CMS Issues CY 2027 Medicare Physician Fee Schedule Proposed Rule

The Centers for Medicare and Medicaid Services (CMS) on July 14, 2026, released the 2027 Medicare Physician Fee Schedule (PFS) proposed rule, reducing the PFS conversion factor from $33.5675 to $33.1693 for qualifying alternative payment model (APM) participants and from $33.4009 to $32.8409 for nonqualifying APM participants. Although many of the proposals are technical, several – including the practice expense (PE) methodology revisions, evaluation and management (E/M) complexity add-on restructuring, Medicare Shared Savings Program (MSSP) reforms and mandatory 340B repository reporting – would have meaningful operational and financial implications if finalized. The proposed rule also includes several far-reaching Requests for Information (RFIs) that signal potential future reforms to physician payment, primary care, diagnostic interoperability, and the Current Procedural Terminology (CPT) coding and valuation process.

CMS will accept comments on the proposed rule through September 14, 2026. Given the breadth of the proposals and numerous RFIs, stakeholders should carefully evaluate both the immediate payment impacts and broader policy direction reflected throughout the proposal.

More on the proposed rule can be found in the accompanying press release, fact sheet and addenda, along with fact sheets specific to the MSSP and Quarterly Payment Program (QPP).

Key Takeaways

• Physician payment would decline overall despite statutory updates. Expiration of the temporary 2.5 percent statutory payment increase results in proposed conversion factor reductions of 1.19 percent for qualifying APM participants and 1.68 percent for other clinicians, despite modest statutory payment updates and a positive budget neutrality adjustment.
• CMS proposes the most significant PE methodology revisions in years. The proposal would phase out reliance on outdated specialty-level survey data, revise indirect PE allocation and introduce a stabilization adjustment intended to reduce annual payment volatility while redistributing payments across specialties.
• CMS continues prioritizing longitudinal primary care. The agency proposes replacing Healthcare Common Procedure Coding System (HCPCS) code G2211 with a percentage-based modifier that would increase payment for qualifying office and outpatient E/M visits by 16 percent, with an enhanced 32 percent modifier for eligible MSSP and Long-Term Enhanced Design (LEAD) Accountable Care Organization (ACO) clinicians.
• Global surgery payment reforms continue. CMS proposes reducing payment for separately identifiable E/M visits billed with Modifier -25 on the same day as a global surgical procedure and pauses additional post-operative data collection while seeking comment on broader global surgery valuation reforms.
• CMS proposes meaningful changes to the MSSP. Key proposals include increasing the BASIC Track Level E sharing rate from 50 percent to 60 percent, allowing eligible ACOs to reduce or waive Part B cost-sharing for assigned beneficiaries, simplifying Certified Electronic Health Record Technology (CEHRT) requirements and revising benchmarking methodologies.
• CMS proposes significant QPP changes, including transitioning away from traditional Merit-Based Incentive Payment System (MIPS) reporting beginning in 2029 and continuing to emphasize MIPS Value Pathways (MVPs) as the primary quality reporting framework.
• The rule includes numerous RFIs that could shape future rulemaking. CMS seeks comment on redesigning primary care payment, alternatives to the CPT coding and Specialty Society Resource-Based Relative Value Scale Update Committee (RUC) valuation process, reducing duplicate laboratory and imaging testing through improved interoperability, specialty participation in MSSP, community-based palliative care and Alzheimer's disease prevention.

Proposed Calendar Year (CY) 2027 Conversion Factors

Although the U.S. Congress provided physicians with a temporary 2.5 percent statutory payment increase for CY 2026, that increase expires at the end of the year. As a result, physicians would experience a net payment reduction in CY 2027 despite statutory payment updates and a positive budget neutrality adjustment. The proposal is likely to renew congressional discussions regarding long-term physician payment reform, particularly as Medicare physician payment updates continue to lag projected increases in the Medicare Economic Index (MEI).

