AHA Comments on Physician Fee Schedule Proposed Rule for 2027

September 14, 2026

The Honorable Mehmet Oz, M.D. 
Administrator
Centers for Medicare & Medicaid Services 
7500 Security Boulevard
Baltimore, MD 21244-1850

Submitted Electronically

RE: CMS–1848–P Medicare and Medicaid Programs; CY 2027 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program

Dear Administrator Oz:

On behalf of our nearly 5,000 member hospitals, health systems and other healthcare organizations; our clinician partners — including more than 270,000 affiliated physicians, 2 million nurses and other caregivers — and the 43,000 healthcare leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services’ (CMS’) physician fee schedule (PFS) proposed rule for calendar year (CY) 2027. 

The AHA applauds CMS for proposing significant changes that would strengthen the Medicare Shared Savings Program (MSSP) and expand participation in accountable care. We believe that these policies would sustain and grow the program, reduce administrative burden and promote innovation in care delivery. Specifically, we appreciate the agency’s proposals to establish guardrails for the Accountable Care Prospective Trend (ACPT), increase the BASIC track Level E sharing rate and prior savings adjustment scaling factor, and enhance beneficiary engagement through cost-sharing reductions. These and other proposed changes would help to mitigate the benchmark ratchet effect, which has penalized providers for their past success, as well as incentivize new participation in accountable care organizations (ACOs). We look forward to continued collaboration with CMS as it seeks to increase the number of Medicare beneficiaries in alternative payment models (APMs).

We remain concerned, however, about the overall inadequacy of Medicare physician payments and the potential impact on access to and quality of care. We oppose the proposed reduction in the conversion factors for CY 2027. Hospitals and their associated physicians are currently facing substantial payment shortfalls coupled with a significant nationwide staffing shortage, additional administrative burdens and an aging beneficiary population. Therefore, we urge CMS to work with Congress to ensure a more adequate physician payment update in 2027 and going forward.

We also are concerned that CMS has not provided sufficient information for interested parties to be able to evaluate the effects of its proposed changes to the indirect practice expense (PE) methodology. Given the potentially significant impact on payment, we urge CMS not to finalize these proposals until it has published a more detailed impact analysis to ensure stakeholders have a meaningful opportunity for comment. We also remain strongly opposed to the indirect PE site-of-service differential for facility and non-facility settings, and we urge the agency to repeal this policy.

In addition, we commend CMS for proposing to allow more flexibility for teaching physicians to be virtually present for services involving residents. However, we urge the agency not to finalize its proposed changes to remote monitoring services, which would result in immediate and significant disruption for Medicare beneficiaries and limit access to care.

Finally, while we appreciate CMS’ commitment to reducing inappropriate duplication in payment under the PFS, we oppose its proposal to reduce payment by 50% when a separately identifiable office/outpatient (O/O) evaluation and management (E/M) visit is furnished on the same day as a global procedure. At a time when the Administration has prioritized improving efficiency and care coordination in fee-for-service (FFS) Medicare, this proposal would result in more fragmented care and reduced access for patients.

We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Robyn Tessin, AHA director of physician payment policy, at rtessin@aha.org.

Sincerely,

/s/

Stacey Hughes
Executive Vice President
Government Relations and Public Policy

Enclosure

View the detailed letter below.