Health Law Daily Wrap Up, HEALTH CARE REIMBURSEMENT NEWS—CMS recalibrated physician payments to favor coordinated care and curb duplicative spending, (Nov 5, 2026)

By WK Editorial Staff

The CY 2027 Medicare Physician Fee Schedule final rule revised payment, coding, quality, and accountable-care policies to strengthen primary care and prevention while tightening payment integrity.

CMS finalized broad changes to Medicare Part B payment that redirected resources toward longitudinal, preventive, and coordinated care while reducing payments that the agency viewed as duplicative or poorly aligned with current practice. The CY 2027 Medicare Physician Fee Schedule final rule adjusted valuation and billing policies, expanded payment pathways for several care-management and preventive services, revised quality-program requirements, and reshaped Medicare Shared Savings Program incentives. CMS said the package was intended to move Medicare away from fragmented, volume-driven care and toward health maintenance, accountability, and fiscal stewardship.

Payment policy targeted duplication and outdated valuation. CMS finalized a 20 percent payment reduction for all but the highest-valued service when same-specialty practitioners furnished an office or outpatient evaluation and management visit on the same day as a procedure with a zero-day global period. The agency concluded that the payment for the procedure already accounted for some clinical labor and practice expense also reflected in the visit payment. The reduction therefore sought to avoid paying twice for overlapping work while preserving full payment for the highest-valued service.

The rule also replaced HCPCS code G2211 with two longitudinal-care modifiers. Modifier B1 paid 16 percent of the base evaluation and management service, while modifier B2 paid 32 percent for qualifying clinicians participating in the Shared Savings Program, the Long-term Enhanced ACO Design model, or ACO Primary Care Flex. CMS used the tiered approach to better recognize the continuing responsibility associated with longitudinal relationships and to provide stronger support where clinicians operated within accountable-care arrangements.

For skin substitutes, CMS established a national payment rate of $127.14 per square centimeter for non-sheet products, matching the rate for sheet products, and assigned national rates to related application codes. The agency sought a more consistent payment methodology across products that performed comparable clinical functions.

New and revised codes supported preventive and team-based care. CMS established national payment for health and well-being coaching under general supervision and revised the work values for the associated services. It also created payment for shared medical appointments through a base code and a time-based add-on code. The policy permitted sessions involving two to 10 patients, lasting up to 120 minutes, with one session per beneficiary each week. These changes recognized structured group care and coaching as separately payable services rather than leaving them dependent on local pricing or other billing pathways.

The agency increased work relative value units for smoking-cessation counseling and screening, brief intervention, and referral to treatment services by 19.1 percent. It also increased valuations for psychiatric collaborative-care services and raised the assumed labor rate for care managers to $0.70 per minute. CMS determined that the earlier values did not adequately reflect the work and staffing resources required for these services.

CMS also finalized a code for services addressing suspected adverse effects of vaccines. The code covered the clinical time needed to diagnose, treat, and counsel a patient. In its press release, CMS described the new billing pathway as support for patient trust and clinical care when patients experienced suspected vaccine-related effects.

Quality programs moved toward specialty pathways and digital reporting. For the Quality Payment Program, CMS added three MIPS Value Pathways focused on diabetic disease, hospitalists, and hypertension and modified 27 existing pathways. The rule also removed 20 quality measures that CMS found were topped out, duplicative, outdated, insufficiently supported, or unable to produce meaningful performance distinctions. CMS retained or revised measures when they remained clinically relevant and capable of supporting consistent reporting.

CMS set a longer transition from traditional MIPS reporting to MIPS Value Pathways. As stated in the agency’s press release, traditional MIPS reporting was scheduled to end with the CY 2031 performance period, giving clinicians through CY 2030 to move to an MVP or an Advanced Alternative Payment Model. Beginning in CY 2027, clinicians also had to report at least one specialty-specific core measure.

Shared Savings changes rebalanced incentives and reduced burden. CMS revised Shared Savings Program benchmarks and financial incentives to reward new efficiency rather than advantages arising primarily from benchmark design. The rule increased the BASIC track Level E shared-savings rate from 50 percent to 60 percent, reduced the maximum positive regional-adjustment weight for lower-spending ENHANCED-track ACOs from 50 percent to 35 percent, and increased the prior-savings adjustment scaling factor from 50 percent to 75 percent. CMS explained that the combined changes were intended to reduce incentives to select a track because of embedded financial advantages and to preserve incentives for ACOs that generated savings before benchmark rebasing.

The rule also risk-adjusted the 5 percent cap on upward benchmark adjustments and added a growth adjustment for ACOs that recruited professionals and served beneficiaries new to value-based care. According to CMS’s Shared Savings Program fact sheet, the financial and participation changes were projected to add as many as 1 million assigned beneficiaries in an average year and increase net federal savings by $5.5 billion over 10 years, subject to a stated uncertainty range of plus or minus $3.3 billion.

Starting April 1, 2027, approved ACOs could reduce or eliminate Part B cost sharing for many services under an implementation plan. The policy excluded durable medical equipment, prosthetics, orthotics and supplies, and prescription drugs. CMS viewed the flexibility as a way to remove cost barriers to services that could improve beneficiaries’ health. The agency simultaneously phased out the prepaid shared-savings option because participation had been low and CMS concluded that cost-sharing support and other program tools could achieve its goals more efficiently.

CMS also simplified electronic-health-record and beneficiary-notice requirements. ACOs could satisfy certified electronic health record technology requirements through specified quality reporting or attestation options, and the rule created Medicare electronic clinical quality measures for reporting on assigned beneficiaries. The beneficiary notice rule no longer tied notice delivery to the first primary-care visit and removed the follow-up communication requirement. CMS adopted those changes to reduce administrative burden while maintaining transparency and compliance accountability.

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