Weekly Spotlight
The 2027 Payment Rules Are Final: What Changed From the Proposals
CMS released the final 2027 physician fee schedule and the final hospital outpatient and ambulatory surgical center (ASC) payment rule on Nov. 4 (CMS, CMS). Both take effect Jan. 1. The physician cut is deeper than proposed. The 340B drug cut is shallower than proposed.
Physician pay. The conversion factor falls 2.31%, to $32.63, for clinicians outside qualifying alternative payment models, and 1.83%, to $32.95, for qualifying participants (CMS). CMS proposed a 1.68% cut for most clinicians in July (APMA). The main driver is the expiration of the one-year 2.5% increase Congress enacted for 2026.
What else the physician rule settles. The payment reduction for an office visit billed on the same day as a procedure now applies only to procedures with a 0-day global period, and the second service is paid at 80%, not the 50% proposed (CMS). The limit on remote patient monitoring furnished by outside contractors is finalized but delayed to Jan. 1, 2029 (Inside Health Policy, STAT). The complexity add-on code becomes a modifier that raises the visit payment 16%, or 32% for Shared Savings Program and LEAD Model participants. New add-on payment covers diagnosing and treating vaccine adverse effects (Inside Health Policy). Traditional Merit-based Incentive Payment System reporting ends after the 2030 performance period, and three new MIPS Value Pathways bring the total to 30 (Federal Register).
Hospital outpatient and ASC payment. ASC rates rise 2.3%, down from the 2.4% proposed, in line with the hospital outpatient update (Becker’s ASC Review). Drugs bought under the 340B program will be paid at the average sales price minus 28%, against the minus 33.4% CMS proposed and the plus 6% paid today (Becker’s ASC Review). CMS estimates beneficiaries will save $1.1 billion on these drugs in 2027 (CMS). Imaging without contrast at off-campus hospital departments moves to the lower physician fee schedule rate, saving an estimated $260 million in 2027. The second year of the inpatient-only list phase-out removes 637 services, and 618 of them join the ASC covered procedures list (Becker’s ASC Review).
The research behind the fights. A Health Affairs study finds Medicare raised payment values for 10% of physician services after public comment from 2023 to 2025 (Health Affairs). A companion commentary argues that public comment pulls CMS toward the values recommended by the Relative Value Scale Update Committee convened by the American Medical Association (AMA) and calls for independent data (Health Affairs). A third study finds that earlier inpatient-only list removals shifted procedures to the outpatient setting and reduced Medicare spending (Health Affairs). A MedCity News opinion argues CMS is regulating the wrong variable in remote monitoring (MedCity News).
Tags: #PROVIDER #HOSPITAL #PAYER #DRUG
From Savage Health Policy
The 2027 Payment Rules Are Out. Get a Read Built Around You.
The Centers for Medicare and Medicaid Services (CMS) released the final 2027 physician fee schedule and hospital outpatient rules on Nov. 4. The physician conversion factor cut came in at 2.31% for most clinicians, deeper than the 1.68% proposed. The 340B drug cut came in at the average sales price minus 28%, shallower than the minus 33.4% proposed. Both rules take effect Jan. 1.
Order a rule read on demand. I read the final rules end to end against your codes, issues, and products. You get what changed from the proposal and what it does to you, organized by page, while your team is still working through the preamble.
For a read built around your issues, start at the Comment Intelligence page or email me at csavage@shpconsulting.llc.
Centers for Medicare and Medicaid Services (CMS)
Medicaid Work Requirements: An Appeal and a New State Suit
CMS Administrator Mehmet Oz said Nov. 3 that CMS will appeal the district court ruling that struck the work test CMS added to its medical frailty standard, a case he said could reach the Supreme Court. Oregon, Minnesota, New Mexico, and Washington sued the Department of Health and Human Services (HHS) and CMS Nov. 5 in federal court in Oregon. The states argue the federal government cannot withhold existing Medicaid funding from states that do not adopt the work requirement, citing the Supreme Court’s 2012 decision on the Affordable Care Act’s Medicaid expansion.
- Oz: CMS Will Appeal Work Req Medically Frail Suit, Case Could Go To SCOTUS
- 4 states sue CMS over Medicaid work requirement funding threat
Tags: #PAYER #PATIENT
Drug Price Negotiation: A Court Loss, a Permanent Framework, and a New Suit
A federal judge ruled Oct. 29 that CMS improperly selected AbbVie’s Botox for the third cycle of Medicare drug price negotiation, the first successful drugmaker challenge to a drug’s selection for negotiation. CMS finalized a rule setting ongoing negotiation policies, starting with prices that take effect in 2029, and will treat certain fixed-combination drugs it considers new formulations of an existing drug as the same drug for negotiation. Second-round prices for 15 drugs, including Ozempic, Wegovy, and Rybelsus, take effect Jan. 1. The Biotechnology Innovation Organization and two California biotech groups sued Nov. 6 to halt the Global Benchmark for Efficient Drug Pricing model, which ties Medicare drug prices to prices in peer countries. CMS Medicare director John Brooks asked Congress to change Medicare drug payment to encourage generics.
- U.S. District Court: CMS Wrongly Sought Negotiation Of AbbVie’s Botox
- CMS to make drug price negotiation framework permanent
- Medicare’s 2nd round of negotiated drug prices starts in 2 months: 6 things to know
- BIO joins the legal fight against Medicare pilot that ties drug prices to peer countries
- Brooks: Congressional Medicare Reimbursement Reforms Key To Drug Competition, Reshoring
Tags: #DRUG #PAYER
No Surprises Act: Unpaid Emergency Claims and Two Arbiters Out
A New York Times investigation finds health plans often withhold payment on emergency claims despite the No Surprises Act. The administration is ending the contracts of two arbitration entities, IPRO and Network Medical Review Company, for failing minimum performance standards. House Energy and Commerce leaders Brett Guthrie and Frank Pallone Jr. asked the Congressional Budget Office whether arbitration is raising private premiums and federal costs.
- Flouting Consumer Law, Insurers Refuse to Pay Medical Bills for Emergency Care
- Two No Surprises Act arbitrators lose government contracts to decide payment disputes
- Guthrie, Pallone Seek CBO Analysis Of NSA Arbitration Costs
Tags: #PAYER #PROVIDER #PATIENT
Rural Health Transformation: A Missed Deadline, Then $10 Billion
The Office of Rural Health Transformation missed its deadline to announce second-year awards from the $50 billion program. CMS then announced $10 billion in second-year awards to all 50 states. Hospital leaders say uncertainty remains over when and how much money will reach them.
- Trump Administration Delays Awards Slated To Improve Rural America’s Health
- CMS News: Trump Administration Announces $10 Billion in Second Year of Rural Health Transformation Awards to All 50 States
- Helpful, not yet transformative: Leaders weigh $50B rural health fund
Tags: #HOSPITAL #PROVIDER
Conditions of Participation: A Broad Rollback Proposed
CMS proposed Nov. 5 to remove requirements it calls duplicative, outdated, or disproportionately burdensome after reviewing the conditions of participation for all 21 provider and supplier types. The proposal would drop obstetric quality-improvement requirements set to start Jan. 1, 2027, and mandatory annual staff training on emergency readiness. CMS estimates savings of about $320 million a year.
- CMS proposes broad rollback of conditions of participation: 11 notes
- CMS proposes to cut administrative requirements for hospitals, other providers
Tags: #HOSPITAL #PROVIDER
Prior Authorization: A Critique of WISeR and a Pediatric Rollback
Documents obtained by the Electronic Frontier Foundation point to seven potential problems with Medicare’s WISeR prior authorization model. UnitedHealthcare will stop requiring prior authorization for more than 2,000 pediatric procedure codes starting Dec. 1, including diagnostics and common oncology, orthopedic, and ear, nose, and throat care.
- 7 Potential Problems with Medicare’s AI Prior Authorization Experiment
- UnitedHealthcare eliminates prior authorizations for 2,000 pediatric procedures
Tags: #PAYER #PROVIDER #PATIENT
Also in CMS
Rhode Island, Virginia, and other states committed tens of millions of dollars to blunt another year of marketplace premium increases (Modern Healthcare). A federal judge lifted CMS’s freeze on new marketplace broker registrations, clearing about 19,000 agents and brokers (Becker’s Hospital Review). The AMA urged CMS to let all first-time Medicare Advantage enrollees, not only those who had Medigap coverage, return to traditional Medicare at any point in their first year (Inside Health Policy). The latest ACO REACH evaluation found the model improved quality and reduced gross spending for some types of accountable care organizations in 2023, though net Medicare spending rose (CMS). CMS is drafting guidance on state use of claims analytics against Medicaid fraud (Inside Health Policy). Voters in several states approved ballot measures that add state money for Medicaid as the 2025 reconciliation law shifts costs to states (Inside Health Policy). Health Affairs examines how Medicaid cuts threaten emergency medical services (Health Affairs).