• PFS Conversion Factor – Qualifying APM Participants: CMS proposes a CY 2027 conversion factor of $33.1693, representing a 1.19 percent reduction from CY 2026 after accounting for the expiration of the temporary 2.5 percent statutory payment increase. The proposed conversion factor reflects a 0.75 percent statutory update for qualifying APM participants and a 0.53 percent positive budget neutrality adjustment.
• PFS Conversion Factor – Nonqualifying APM Participants: CMS proposes a CY 2027 conversion factor of $32.8409, representing a 1.68 percent reduction from CY 2026. The proposed rate reflects the expiration of the temporary 2.5 percent statutory payment increase, a 0.25 percent statutory update and the same 0.53 percent budget neutrality adjustment.
• Anesthesia Conversion Factor: CMS proposes an anesthesia conversion factor of $20.4165 for qualifying APM participants and $20.2143 for nonqualifying participants. In addition to the statutory updates and budget neutrality adjustment, the anesthesia conversion factors include a 0.30 percent specialty-specific PE and Malpractice (MP) adjustment.
• Medicare Telehealth Originating Site Facility Fee: CMS proposes increasing the originating site facility fee for HCPCS code Q3014 to $32.65 for CY 2027, reflecting the proposed 2.5 percent MEI update.

Read a special commentary: A Physician's Perspective on Medicare Physician Payment Reform, by Holland & Knight Senior Policy Advisor Larry Bucshon, M.D.

Modernizing PE Payment

One of the most significant proposals in the rule is CMS' effort to modernize how PE relative value units (RVUs) are calculated. The agency argues that portions of the current methodology continue to rely on specialty-level survey data that are nearly two decades old and no longer accurately reflect contemporary physician practice.

CMS proposes three major changes beginning in CY 2027:

• revising indirect PE allocation to better align indirect costs with work RVUs and clinical labor inputs
• phasing out the Indirect Practice Cost Index over a two-year transition because it continues to anchor PE values to outdated specialty survey data
• creating a new PE stabilization adjustment that would limit annual increases or decreases in PE RVUs to +/-5 percent for most existing services

CMS would also continue updating direct PE inputs through invoice-based pricing, revise specialty assignments for selected HCPCS codes, equalize facility and non-facility PE payments for nursing facility E/M visits, and publish imputed professional and technical component RVUs to improve transparency and is seeking comment on a potential modifier for hospital-employed physicians to better account for indirect PEs.

Although framed as a technical methodology update, the PE proposal represents one of CMS' most consequential physician payment reforms in recent years. Because PE accounts for a substantial share of payment for many procedural services, changes to the methodology will continue redistributing Medicare reimbursement across specialties well beyond CY 2027.

Global Surgery Payment Changes

CMS continues its multiyear effort to reassess payment for services furnished during global surgical periods. CMS proposes reducing payment when a separately identifiable office or outpatient E/M visit is furnished on the same day as a procedure with a zero-, 10- or 90-day global period by the same physician or group practice.

Under the proposal:

• The highest-paid service would continue to receive full payment.
• All remaining surgical procedures or E/M services would be paid at 50 percent.

CMS believes the current methodology duplicates payment for E/M resources already incorporated into global surgical packages. CMS expects this proposal will have a large negative impact on otolaryngology, dermatology, podiatry and, to a smaller extent, hand surgery, physicians' assistant, and colon and rectal surgery. Most other specialties would see a small increase due to the redistribution of those RVUs.

Although targeted primarily at surgical specialties, the proposal would affect any physician who routinely bills Modifier -25 alongside procedures with global periods. The proposal is likely to receive significant attention during the rulemaking process given its potential impact on physician reimbursement.

Global Surgery Data Collection

CMS also proposes pausing additional post-operative visit data collection required under the Medicare Access and CHIP Reauthorization Act while requesting comments on alternative approaches to improving global surgery valuation, including whether physicians should again report CPT Code 99024 more broadly.

E/M Services Complexity Add-On

Instead of paying HCPCS code G2211 as a separate add-on code, CMS proposes converting the code into a modifier that would increase payment for the underlying office or outpatient E/M service by 16 percent. CMS also proposes creating a second modifier, available to clinicians participating in the MSSP and LEAD Model ACOs, that would increase payment for qualifying E/M visits by 32 percent in recognition of the additional resources associated with longitudinal, accountable care.

Rather than increasing payment for G2211, CMS is proposing to fundamentally redesign how longitudinal care is recognized under the PFS. The percentage-based modifier would maintain a consistent payment increase across all E/M levels while further aligning Medicare payment with the agency's broader emphasis on comprehensive, continuous primary care.

Telehealth

CMS proposes several changes intended to continue expanding access to telehealth services following enactment of the Consolidated Appropriations Act, 2026, which continued the geographic and originating site requirement waivers for telehealth visits through CY 2027. Although many of the telehealth flexibilities are extensions required by statute, CMS continues to demonstrate strong support for maintaining broader access to virtual care while refining payment and documentation policies.

