any price-posting mandate to physician practices.
Physician enrollment provisions included in the CY 2027 home health proposed rule
The AMA’s comments (PDF) on the calendar year (CY) 2027 Health Prospective Payment System proposed rule are directed not at home health payment, but at a series of Medicare provider and supplier enrollment provisions in the rule that would apply to nearly all physicians and physician practices despite appearing in a home health rule that the physician community has little reason to monitor. Two patterns run through the provisions the AMA commented on: some would expand CMS’ authority to deny or revoke enrollment while removing the criteria that currently guide how that authority is used, and others would increase the consequences of an adverse action, including reenrollment bars of up to 10 years and newly retroactive effective dates, without giving physicians a corresponding opportunity to correct the problem or be heard. Some grounds, such as revocation for a “pattern or practice of abusive prescribing,” apply to physicians alone, yet the rule’s supporting evidence concerns home health agencies and hospices and includes no examples involving a physician practice.
The AMA urged CMS to limit these new and expanded authorities to the provider types its evidentiary record actually supports, and, at a minimum, to propose future physician enrollment changes through the MPFS rulemaking cycle—the vehicle physicians rely on to identify such policies—rather than in a rule whose own impact analysis examines only home health entities. More broadly, the AMA cautioned that these provisions would create real exposure for good-faith physicians based on undefined standards, technical or clerical missteps, a practice’s location, or the conduct of third parties, and would fall hardest on small and independent practices that lack dedicated compliance staff. Because access to care is local and often specialty-specific, the AMA emphasized that the loss of even a single practice can end access for a defined patient population, and asked CMS to weigh that consequence rather than measuring beneficiary access against the size of the enrolled provider universe nationally.
OMB federal grantmaking rule update
On May 29, the Office of Management and Budget (OMB) issued its proposed Regulation for Federal Financial Assistance rule, which would make changes to the Uniform Guidance governing federal grants. Among other changes, the proposal would provide for greater administration oversight and consideration of administration priorities in discretionary grantmaking.
Stakeholders, including the AMA and the Association of American Publishers, of which the AMA is a member, have raised concerns that the proposal could shift grant decisions away from independent, merit-based, and expert review toward greater political or administration influence. Stakeholders are also concerned that the proposal would expand agencies’ authority over existing awards. In addition, the AMA commented (PDF) against provisions in the proposed rule that would ban publication, subscription, and conference costs because of the detrimental impact such restrictions would have on medical journals like JAMA, as well as on scientific and scholarly publishing practices more broadly.
Due to AMA advocacy and the efforts of a broad stakeholder community, the FY2027 Continuing Resolution includes Section 157, which would prohibit OMB from finalizing or implementing the proposed rule, or a substantially similar rule, through Dec. 11, 2026.
The Continuing Resolution passed the House on Sept. 1 by a vote of 370–48, following Senate passage on Aug. 8 by a vote of 90–6, and is now awaiting the president’s signature. If enacted, Section 157 would provide an important but temporary pause on the proposed rule; however, it would not permanently preclude OMB from pursuing the rule after Dec. 11.
The AMA will continue to work with the Association of American Publishers and the broader stakeholder community to ensure that OMB’s draft guidance does not move forward in its current form.