Tags: #ALL
Food and Drug Administration (FDA)
Health AI: A Draft Bill, 500 Comments, and the Problem After Approval
Sen. Bill Cassidy (R-La.), the outgoing chair of the Senate Health, Education, Labor, and Pensions (HELP) Committee, released a draft bill to regulate health artificial intelligence (AI), including autonomous clinical AI. FDA received more than 500 comments on its discussion paper on generative AI devices. A MedCity News opinion argues that the hard part comes after approval, because performance can shift in real-world use without a model update.
- Cassidy Floats Draft Bill To Regulate Health AI
- How should the FDA regulate generative AI in medtech? Here are 5 takes (MedTech Dive)
- The Big Challenge for AI in Healthcare Comes After Approval
Tags: #DEVICE #PROVIDER
User Fees: FDA Expects Reauthorization, and Sanders Gains a Seat at the Table
Lowell Zeta, acting chief of staff in the FDA commissioner’s office, said the midterm results will likely not affect reauthorization of the user fee agreements for fiscal years 2028 to 2032. The current programs expire Sept. 30, 2027. The Democratic win elevates Sen. Bernie Sanders (I-Vt.), a critic of the program, in the negotiations.
Tags: #DRUG #DEVICE
Also in FDA
FDA released a discussion paper on benefit-risk evaluation of robotic devices with autonomous or remote teleoperation capabilities, with comments due Jan. 5, 2027, and a public workshop Dec. 2 and 3 (FDA). FDA finalized its guidance on prescription drug use-related software Oct. 20 (RAPS). The head of FDA’s Total Product Life Cycle Advisory Program, which has enrolled about 160 devices, offered advice to innovators (Medical Design & Outsourcing). A Duke-Margolis report recommends clinical trial reforms as two House members float legislation (Inside Health Policy).
Tags: #DRUG #DEVICE
Department of Health and Human Services (HHS)
Kennedy After the Midterms: Oversight Ahead and Nominees in Limbo
HHS Secretary Robert F. Kennedy Jr. is expected to be a primary target of congressional Democratic investigations once Democrats take control in January. Republican losses are raising questions about his alliance with President Trump. Calley Means, a departed White House adviser on the Make America Healthy Again agenda, is attacking FDA commissioner nominee Heidi Overton, and the window for confirming outstanding health nominees is closing.
- Dem Congressional Oversight To Shape RFK Jr.’s Future At HHS
- RFK Jr. and Trump have to make a decision about their future together
- Where does MAHA go from here? 3 possible futures
- Former MAHA Advisor Slams Overton, RFK Jr. Stands By Trump As Wiles Leaves
- Outstanding HHS Nominees Could Be Shelved Due To Midterm Results
Tags: #ALL
Preventive Services Task Force: Appointees With Drug Stocks
Four of the eight members Secretary Kennedy appointed to the U.S. Preventive Services Task Force in September hold stock in companies whose products the panel’s decisions affect.
Tags: #ALL
Pharmacy Benefit Managers: Copay Accumulator Disclosure and a CVS Split
The Labor Department’s new final rule requires pharmacy benefit managers serving large self-insured plans to disclose the copay accumulator and maximizer programs they run, which divert manufacturer copay assistance away from patients, and their copay clawbacks. CVS Health plans to split its pharmacy and health care businesses into two companies. The split comes amid state and congressional pressure on vertical integration.
- HIV+HEP Pleased New PBM Rule Requires Some Copay Accumulator Transparency
- CVS Says Pressure From States, Congress Factored Into Split Of Pharmacy, Health Care Operations
Tags: #PAYER #DRUG
Also in HHS
The Administration for Strategic Preparedness and Response, the Commerce Department, and the Department of War will assess U.S. supply chains for pharmaceutical key starting materials (American Hospital Association). The Department of Veterans Affairs and the Department of War joined the Trusted Exchange Framework and Common Agreement network, which now tops 2 billion records (Becker’s Hospital Review).
Tags: #ALL
Heard on the Hill
Democrats Win Congress: The Health Agenda
Democrats won control of the House and Senate on Nov. 3 after centering health care affordability in their campaigns. Their stated priorities are restoring the enhanced marketplace premium tax credits and reversing the 2025 reconciliation law’s Medicaid cuts. Oversight investigations, insurance premiums, and drug prices are also on the list. The new Congress is sworn in Jan. 3, and Republicans hold both chambers until then. A KFF analysis finds rising health costs shaped voters’ decisions.