Key proposals include:

• adding five new HCPCS G-codes to the Medicare Telehealth Services List
• creating informational modifiers to implement recently extended statutory telehealth flexibilities
• updating descriptors for telehealth critical care consultation services
• modifying teaching physician virtual presence requirements
• increasing the telehealth originating site facility fee to $32.65 for CY 2027

Evaluation of Specific and Potentially Misvalued Codes

CMS proposes work RVU and direct PE updates for more than 50 code families, generally accepting recommendations from the American Medical Association (AMA)/RUC while proposing lower work RVUs in certain instances where CMS believes surveyed physician time has declined or where services have shifted from inpatient to outpatient settings. Notable proposals include restructuring the maternity care code set, increasing payment for tobacco cessation counseling and behavioral health collaborative care management, and establishing national payment for several previously contractor-priced services.

CMS also identifies several services as potentially misvalued, including ultrasonic wound assessment, selected legacy "Harvard-valued" surgical procedures that have not been comprehensively reviewed in more than two decades and several additional procedural services for future evaluation. The agency also solicits comment on several codes without formally designating them as potentially misvalued.

CMS continues its multiyear effort to improve valuation accuracy by reassessing older services, incorporating updated clinical practice patterns and identifying services that may warrant future revaluation. Though many of the proposed changes are technical, they could have meaningful reimbursement implications for affected specialties.

Remote Psychological Monitoring (RPM) and Remote Therapy Monitoring (RTM)

RPM is the remote monitoring of parameters such as weight, blood pressure, and pulse oximetry to monitor a patient's condition and inform their management. RTM is the monitoring of adherence to at home therapeutic interventions. Both RPM and RTM include three components: education and setup, device supply and treatment management. In response to two Office of Inspector General (OIG) reports^{1, 2} identifying potential fraud, waste and abuse in the provision of these services, CMS proposes several modified billing requirements, including:

• limiting RTM eligibility to established patients
• requiring practitioners reporting RPM or RTM to furnish a separately reportable, face-to-face initiating visit
• permitting payment only when RPM or RTM services are performed by clinical staff employed by the practice rather than outsourced to a third-party company

CMS also proposes to update the valuation of these services as it believes devices may be available at a reduced cost compared to initial estimates. Finally, CMS seeks comments about bundling the RPM and RTM CPT codes and creating four new HCPCS G-codes to describe the three components of these services.

These proposals could materially limit RTM and RPM services, particularly if CMS finalizes its proposal to no longer pay for these services when furnished by a third-party company, which is common practice today.

Advance Care Planning (ACP)

CMS proposes two new HCPCS G-codes – GACP1 and GACP2 – to separately recognize clinical staff time furnished incident to a physician or other qualified healthcare professional's ACP services. Under the proposal, existing CPT Codes 99497 and 99498 would be reserved for time personally spent by the billing practitioner, while the new G-codes would capture qualifying clinical staff time furnished under the practitioner's supervision. CMS also proposes adding GACP1 and GACP2 to the Medicare Telehealth Services List and seeks comment on whether a single combined code accounting for both practitioner and clinical staff time would better reflect typical clinical practice.

Comprehensive Outpatient Rehabilitation Facility (CORF) Services-KX Modifier Threshold and Medical Review Threshold

CMS proposes technical corrections to CORF regulations that were left unaligned following CY 2008 rulemaking, with no substantive policy effect. The agency also proposes increasing the CY 2027 KX modifier threshold – which is the per-beneficiary amount above which therapy providers must attest that outpatient physical therapy, speech-language pathology and occupational therapy services remain reasonable and medically necessary – from $2,480 to $2,540, reflecting the proposed 2.5 percent MEI update. The targeted medical review threshold, which is used to flag clinicians for medical review based on billing patterns, claims denial rates and other risk factors, would remain unchanged at $3,000 for CY 2027.

Medicare Prescription Drug Inflation Rebate Program

CMS proposes several targeted refinements to the Medicare Part B and Part D Inflation Rebate Programs established under the Inflation Reduction Act (IRA). The agency emphasizes that these proposals are intended to improve program administration and data quality and are not expected to materially affect aggregate manufacturer rebate liability.

