In July 2018, the Centers for Medicare & Medicare (CMS) first proposed the idea of cutting physicians’ Medicare pay when they provide a separately identifiable office or outpatient evaluation and management (E/M) visit on the same day as most procedures are performed.
The agency scrapped the plan eight years ago after physicians and other stakeholders raised serious concerns. But CMS is pitching a similar idea in its 2027 Medicare physician payment schedule proposed rule. If finalized, most changes, including this one, would be scheduled to take effect Jan. 1.
This time, CMS is calling for a 50% payment cut when a physician provides a separately identifiable office or outpatient E/M visit on the same day as most procedures are performed. And they would apply the policy to more procedures than they would have in 2019.
It’s a proposal that puts physician practices and patient access to care at risk and the AMA is working to ensure that this provision in the proposed rule doesn’t become finalized. Allowing the pay cut to take effect next year poses an especially big threat for independent physician practices.
“That’s not a small adjustment. For some practices, it can mean providing care for less than it costs to deliver it and, ultimately, that effects patients, especially in communities that depend on independent physicians for access to care, like mine,” the AMA’s immediate past president, Bobby Mukkamala, MD, a Flint, Michigan, otolaryngologist, said in an Instagram post. “CMS hasn’t provided the evidence to justify a cut this large and there is already a process to address genuine overlap in payment.”
Physicians now report Modifier -25 to show that an E/M service is significant and separately identifiable from the procedure when a patient comes into the office with a new or worsening problem that requires evaluation, diagnosis and medical decision-making and also need a procedure during that same visit.
The AMA and medical specialty societies work through the AMA/Specialty Society Relative Value Scale Update Committee (RUC) and closely with CMS to review resources required for physicians to provide medical services—including when there are overlaps when procedures are commonly performed with an E/M service.
If there are specific services that still contain duplicative resources, that should absolutely be identified and reviewed, but individually, AMA President Willie Underwood III, MD, MSc, MPH, wrote in a recent Leadership Viewpoints column.
“Patients benefit when physicians can keep their practices open, sustainable and focused on providing care. Medicare policy should support that goal—not make it harder to achieve,” he wrote. “Private practice physicians already are under tremendous pressure trying to keep their practices open. How does it make any sense to pay a physician less for doing what is right for their patients?”
The AMA is pressing CMS to explain why it is calling for the 50% pay cut now and is continuing to advocate for CMS to withdraw the proposal and instead work through the established process to address any concerns about potential duplication with specific codes.
The AMA is leading the charge, recently organizing a sign-on letter to CMS from nearly every state and national medical specialty society (PDF) asking CMS to abandon this proposal.
“When physicians speak with one voice, we can make a difference. Join us in this effort to protect independent practices and patients’ access to care,” said Dr. Mukkamala.
Other proposed changes physicians should know about
The 50% payment cut is not the only change the AMA and physicians are concerned about in the 2027 Medicare physician payment schedule proposed rule, but there are also a couple of bright spots. Here are more proposed policy changes that physicians should know about that would take place Jan. 1 if they are part of the finalized rule. For a more complete picture, check out the AMA’s in-depth summary and analysis (PDF).
Maternity care services. Maternity CPT codes would be comprehensively revised, including a new code structure to provide more transparency for patients and an increased granularity that would improve physicians and researchers’ ability to better understand what is driving maternal mortality. CMS proposes to adopt previous AMA recommendations to update the maternity care services coding structure.
In addition, CMS is soliciting comments on maintaining the current coding through the creation of HCPCS G-codes. The AMA believes doing that would create unnecessary confusion and is urging CMS to finalize the Maternity Care Services CPT code set without keeping the historical global structure via HCPCS G-codes.
Remote monitoring. CMS has been paying for CPT codes for remote physiologic monitoring (RPM) since 2019. More recent codes for remote therapy monitoring (RTM) followed, as well as RPM codes that were added this year. Since 2021, only established patients are eligible for the RPM services. In 2027, CMS is proposing that RTM services also only be allowed for established patients. Also new is a proposal to only allow payment for RPM or RTM services performed by clinical staff that the practice employs, as opposed to contractors, which the AMA will oppose.
In addition, CMS proposes cutting the practice-expense relative value units (RVUs) for several of these services using crosswalks to other services and eliminating all direct practice costs for treatment management codes. The changes would lead to big pay cuts for RPM and RTM services in 2027. Payment reductions are limited to 19% annually, so the cut to several of the codes would be phased in over multiple years until CMS’ proposed values are fully implemented.
However, the 19% reduction doesn’t apply for new codes and CMS has also put forth an alternative proposal to bundle all RPM and RTM CPT codes into four new HCPCS G-Codes in 2027 to describe remote monitoring services, which would not only sharply reduce the specificity of the codes, but also lead to significant cuts being implemented all at once in 2027. The RUC was scheduled to reexamine the remote monitoring codes in January 2028 but is moving up its review by a year and urging CMS to postpone the payment reductions and G-codes to allow time to collect data on the codes.
Merit-based Incentive Payment System (MIPS) and MIPS Value Pathways (MVPs). Last year, after ongoing AMA advocacy, CMS finalized a policy to maintain the MIPS threshold to avoid a MIPS penalty at 75 points through performance-year 2028/payment-year 2030. CMS proposed a new core measure requirement for the Quality Category for MIPS and MVPs.
The AMA believes this is an improvement from the current outcome measure requirement, which the AMA has long opposed due to the lack of available outcome measures for all specialties and leads to reporting for the sake of reporting, as opposed to most relevant for a physician’s scope of practice. With the core measure requirement, CMS proposes exceptions for small practices and attestation policy for clinicians without applicable core measures. CMS proposes to sunset traditional MIPS and transition to mandatory MVPs in 2029, which the AMA strongly objects due to lack of clinical relevant MVPs across all specialties and not a true reform of the program that reduces the administrative burden of MIPS.
Promoting interoperability. In response to longstanding AMA advocacy, CMS has proposed several changes to the MIPS promoting interoperability category to cut administrative burdens and focus on high-value, outcome-oriented measures. Among other changes, CMS wants to remove unnecessary Certified Electronic Health Record Technology (CEHRT) requirements to reduce physician documentation burden; remove time-consuming CEHRT Surveillance requirements from physician attestations; and remove the Security Risk Analysis measure to reduce redundancy.
CMS also proposed making the previously finalized electronic prior authorization (ePA) measure optional for the 2027 performance year, with a chance to earn 10 bonus points. The attestation-based measure would become mandatory in 2028, although still only requiring ePA for one patient. Further, CMS proposed a new attestation-based ePA measure for prescription drugs to promote uptake and availability of drug ePA through EHR use. For payment year 2028, CMS proposes that a MIPS-eligible clinician attest to having requested prior authorization electronically using CEHRT for at least one prescription drug ordered. There are several proposed exclusions, including clinicians that don’t prescribe drugs that require prior authorization.
Practice-expense (PE) methodology. CMS proposes to allocate indirect PE based on physician work RVUs and clinical labor for all services except 10- and 90-day globals; remove indirect practice cost indices, resulting in redistribution across specialties; and cap payment changes on services that are not new, revised or revalued at 5 percent from the previous year. The AMA will request that CMS defer this proposal until after additional information is shared regarding rationale and impact.
Advanced Alternative Payment Model (APM) Incentive Payments. CMS proposes to apply the higher conversion factor for APM participants only to TINs that participate in APMs, rather than to all of a qualifying participant’s items and services. CMS estimates this will result in $2.38 billion less over a decade, and this number would grow in future years as a result of the cumulative impact of the higher conversion factor over time. The AMA will strongly oppose this proposal due to logistical complications, questions over statutory authority, and negative impacts on future APM participation, particularly for specialists and rural physicians.
Medicare Shared Savings Program (SSP). CMS proposes several changes in response to AMA advocacy including shifting to flexible, attestation-based CEHRT use requirements, continuing the availability of the MIPS clinical quality measure (CQM) collection type, establishing Medicare electronic CQMs as a collection type (in addition to Medicare CQMs), and adding a new option to reduce or eliminate beneficiary out-of-pocket costs for certain items and services.
CMS proposed several patient attribution and benchmark methodology changes that would reduce net savings by an estimated $5.5 billion over a decade to which the AMA urged caution about implications on program participation and disparate impacts on certain types of ACOs and urged further analysis and transparency before finalizing. The Agency also proposed adding a new “growth adjustment factor” to encourage ACOs to recruit new practices, particularly rural, small, and independent practices, which the AMA supports.
Ambulatory Specialty Model. CMS proposes a number of “technical refinements and adjustments,” several of which are responsive to the AMA’s prior recommendations, including exempting certain cardiologists if they self-designate as a particular subspecialty. Unfortunately, other proposed ASM changes are burdensome or problematic, including calculating administrative claims-based quality measures at the individual level, even if a practice reports quality measures as a group, which could inadvertently penalize physicians focused on complex patients. More importantly, the Agency does not address several of the AMA’s more overarching concerns with the model, including steep payment cuts of up to 9 percent in the first year, grading performance based on peer performance during the performance year rather than prospective benchmarks so participants know what to aim for, no additional payments to support enhanced preventive care, and keeping the model mandatory. The AMA strictly opposes all mandatory models.
Conversion-factor updates. CMS proposes a conversion factor cut of 1.19% for APM participants and a 1.68% decrease for other physicians, reflecting expiration of a temporary 2.5% update for calendar-year 2026, a 0.53% budget-neutrality adjustment to balance proposed coding and payment policy changes, and the base 0.25% physician update and 0.75% APM participant updates under Medicare Access and CHIP Reauthorization Act of 2015 (MACRA).
The AMA continues to ask Congress for a permanent Medicare payment update tied to inflation given Medicare payment rates that have fallen (PDF) about 33% since 2001, when adjusted for inflation. A comprehensive bipartisan bill recently introduced in the House of Representatives would address all four core reforms that the AMA and organized medicine have long asked for. In addition to establishing an automatic, annual inflation-based payment update, the AMA-supported Patients First Act (H.R. 9693) would: modernize budget-neutrality policies, overhaul MIPS with a new simplified quality program, and include APM reforms.
AMA CEO John Whyte, MD, MPH, sent the sponsors a letter of support days after the bill was introduced. Write your representative and urge them to cosponsor this historic legislation.
Requests for comment. The rule includes several requests for comment, including one on CPT, redesigning primary care payments, transitioning to digital quality measures and alternative approaches to CMS’ controversial change finalized last year to reduce the indirect practice expense payment for all services provided in a facility setting. The AMA will submit detailed comments on each.
Comments on the proposed rule are due Sept. 14. A final rule is expected by Nov. 1, and most changes would take effect Jan. 1. Subscribe to AMA Advocacy Update for the latest.