- Democrats Capture Congress, Setting Up Future Health Policy Fights With Trump
- Democrats Aim To Restore ACA Subsidies And Medicaid Funding Next Year
- Dems Make Reversing Medicaid Cuts, Restoring ACA Credits Top Priorities; Advocates Stress Affordability Mandate
- Democrats’ Election Rout Is Poised To Dramatically Reorder Federal Health Policy
- Democrats get their health agenda ready ahead of takeover
- Top Democrat To Target ‘Corporate Chokehold’ On Healthcare
- Democrats gain control of Congress: 5 midterm takeaways for healthcare leaders
- Five midterm winners and losers: MAHA mowed down, Dem docs scrub in, Medicare for All returns
- Democrats win power to push back on Trump’s health care moves (STAT)
- Health Care in the 2026 Midterm Election
Tags: #ALL
The Doctors Who Ran and Won
Democratic physicians gained ground in Congress. Pediatrician Annie Andrews flipped a Senate seat in South Carolina, and Abdul El-Sayed, an epidemiologist trained as a physician, won the Michigan Senate race. Amy Acton, a public health physician, was elected governor of Ohio. Two Republican physician senators, Bill Cassidy and Roger Marshall, will not return. NPR counts at least 18 physicians in the new Congress, 10 of them Democrats. The current Congress has 20, and Republicans outnumber Democrats two to one. The group 314 Action, which backs Democrats with science and health backgrounds, supported Andrews, El-Sayed, and Acton.
- It was a big night for doctors to win seats in Congress, riding the blue wave (NPR)
- Democratic doctors win big in 2026 midterm elections (CIDRAP)
- Midterm Elections A Win For Dem Doctors And ‘Science,’ MAHA Struggles
- These Doctors Are on the Ballot
Tags: #ALL
New Gavels: Committee Leaders and a House Republican Shift
Sens. Ron Wyden (D-Ore.) and Bernie Sanders, both Medicare for All backers, are expected to lead the Finance and HELP committees. Senate Appropriations Chair Susan Collins (R-Maine) lost her seat. House Speaker Mike Johnson said he will step aside as House Republican leader.
- Sens. Wyden and Sanders, backers of Medicare for All, set to take charge of key committees
- Key Health Committee Roles Up In The Air After Blue Wave Election
- Mike Johnson will step aside as House GOP leader
Tags: #ALL
The Lame Duck: Funding, Extenders, and a Short List
Congress returns with a deadline to fund the government, health programs to extend and HHS nominees to confirm. Experts expect a small package of health extenders on a short-term continuing resolution. Analysts see a chance for prior authorization reform and enhanced marketplace subsidies, and advocates are pressing for Medicare Part D coverage of non-opioid pain medications.
- A looming deadline to fund the government will shape Congress’ unusual lame duck session
- Experts: Blue Wave ‘Changes The Dynamic’ Of What Could Be Done During Lame Duck Period
- Prior authorization, ACA subsidy votes in lame-duck session?
- Congress Pressed To Pass Part D, VA Non-Opioid Access Reforms By Year’s End
Tags: #ALL
On the Hill
Democrats are expected to pursue an aggressive drug pricing agenda, including expanding Medicare negotiation, 340B reform and further pharmacy benefit manager reform (Inside Health Policy). Democrats plan to use the power of the purse to restore federal research funding after administration cuts (KFF Health News, The New York Times).
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Notable Notes
Tricuspid Valve Intervention: A Trial Win and a New Device
A New England Journal of Medicine trial in patients with severe tricuspid regurgitation and heart failure found transcatheter tricuspid valve repair plus medical therapy superior to medical therapy alone in reducing heart failure hospitalizations and deaths. An accompanying editorial frames the field around transcatheter innovation and the heart team. The first patients were treated in the TRIUMPH trial of a new transcatheter tricuspid valve replacement device.
- Tricuspid-Valve Intervention in Heart Failure
- Transcatheter Tricuspid-Valve Intervention for Severe Tricuspid Regurgitation
- First patients treated for TRIUMPH trial focused on new TTVR tech
Tags: #DEVICE #PROVIDER #PATIENT
TCT 2026: Three Takeaways
Edwards’ data on transcatheter aortic valve replacement (TAVR) in moderate aortic stenosis drew applause at the Transcatheter Cardiovascular Therapeutics (TCT) 2026 meeting. Medtronic’s renal denervation and Abbott’s left atrial appendage closure devices also posted positive results.
Tags: #DEVICE #PROVIDER
Private Equity: Hospices and Hospitals
Medicare spends nearly $1,000 more per stay at hospices owned by private equity firms, a new study finds. A watchdog report finds nearly 1 in 8 private U.S. hospitals is owned by private equity, an update prompted by a single $3.9 billion acquisition.
Tags: #PROVIDER #HOSPITAL
Also Notable
AdvaMed Chair Mick Farrell, also ResMed’s chief executive, outlined industry priorities amid cyberattacks, inflation, and potential tariffs (MedTech Dive).
Tags: #ALL