Medicare Part B

CMS proposes to:

• clarify the definition of "first marketed date" for purposes of determining benchmark inflation periods
• establish a methodology for situations in which monthly Consumer Price Index for All Urban Consumers (CPI-U) data are unavailable by using the first available CPI-U following the missing month
• narrow the existing exclusion from the definition of a Part B rebatable drug so that it applies only to certain skin substitute products

Medicare Part D

CMS proposes corresponding CPI-U clarifications while also refining the methodology used to identify 340B-eligible claims associated with AIDS Drug Assistance Programs (ADAPs).

Specifically, CMS proposes treating Part D claims for beneficiaries identified as receiving ADAP supplemental coverage as 340B-eligible while incorporating safeguards to avoid double counting. CMS expects the proposal primarily to affect antiretroviral therapies while having minimal impact on most other therapeutic classes.

Mandatory 340B Repository Reporting

Perhaps the most significant pharmaceutical proposal is CMS' decision to transition from voluntary to mandatory reporting under the Medicare Part D 340B Repository beginning January 1, 2027.

Under the proposal, all 340B covered entities would submit specified Part D claim information on a quarterly basis, including:

• date of service
• prescription reference number
• fill number
• dispensing pharmacy National Provider Identifier (NPI)
• NDC-11
• 340B identification information

CMS intends to use the data submitted to the 340B Repository to evaluate whether 340B units can be reliably identified and ultimately excluded from future Medicare Part D inflation rebate calculations. However, CMS does not propose incorporating repository data into rebate calculations at this time. Instead, the agency would continue relying on the existing Prescriber-Pharmacy Methodology while assessing the completeness and reliability of the submitted data for potential future use.

Although largely technical, these proposals continue CMS' efforts to strengthen implementation of the IRA while improving the accuracy of inflation rebate calculations. Mandatory 340B repository reporting represents the most operationally significant proposal for covered entities.

Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs to Provide Refunds with Respect to Discarded Amounts

Manufacturers are required to refund CMS for certain discarded amounts from refundable single-dose container or package drugs. CMS received one application requesting an increased applicable percentage from the default 10 percent from the manufacturer of Leukine®, who has previously applied. The manufacturer cited clinical trials using a small dose and a U.S. Department of War Medical Product Priority designation. CMS proposes declining an increase in the applicable percentage for Leukine® for 2027, citing the absence of qualifying unique circumstances. The agency notes the manufacturer may apply again when more information, such as U.S. Food and Drug Administration-approved labeling reflecting new indications or dosages, becomes available. CMS reported that discarded drug refunds owed for CY 2023 and CY 2024 quarters totaled more than $173 million.

Skin Substitute Payment Policy

CMS does not propose revisiting the national payment methodology for skin substitutes that it finalized in the CY 2026 PFS final rule. As a result, the proposal largely maintains the existing payment framework established last year.

The principal policy change would extend the national payment methodology to certain non-sheet skin substitute products that are currently priced by Medicare Administrative Contractors (MACs). CMS explains that the resource costs associated with non-sheet products are generally comparable to those of sheet-form products and therefore proposes paying these products using the same nationally established payment methodology rather than contractor-specific pricing.

CMS also proposes a technical revision to the Medicare Part B Drug Inflation Rebate Program that would narrow the existing exclusion for skin substitutes. Under the proposal, skin substitute products licensed as biological products under Section 351 of the Public Health Service Act would be treated as Part B rebatable drugs and, therefore, become subject to Medicare inflation rebate requirements and beneficiary coinsurance adjustments. CMS notes, however, that no currently marketed skin substitute products are licensed under Section 351, meaning the proposal would have no immediate practical impact on currently available products.

Clinical Laboratory Fee Schedule

CMS proposes several technical updates implementing the Consolidated Appropriations Act, 2026.

The proposal:

• updates laboratory data reporting periods
• extends payment reduction caps through CY 2029
• revises regulatory definitions to conform to statutory changes
• maintains the phased implementation of private-payor-based payment reductions, limiting reductions to 15 percent annually during CYs 2027 through 2029

CMS also proposes technical corrections to specimen collection fee regulations.

Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

CMS proposes several changes intended to improve access to preventive services.

Key proposals include:

• recognizing Diabetes Self-Management Training and Medical Nutrition Therapy as stand-alone billable visits for RHCs
• increasing the FQHC Prospective Payment System base rate by approximately 2.5 percent
• extending telehealth flexibilities authorized by the Consolidated Appropriations Act, 2026
• making several technical regulatory corrections

Medicare Eligibility

CMS proposes implementing statutory changes limiting Medicare eligibility to:

• U.S. citizens
• U.S. nationals
• lawful permanent residents
• certain Cuban-Haitian entrants
• specified Compact of Free Association beneficiaries

The proposal also creates a new six-month Special Enrollment Period for individuals who later become eligible because of changes in immigration status.

Ambulance Fee Schedule (AFS)

CMS proposes several updates to the AFS, including conforming regulatory changes to reflect statutory extensions enacted under the Consolidated Appropriations Act, 2026, updates to geographic payment classifications and technical revisions to ambulance payment policies.

Extension of Ambulance Add-On Payments

Consistent with Section 6203 of the Consolidated Appropriations Act, 2026, CMS proposes to continue the existing temporary Medicare ambulance add-on payments through December 31, 2027. Specifically, the proposal would maintain the 3 percent payment increase for ground ambulance transports originating in rural areas, 2 percent increase for transports originating in non-rural areas and 22.6 percent Super Rural Bonus for transports originating in qualified rural areas – those located in the lowest 25th percentile of rural population density. CMS notes that these statutory extensions are self-implementing and proposes corresponding regulatory changes to align the regulations with current law.

Ground Ambulance Data Collection

CMS does not propose substantive changes to the Medicare Ground Ambulance Data Collection System in this rule. Instead, the agency indicates it will consider recommendations included in MedPAC's June 2026 Report to Congress and expects to address potential changes through future rulemaking, including the CY 2028 PFS.

Updated Geographic Classifications

Beginning in CY 2027, CMS also proposes to update the geographic classifications used to determine ambulance payment by adopting the latest U.S. Office of Management and Budget metropolitan statistical area delineations based on the 2020 Census and American Community Survey data, as well as the July 2025 Rural-Urban Commuting Area (RUCA) codes. CMS would continue to classify census tracts with a RUCA score of 4.0 or greater as rural for payment purposes but declines to adopt the Health Resources and Services Administration's alternative methodology for certain low-density RUCA 2 and 3 census tracts, citing operational and administrative challenges.

MIPS

CMS proposes to sunset traditional MIPS reporting beginning with the 2029 performance year and transition clinicians to MVPs as the primary reporting framework. The agency proposes adding three MVPs – Diabetic Disease, Hypertension and Hospitalist – for 2027 and modifying every MVP to include MIPS core measures. Rather than reporting an outcome measure, clinicians reporting traditional MIPS and MVPs would be required to report at least one MIPS core measure. CMS would maintain the existing MIPS performance threshold through the CY 2028 performance year while continuing its broader transition toward specialty-focused reporting pathways.

The agency also proposes several changes to the Promoting Interoperability requirements, including:

• removing the Office of the National Coordinator for Health Information Technology attestations for the CY 2026 performance period
• removing the Security Risk Analysis measure for the CY 2027 performance period
• making the Electronic Prior Authorization measure an optional bonus measure for the CY 2027 performance period and requiring it beginning in CY 2028
• creating a new Electronic Prior Authorization for Prescription Drugs measure that would become mandatory in CY 2028

The transition to mandatory MVP reporting will carry significant potential burden and compliance implications for all clinicians but especially for large, multispecialty practices because they are unable to participate in MVPs as a group. Instead, they will need to form subgroups that share a clinical focus area to report MVPs.

Advanced APM Determinations

CMS proposes to evaluate Advanced APM Qualifying Participant status at the Taxpayer Identification Number (TIN)/National Provider Identifier (NPI) combination level, rather than solely at the individual NPI level. Under the proposal, APM incentive payments and the applicable PFS conversion factor updates would apply only to services furnished through a clinician's APM-participating Taxpayer Identification Number (TIN). CMS estimates that this policy would reduce Advanced APM incentive payments by approximately $2.38 billion over the next decade while more closely aligning payment adjustments with clinicians' participation in qualifying APM entities.

MSSP

CMS proposes one of the most significant sets of changes to the MSSP since the transition to the current participation tracks. The proposals are intended to strengthen incentives for ACOs, encourage greater participation in downside risk, improve beneficiary engagement and simplify administrative requirements.

Strengthening Financial Incentives

CMS proposes increasing the BASIC Track Level E shared savings rate from 50 percent to 60 percent for agreement periods beginning on or after January 1, 2027. CMS notes that although approximately 58 percent of ACOs currently participate in the ENHANCED track, BASIC Track Level E ACOs have generated greater net savings to the Medicare Trust Funds per dollar of gross savings, supporting a stronger incentive for organizations assuming downside risk.

