On July 14, 2026, the Centers for Medicare & Medicaid Services (CMS) issued the Calendar Year 2027 Medicare Physician Fee Schedule proposed rule (CMS-1848-P). The proposal introduces significant changes to physician reimbursement, quality payment obligations, and telehealth delivery that will affect healthcare providers, payors, and their patients across the country. Stakeholders should begin assessing operational, financial, and compliance implications now, well in advance of the September 14, 2026 comment deadline.
At the center of the proposal are updated conversion factors for the Physician Fee Schedule (PFS). CMS proposes a conversion factor of $33.1693 for qualifying Alternative Payment Model (APM) participants and $32.8409 for non-qualifying participants. These reductions signal continued downward pressure on Medicare Part B reimbursement and will require providers to reevaluate service line profitability, staffing models, and contract terms with commercial payors that benchmark against Medicare rates. Practices heavily dependent on Medicare volume should model the projected revenue impact and consider whether participation in an Advanced APM offers a favorable path forward.
The proposed rule also contemplates meaningful changes to the Merit-based Incentive Payment System (MIPS) and alternative payment model participation. Providers subject to MIPS should closely review the proposed measure sets, performance category weights, and scoring methodologies to understand how the changes may affect their composite performance scores and associated payment adjustments. Organizations currently participating in, or considering entry into, an APM should evaluate how the proposed modifications may alter thresholds, incentives, and reporting expectations.
In a notable development for care delivery, CMS proposes to extend Medicare telehealth flexibilities that permit beneficiaries to receive covered services in their homes through December 2027. This extension provides welcome continuity for providers that have integrated virtual care into their clinical workflows and offers additional runway for organizations to invest in compliant telehealth infrastructure, patient engagement tools, and workforce training.
Public comments on CMS-1848-P are due by September 14, 2026. Providers, health systems, medical groups, payors, and industry associations should consider submitting comments to shape the final rule, particularly on provisions affecting reimbursement, quality reporting, and telehealth.
This update is provided for general informational purposes and does not constitute legal advice. Clients should consult counsel for guidance tailored to their specific circumstances.