TMA Critiques ‘Appalling’ Cuts in 2027 Medicare Physician Fee Schedule Proposal
By Phil West

Amid increasing physician practice costs and administrative burden, the Texas Medical Association critiqued the proposed 2027 Medicare Physician Fee Schedule for failing to address organized medicine’s concerns around payment and practice viability while adding new obstacles for already-strained physicians.

In a Sept. 14 comment letter to Centers for Medicare & Medicaid Services (CMS) Administrator Mehmet Oz, MD, TMA crystallizes its concerns into nine specific points, urging the agency to:

• Ensure Medicare payment reflects the actual work and resources required to provide patient care;
• Preserve payment for appropriately reported modifier 25 services;
• Reconsider the proposal prohibiting third-party vendors from administering remote physiologic and remote therapeutic monitoring services;
• Delay implementation of the mandatory Ambulatory Specialty Model (ASM);
• Make the transition to Merit-Based Incentive Payment System (MIPS) Value Pathways workable for physicians;
• Reduce prior authorization burden rather than merely automate it;
• Strengthen primary care without reducing payment to other physicians;
• Proceed cautiously before fundamentally changing the CPT® coding and American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) valuation systems; and
• Continue strengthening the Medicare Shared Savings Program and reduce barriers to physician-led accountable care organization participation.

As proposed, CMS would reduce the Medicare Physician Fee Schedule conversion factor by 1.68% for most physicians and by 1.19% for qualifying alternative payment model participants. CMS prescribes these cuts even while projecting a 2.5% increase in practice costs as measured by the Medicare Economic Index.

“This is frankly appalling,” TMA President Bradford W. Holland, MD, wrote. “These payment pressures are compounded by growing administrative and regulatory requirements that add to the cost of providing care and take resources away from patients.”

The comment letter is the latest salvo in TMA’s ongoing Medicare advocacy. TMA joined AMA and more than 100 state and national specialty medical organizations and other health professional groups in writing to CMS earlier this month, presenting a comprehensive list of needed fixes. Dr. Holland has also taken to social media to explain the real-world effects of continued Medicare cuts, including this year’s proposal.

Noting it is important to “preserve the physician’s role in defining and valuing services” through CPT® coding and RUC relative value determinations, TMA called on CMS to support physician-led health care by not replacing or substantially modifying a coding system that is integrated into the nation’s health care system.

TMA said Medicare payment should reflect “the actual work and resources required to provide patient care,” calling for CMS to use current, representative data in calculating service costs. Last year, CMS declined to use updated practice-cost data collected by AMA, citing concerns about the survey methodology. Instead, the agency continued relying on specialty-level data collected in 2007 and 2008 that reflect practice costs from 2006.

TMA also cautioned CMS against assuming that technology or policy changes intended to promote efficiency automatically result in less physician work or fewer resources being used.

CMS also plans to reduce payment when a physician uses modifier 25 to document a separate evaluation and management (E/M) service on the same day as a procedure. Per TMA’s analysis, Medicare would pay for the most expensive service at 100% and all other E/M visits or surgical procedures provided on the same day at 50%.

“The proposal assumes overlapping work even when two distinct services are provided and could make it more difficult for patients to receive needed care during a single visit,” Dr. Holland explained. “For patients who face transportation, work, mobility, or other barriers to returning for care, this could result in delayed or missed treatment, potentially exacerbating the condition and leading to increased care cost.”

TMA similarly prioritizes patients’ needs by urging CMS to invest in primary care without resorting to budget-neutral reductions that would shortchange other physician specialties. The association suggests expanding physician payment options, supporting physician-led team-based care, paying appropriately for digital interactions dependent on physician review, and encouraging voluntary “value-based care arrangements that reward better outcomes and allow practices to share in the savings they help generate.”

Further pushing to protect physicians from administrative burden, TMA voiced opposition to a new prescription drug electronic prior authorization performance measure. Under the proposal, physicians would begin reporting their electronic prior authorization efforts in the MIPS Promoting Interoperability category starting Oct. 1, 2027, “before the technology has been meaningfully evaluated,” TMA wrote. The association argues the Quality Payment Program mandatory reporting tied to the electronic prior authorization changes should be delayed until at least 2029.

Additionally, CMS should not require electronic prior authorization reporting as part of MIPS’ Promoting Interoperability until payers, EHR vendors, and physicians have time to implement, test, and operationalize the technology.

TMA also urges CMS to delay the launch of ASM, a mandatory five-year pilot set to begin Jan. 1, 2027, noting that physicians need adequate time and guidance to prepare for participation that could place them at financial risk. CMS did not issue the final list of required participants until Sept. 15 (the day after comments on the 2027 Medicare Physician Fee Schedule proposal were due), leaving affected physicians with little time to prepare before the model’s scheduled launch. TMA further urged CMS not to phase out traditional MIPS until the agency has sufficient experience demonstrating that MIPS Value Pathways work as intended across specialties and practice settings. 

Review the comment letters central to TMA’s federal advocacy efforts.

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