CMS also proposes several refinements to benchmarking and financial methodology, including:

• increasing the prior savings adjustment scaling factor from 50 percent to 75 percent
• risk-adjusting the 5 percent cap on upward benchmark adjustments
• creating a growth adjustment to encourage formation of new ACOs
• revising the Accountable Care Prospective Trend methodology to improve benchmark accuracy across agreement periods

Expanding Beneficiary Engagement

CMS proposes allowing eligible MSSP ACOs to reduce or eliminate Medicare Part B cost sharing for assigned beneficiaries beginning April 1, 2027, subject to CMS approval.

The proposal would allow ACOs to waive or reimburse beneficiary cost-sharing for most Part B services (excluding drugs and durable medical equipment) when tied to specified clinical goals. Participating ACOs – not Medicare – would finance these incentives.

Simplifying CEHRT Requirements

Recognizing continued administrative burden, CMS proposes simplifying CEHRT participation requirements by allowing ACOs to satisfy the requirement through one of three pathways, including electronic clinical quality measure reporting or attestation regarding Fast Healthcare Interoperability Resources (FHIR)-enabled certified health information technology (IT).

Beneficiary Assignment

CMS also proposes modifying beneficiary assignment by:

• better recognizing services furnished by physicians participating in both ACO and non-ACO TINs
• allowing beneficiaries with only Part A or Part B enrollment during portions of the year to remain eligible for assignment

CMS estimates these changes could increase beneficiary assignments while reducing distortions created by physician billing arrangements.

Ambulatory Specialty Model (ASM)

CMS continues implementation of the mandatory ASM while proposing several technical refinements.

Major proposals include:

• new participation and eligibility policies
• updated quality measures, including a claims-based lumbar spine imaging measure
• new patient-reported outcome incentives
• phased implementation of electronic prior authorization reporting
• rural scoring adjustments
• technical updates governing payment adjustments and collaborative care arrangements

Although largely operational, these proposals continue CMS' effort to refine the Innovation Center's mandatory specialty-focused payment model before implementation.

Artificial Intelligence (AI)- and Technology-Enabled Care

One of the more notable themes throughout the proposed rule is CMS' growing focus on AI- and technology-enabled care delivery. Rather than proposing immediate payment changes, the agency seeks extensive stakeholder input regarding the appropriate role of ambient documentation tools, clinical decision support technologies, AI-enabled Annual Wellness Visits and technology-assisted primary care. Collectively, these requests suggest CMS is beginning to consider how physician payment policy should evolve as AI becomes increasingly integrated into clinical practice and may foreshadow future payment and quality measurement reforms.

Major RFIs

In addition to the numerous payment and policy proposals included in the CY 2027 PFS proposed rule, CMS issued several significant RFIs that signal areas where the agency may pursue future rulemaking. Though these RFIs do not establish new policy, they provide insight into CMS' longer-term priorities related to physician payment, primary care, interoperability, coding and care delivery.

Redesigning Primary Care to "Make America Healthy Again"

CMS devotes an extensive RFI to redesigning Medicare primary care payment, arguing that the current PFS does not adequately recognize the value of longitudinal, relationship-based care or sufficiently reward prevention and chronic disease management.

CMS seeks stakeholder input on several potential reforms, including:

• whether Medicare should distinguish longitudinal primary care from episodic or consultative visits through new HCPCS or CPT codes
• whether existing care management services – including Chronic Care Management, Principal Care Management, Transitional Care Management and Advanced Primary Care Management – should be simplified or consolidated
• whether payment should evolve toward prospective or capitated primary care models within the MSSP and, eventually, Original Medicare
• how ambient documentation, clinical decision support and other AI tools should affect physician payment, documentation requirements and quality measurement
• whether Medicare should ultimately establish a "primary care global period" that bundles E/M services, Annual Wellness Visits and care management activities into prospective payments

Although CMS is not proposing immediate payment changes, the RFI signals continued movement toward prospective, value-based primary care payment and greater recognition of technology-enabled longitudinal care. The discussion also suggests that AI-supported clinical workflows may become an increasingly important consideration in future Medicare payment policy.

CPT and RUC Reform

Perhaps the most notable RFI in the proposed rule concerns CMS' long-standing reliance on the AMA's CPT Editorial Panel and AMA/RUC.

CMS requests comments on several fundamental questions, including:

• whether the current CPT code development process appropriately reflects medical necessity and modern clinical practice
• whether the AMA's oversight of CPT licensing creates barriers to innovation or patient care
• potential alternatives to the current CPT and RUC processes
• whether physician payment could eventually be based on International Classification of Diseases, Tenth Revision, Procedure Coding System procedure codes rather than CPT
• alternative governance structures that could improve transparency, competition and innovation in physician payment policy

Though CMS is not proposing to replace CPT, the breadth of the RFI is notable. The agency is openly questioning the long-standing foundation of physician coding and valuation and seeking stakeholder input on whether alternative coding and payment frameworks should be considered. Any future reforms would represent one of the most significant structural changes to the Medicare PFS since its inception.

Duplicate Laboratory Testing, Imaging and Interoperability

CMS also issued an extensive RFI addressing duplicate laboratory and diagnostic imaging services, identifying fragmented electronic health record systems and poor interoperability as significant contributors to unnecessary testing, increased Medicare spending, delayed care and avoidable patient radiation exposure.

CMS is considering several policy approaches to reduce unnecessary duplicate testing, including:

• clarifying Medicare billing instructions defining duplicate laboratory and imaging services
• implementing MAC payment edits to deny or reduce payment for duplicative testing
• expanding payment integrity tools to identify and recover payments associated with unnecessary duplicate services
• establishing frequency limitations for selected laboratory and imaging services where clinically appropriate

CMS recognizes that repeat testing is often medically necessary – including trauma, emergency care and rapidly evolving clinical situations – and specifically requests comment on appropriate documentation requirements, clinical exceptions and which services, if any, should be subject to utilization limits.

Improving Diagnostic Interoperability

Beyond payment policy, CMS frames duplicate testing as a symptom of long-standing interoperability challenges. The agency cites continued reliance on CDs and DVDs, fragmented patient portals, inconsistent implementation of national interoperability standards and limited adoption of API-enabled technologies.

CMS requests comments on several potential policy options, including:

• incentives to accelerate adoption of interoperability standards
• conformance testing and certification tools
• accountability policies for providers that fail to share diagnostic results, resulting in avoidable repeat testing
• whether Medicare should establish a minimum national standard for sharing laboratory and imaging results, including structured FHIR R4 Diagnostic Reports through a USCDI+ framework, as a condition of Medicare payment
• whether participation in a national interoperability network should become a Medicare Condition of Participation for hospitals while acknowledging that Medicare termination may be a disproportionate enforcement mechanism

Although CMS is not proposing new interoperability requirements, the RFI signals increasing agency interest in reducing unnecessary imaging and laboratory utilization through improved data exchange rather than utilization management alone. Future rulemaking could have significant implications for providers, health systems, imaging centers, laboratories and health IT developers.

Community-Based Palliative Care

CMS seeks comment on whether Medicare should develop a broader community-based palliative care benefit outside the existing hospice framework.

The agency requests input on beneficiary eligibility, covered services, care management requirements, quality measurement, payment methodology, and safeguards against fraud and abuse. CMS is coordinating this effort with similar RFIs included in the fiscal year 2027 Hospice and End-Stage Renal Disease proposed rules.

Alzheimer's Disease Prevention

CMS also requests comment on developing Medicare coverage for intensive lifestyle interventions intended to reduce the risk of Alzheimer's disease and related dementias.

Specifically, CMS seeks feedback regarding:

• appropriate beneficiary eligibility criteria
• required intervention components
• supervision requirements
• biomarker testing
• duration and frequency of services
• integration with future Innovation Center models evaluating dementia prevention strategies

QPP RFIs

CMS also seeks feedback about three topics related to MIPS and APMs, including:

• a two-year transition to FHIR digital quality reporting beginning with the 2028 performance period
• a new MVP scoring methodology that would normalize scores by comparing clinicians in a given MVP against other clinicians in the same MVP beginning with the 2029 performance period
• revising the star rating assignment for certain publicly reported quality measures

For more information or questions, please contact the authors.

Notes

¹ OIG, "Additional Oversight of Remote Patient Monitoring in Medicare Is Needed" (Sept. 19, 2024).

² OIG, "Billing for Remote Patient Monitoring in Medicare" (Aug. 25, 2025).

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