CMS CY2027 Medicare Physician Fee Schedule Proposed Rule
The Centers for Medicare & Medicaid Services (CMS) released their CY2027 Medicare Physician Fee Schedule Proposed Rule. After 2026’s across-the-board cuts to Medicare rates for specialty procedures, CMS is now proposing an even deeper round of cuts for several dozen surgical procedures, including joint arthroplasty. CMS says it is “Modernizing Medicare Physician Payments” by changing rates “to better reflect modern medical practice and support the Trump administration’s goal of shifting from sick care to health care.”
The proposed cuts are framed as reforms of methods for calculating inputs. This impacts physician work, practice expense and medical malpractice insurance of wRVUs. CMS says that RUC proposed reductions do not go far enough.
Background
- Medicare physician reimbursement for total hip and knee replacement has been slashed by over 55% from 2005-2025
- Physician fees account for less than 10% of the cost of a lower joint replacement, yet improvements to patient outcomes and reduced overall costs have been accomplished by surgeons doing more work for less pay. Even if these drastic cuts to physicians are implemented, the total cost of a joint replacement will hardly change, as hospital payments are being INCREASED through inflation adjustments.
Pushing Back
AAHKS leadership is committed to employing a multi-pronged strategy to push back against some of the most draconian cuts in the history of the RVU system which will threaten access for THA and TKA patients. We need our members’ help. If you have personal connections with patient groups, government affairs contacts within industry, or congressional offices, please let us know. We also ask that you reach out to your own congressional leaders to let them know of the impending crisis of access to quality of arthroplasty care if these cuts are finalized.
AAHKS feels the data CMS has used to calculate the number postoperative minutes and visits are flawed and we have several publications supporting our position.
As we have improved the care of our THA and TKA patients by reducing hospital length of stay, the number of minutes our clinical teams spend in person, on the phone and communicating electronically with patients in the postoperative period has markedly increased and should be accounted for in CMS calculations. CMS is using our improved care and efficiency against us.
Total Proposed 2027 Rates for THA & TKA
- CMS continues to express concerns over the AMA RUC’s reliance for practice expense values on “resource-intensive but ultimately unreliable surveys with low response rates asking for expert estimates that present significant discrepancies with alternative empirical data sources.”
- Preliminary Summary of CMS CY 2027 Medicare Physician Fee Schedule Proposed Rule
Proposed 2027 Changes to Physician Rate Inputs
- In the OPPS/ASC proposed rule, payment to HOPDs is proposed to go up by more than 10%, incentivizing sick care at the hospital level but punishing surgeons for efficiency.
- Comment Letter: CY2027 Medicare Hospital Prospective Payment System and Ambulatory Surgical Center Payment System (OPPS & ASC) Proposed Rule
Next Steps
Donate to the OrthoPAC
Click the link above, or text AAHKS to 41444 and donate to your Orthopaedic PAC today!
AAHKS’ Next Steps
- Collaborating with AAOS to coordinate letters, actions and meetings with the Administration and Congress.
- Preparing member action letters to CMS and Congress, urging rejection of these proposed cuts.
- Meetings with White House, HHS, CMS and Congress are in the works.
- Working with patient advocacy groups for arthritis and our colleagues in industry for their support.
- The formal, detailed, well-documented AAHKS Comment Letter on the MPFS, will be submitted to the docket prior to the Sept. 14 deadline.
- As it is an election year, we are exploring a political response to correct this misguided change.
IPPS & CJR-X Comment Letter
2027 Medicare Inpatient Prospective Payment System Proposed Rule & CJR-X Model
Concerns on CJR-X proposals include:
- Too many providers are untested and unprepared for VBC to accept 20% risk in an episode payment model.
- Lack of ASC participation undermines the success of the model.
- The continued lack of a convening role for physicians and mandatory shared savings with surgeons will further drive consolidation and drive more physicians out of independent practice.
Comments on TEAM updates include:
- Creating a separate episode benchmark for procedures performed at the ASC based on ASC-specific cost experience, and carefully analyze this data for several years before considering a benchmark combining ASC and HOPD procedures
- Utilizing AJRR for quality reporting for TEAM and CJR-X
- Excluding ASCs in TEAM undermines its success
- AAHKS favors an opt-in period for POHs to join TEAM
Additional Payment Resources
PCM Resources
Capture and bill for pre-optimization time
- AAHKS PCM Primer for Capturing Pre-Optimization Care in TJA
- AAHKS Webinar: Getting Reimbursed for TJA Pre-Optimization Work with Principal Care Management Code
Pros and Cons of Opting out of Medicare
Utilizing CPT Code G2211
While CMS intended this code primarily for use by primary care providers, this code may be applied by any clinician who bills Medicare when the proper conditions are met. For the orthopaedic surgeon, G2211 can apply at an outpatient office evaluation and management (E/M) visit when providing “medical care services that are part of ongoing care related to a patient’s single, serious condition or complex condition.” When this code is used, it is reimbursed at 0.33 wRVU in addition to the E/M billing without any additional documentation requirements.