Cut to Physician Fee Schedule compounds proposed 340B drug cuts and Medicaid reductions
ALEXANDRIA, VA – AMGA objected to Medicare Part B reimbursement rates that continue to be eclipsed by the rising costs of caring for patients. In comments to the Centers for Medicare & Medicaid Services (CMS) on the proposed Calendar Year (CY) 2027 Physician Fee Schedule (PFS) rule, AMGA warned proposed changes could force AMGA members to implement cutbacks.
CMS is proposing a decrease to the Medicare Part B conversion factor: $33.17 for Qualifying Alternative Payment Model (APM) Participants, a 1.19% cut from CY 2026, and $32.84 for non-qualifying APM participants, a 1.68% cut. In addition, CMS is proposing a 50% reimbursement reduction for separately identifiable, same-day office/outpatient evaluation and management (E/M) visit furnished by the same physician as part of a global procedure.
Current law and CMS’ other pending CY 2027 rules compound the pressure: The proposed Outpatient Prospective Payment System Rule would cut 340B drug payments to health systems by billions of dollars, while the One Big Beautiful Bill Act is already cutting an estimated $1 trillion from Medicaid over the next decade.
“Every cut looks survivable on its own. But CMS keeps cutting into physician reimbursement, into drug reimbursement, just as Medicaid is facing significant cuts— and every strand they cut brings the system closer to snapping,” said Jerry Penso, MD, MBA, president and chief executive officer of AMGA.
AMGA’s letter addressed several issues in the proposed rule.
Payment policy
- Conversion Factor: The proposed CY 2027 conversion factors represent yet another reduction in Medicare physician reimbursement. AMGA urges CMS and Congress to pursue durable, structural reform rather than continued reliance on short-term legislative patches.
- Practice Expense Methodology: AMGA urged CMS to proceed cautiously on its proposed overhaul of the practice expense methodology, warning that stacking multiple untested changes at once risks unpredictable payment swings across specialties and sites of care.
- G2211: AMGA raised concerns with CMS’ plan to convert the G2211 add-on code into a percentage-based modifier, warning it would create two different payment levels for functionally identical visits based solely on a physician's participation in a value-based payment model.
Value-based care and quality reporting
- Ambulatory Specialty Model (ASM): AMGA renewed its objection to the model’s mandatory participation, low patient-attribution threshold, and overlap with existing programs, saying CMS’ proposed technical fixes don't address the underlying structural problems.
- Quality Payment Program (QPP): AMGA warned that CMS’ proposal to sunset traditional Merit-based Incentive Payment System (MIPS) in favor of mandatory MIPS Value Pathways would increase administrative burden and fragmentation for multispecialty groups and urged CMS to delay the transition.
Access and care delivery
- Telehealth and Teaching Physicians: AMGA supported CMS’ proposed expansion of virtual presence for teaching physicians, calling it a needed flexibility that preserves appropriate supervision.
- Remote Monitoring (RPM/RTM): AMGA cautioned that proposed program-integrity restrictions on remote physiologic and therapeutic monitoring could unintentionally cut off small and rural practices from clinically integrated care arrangements.
- Advance Care Planning: AMGA backed CMS’ proposal to separately pay for advance care planning services furnished by clinical staff, urging the agency to avoid new visit requirements that could create barriers to these conversations.
“AMGA’s MACRA and Value-Based Care Task Force has laid out a clear path forward: Tie reimbursement to the real cost of care, reward the value-based work our members are already doing, and stop relying on a last-minute fix from Congress every year,” said Dr. Penso. “CMS and Congress have that roadmap. It’s time to use it.”
The full letter is available on AMGA’s website.
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About AMGA
AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high-performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans.