FFY 2027 PFS proposed rule: Comments due Sept. 14

Annual updates under the 2027 PFS proposed rule

On July 14, Centers for Medicare and Medicaid Services released the calendar year (CY) 2027 proposed rule for the Medicare Physician Fee Schedule (PFS). The proposed rule reflects the annual updates to the Medicare fee-for-service (FFS) physician payment rates and policies. In addition to the regular updates to the conversion factor and geographic practice cost indexes (GPCIs), the rule includes proposed policies impacting, but not limited to:

• Relative Value Unit (RVU) updates;
• Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs);
• Medicare Prescription Drug Inflation Rebate Program;
• Ambulatory Specialty Model (ASM);
• limiting Medicare coverage based on citizenship status;
• Medicare Shared Savings Program (MSSP);
• Ambulance Fee Schedule (AmFS); and
• PFS Quality Payment Program updates.

Proposed program changes would be effective for services provided on or after Jan. 1, 2027, unless otherwise noted. Comments on this proposed rule are due to CMS by Sept. 14.

Key changes under the proposed rule

1. Strategies to improve payment transparency, accuracy and congruency

To eliminate burden on providers caused by the Medicare Access and CHIP Reauthorization Act of 2015-mandated data collection requirements for global surgical packages, CMS is proposing to pause the data collection on CPT code 99024. With this, CMS is seeking comments on several components, including the best use and collection of the data, other data sources to consider and other approaches to providing transparency.

2. Advanced Care Planning (ACP) services

As CMS believes that ACP services may be under-utilized, it is proposing new coding that could more accurately value work of the billing practitioners for time spent by clinical staff in the provision of these services.

For CY 2027, CMS is proposing the creation of two new Healthcare Common Procedure Coding System (HCPCS) codes (GACP1 and GACP2) to represent ACP services provided by clinical staff under the direct supervision of the billing practitioner, and to limit the use of CPT codes 99497 and 99498 to the reporting of a the time spent by billing practitioners themselves.

3. Ambulatory Specialty Model (ASM)

ASM is a mandatory Alternative Payment Model tested by CMS that will have five performance years that begin on Jan. 1, 2027 and end on Dec. 31, 2031. Based on feedback and internal technical review, CMS is proposing to modify ASM by providing more guidance on/exceptions to participation, revising definitions/regulatory text, changing data submission requirements, and adjusting scoring and benchmarks.

4. Limiting Medicare coverage of certain individuals

CMS is proposing to revise Medicare eligibility criteria related to the Social Security Act. Specifically, “to establish Medicare-specific definitions and related enrollment and termination criteria concerning citizenship, nationality, and immigration status.”

CMS issued several proposals, including: "amending the Eligibility Criteria for Part A and Part B; termination of Entitlement for Individuals Who Were Entitled to, or Enrolled for, Medicare as of July 4, 2025, in Accordance With Section 71201 of the WFTC Legislation (‘‘Grace Period’’ Population); proposed Termination Process for Certain Noncitizens Entitled to, or Enrolled for, Medicare Who Were Not Identified and Notified by the SSA per Section 1899C(b)(2) of the Act (Outside of the ‘‘Grace Period’’ Population); enrollment Pathway for Individuals Who Gain or Regain Eligibility; and limiting Coverage Under Medicare Part C, Medicare Part D and Cost Plans to Certain Individuals.”

5. Medicare Shared Savings Program (MSSP)

CMS is proposing to allow Accountable Care Organizations (ACOs) to reduce Part B cost sharing and revisions to beneficiary assignment, use requirements and quality standards. In addition, CMS is proposing to modify the calculation methodology and MSSP beneficiary notification requirements. CMS also issued an RFI on specialty care in MSSP.

6. Transforming the Quality Payment Program (QPP) proposal

CMS is proposing new measures within the improvement activities performance category and sunsetting the traditional MIPS reporting option, which would make MVPs the only reporting option for MIPS beginning with the 2031 MIPS payment year.

What’s ahead

Proposed program changes for CY 2027 would be effective on or after Jan. 1, 2027, unless otherwise noted. Comments are due by Sept. 14, leaving hospitals a narrow window to evaluate the PFS proposed rule impact and respond.