Released July 14, 2026 | Comment period open through September 14, 2026
Summary
On July 14, 2026, CMS released the CY 2027 Medicare Physician Fee Schedule (PFS) and Quality Payment Program (QPP) proposed rule. The proposal includes updates to the Medicare conversion factors, quality reporting requirements, and the Merit-based Incentive Payment System (MIPS). CMS estimates physician payment reductions in 2027 despite positive statutory updates, largely due to the expiration of the temporary 2.5% update applied in CY 2026. The public comment period is open through September 14, 2026, with a final rule expected later this fall.
Background
Beginning in CY 2026, MACRA established separate conversion factors for qualifying Alternative Payment Model (APM) participants and non-qualifying APM participants. CMS is proposing CY 2027 conversion factors that reflect three moving pieces: (1) removal of the temporary 2.5% update enacted for CY 2026, (2) a positive budget neutrality adjustment of 0.53%, and (3) the statutory MACRA updates of 0.75% for qualifying APM participants and 0.25% for non-qualifying APM participants.
Key Proposed Changes
- Qualifying APM conversion factor: $33.1693, a 1.19% decrease from CY 2026
- Non-qualifying APM conversion factor: $32.8409, a 1.68% decrease from CY 2026
- Positive budget neutrality adjustment of 0.53%, offset by removal of the temporary 2.5% CY 2026 statutory update
- Traditional MIPS reporting proposed to sunset beginning with the 2029 performance period, transitioning clinicians to MIPS Value Pathways (MVPs)
- Three new proposed MVPs focused on Diabetes, Hypertension, and Hospital-Based Care
- New MIPS Core Measure requirement proposed for both traditional MIPS and MVP participants, with a proposed small-practice exemption
- Changes to Promoting Interoperability requirements, including removal of the Security Risk Analysis measure from the category (HIPAA compliance obligations remain separately required)
- Proposed updates to Advanced APM policies, including changes to Qualifying Participant (QP) determinations
How Does This Impact Our Clients?
While CMS projects RVU changes will generate approximately a 1% increase for Emergency Medicine services, the statutory conversion factor changes result in an estimated overall payment reduction of approximately 1.25% for non-APM emergency medicine providers in 2027 relative to 2026. Organizations participating in Advanced APMs will see a smaller reduction, given the comparatively higher qualifying APM conversion factor.
For Radiology, CMS’s proposed rule impact tables show an estimated combined impact on total allowed charges of approximately +2% for diagnostic radiology and nuclear medicine, and approximately +3% for interventional radiology and radiation oncology.
Anesthesiology and Hospital Medicine specialty-specific impacts remain under review; we will share detailed findings for both as our analysis progresses. Because RVU reallocation is budget-neutral, the net effect can vary meaningfully by specialty mix and site of service even where the headline conversion factor is the same, so we do not expect the EM impact to be directly representative of the other business units.
Implications for Providers
Hospital-based specialties, including emergency medicine, anesthesiology, radiology, and hospital medicine, may experience additional Medicare reimbursement pressure in 2027. Organizations participating in advanced APMs will experience a smaller reduction than non-APM participants. Practices should also prepare for future quality reporting changes and evaluate the operational impact of the proposed MIPS modifications, including the new Core Measure requirement and the shift toward MVPs ahead of the 2029 sunset of traditional MIPS.
Additional Considerations
- Proposed vs. final: CMS conversion factors and RVU impacts commonly shift between the proposed and final rule; we recommend flagging these figures to clients as preliminary and confirming again once the final rule is published this fall.
- APM status matters: clients should confirm their current Qualifying APM Participant status, since the gap between the two conversion factors (roughly $0.33, or about 1%) is a meaningful swing year-over-year.
- Specialty-specific modeling: given the EM and radiology estimates above, a similar RVU-and-CF pass for anesthesiology and hospital medicine (consistent with our existing client benchmarking work) will give clients a comparable, defensible impact figure rather than an extrapolation from the EM or radiology numbers.
- Comment period: the September 14, 2026 comment deadline is an opportunity to weigh in on the MVP transition timeline, the new Core Measure requirement, and QP determination changes before they are finalized.
Key Takeaways
- Medicare physician payments remain under pressure despite positive statutory updates.
- Emergency medicine is expected to see an estimated net payment reduction of approximately 1.25% for non-APM participants; radiology is expected to see an estimated combined impact of approximately +2% to +3% depending on service category; anesthesiology and hospital medicine impacts remain under review.
- CMS continues to advance quality reporting reform through the planned sunset of traditional MIPS and expansion of MVPs.
- Providers should evaluate financial and operational impacts and consider submitting comments to CMS before the September 14, 2026 deadline.
How Can Ventra Help?
Ventra continues to monitor regulatory and reimbursement developments impacting hospital-based physician groups. Our teams evaluate proposed payment policy changes, assess specialty-specific impacts, and help clients understand the potential operational and financial implications of evolving Medicare reimbursement policies. A more detailed analysis and specialty-specific recommendations will be shared in the coming weeks as our review of the full proposed rule progresses.
