Physician leaders warn that CMS’ 2027 Medicare physician fee schedule final rule will put more strain on independent practices and make it harder for patients to get care.
The final rule, released Nov. 4, cuts the conversion factor 2.31% to $32.63 for physicians who aren’t qualifying participants in an advanced alternative payment model. CMS had proposed a 1.68% cut in July. Much of the drop comes from the expiration of a temporary 2.5% payment increase for 2026. The rule also finalizes a 20% payment reduction for certain evaluation and management services billed with modifier 25 on the same day as a zero-day global procedure.
Becker’s asked physician leaders what stands out in the final rule and what it will mean for their organizations. Here is what 29 leaders shared.
Editor’s note: Responses were lightly edited for length and clarity.
Question: What stands out to you in the final rule, and what will it mean for your physicians, your organization or physician practices more broadly?
Shakeel Ahmed, MD, founder and CEO of Atlas Surgical Group (St. Louis): I practice gastroenterology and run surgery centers, so I look at Medicare’s 2027 pay cut from both sides. A 2.31% drop in the base rate for most physicians may sound modest, but I still have to pay nurses, buy supplies and keep equipment running. Those costs don’t go down when Medicare pays less. My concern is what happens to the patient who needs a colonoscopy close to home if the independent practice down the street can no longer afford to offer as many appointments.
I’m glad CMS backed off the steeper cut it proposed for certain office visits billed on the same day as a minor procedure. Even so, if I evaluate a patient and decide a procedure is needed that day, doing both in one visit can save that patient another trip and another day off work. I want Medicare to make that easier where it’s clinically appropriate. And I’d like Congress to give practices a predictable payment update that reflects what it actually costs to care for patients, so I can plan how many nurses to hire and how many patients we can see next year.
Andy Anderson, MD. Executive Vice President, Chief Medical and Quality Officer of RWJBarnabas Health (West Orange, N.J.): Cutting reimbursement for physician services threatens more than the stability of medical practices. It threatens patients’ access to the care they need. Instead, CMS must strengthen its support for physicians, who are the cornerstone of our healthcare system, to ensure patients and communities can access high-quality care and achieve the best possible outcomes. Physicians should be supported, not penalized, through CMS payment programs.
Arash Araghi, DO. Chief Medical Officer of Healthcare Outcomes Performance Co. (Phoenix): The 2027 Medicare physician fee schedule highlights a fundamental tension in American healthcare. While the continued escalation of healthcare spending is unsustainable and demands meaningful reform, inflation-adjusted Medicare physician reimbursement has declined about 33% over the past 25 years, even as the broader cost of healthcare continues to rise. Physicians must champion and lead the transformation toward a more efficient, patient-centered healthcare system that prioritizes quality, outcomes and responsible stewardship of healthcare resources. However, we must also advocate for sustainable physician reimbursement, recognizing that continued erosion of payments ultimately threatens practice viability, patient access and potentially the quality of care.
At HOPCo, we believe the path forward lies in strategically aligning physicians, healthcare facilities and payers around shared goals of improved clinical outcomes, operational efficiency and reduced total cost of care. Meaningful healthcare reform cannot simply be about paying physicians less. It must be about empowering physicians to lead the delivery of better care at a sustainable cost.
Adam Bruggeman, MD. CEO and Surgeon of Texas Spine Care Center (San Antonio): CMS continues to get bad information from corporate actors working to improve their profits through federal rulemaking. Along with mandated budget neutrality, it is decimating private practice. We could pay doctors nothing and force them to work for free and still have runaway healthcare costs. The biggest concern going forward for surgeons is the continued focus on reducing work RVUs or global payments based on flawed data about postoperative care.
W. Allen Fink, DO. Associate Vice President and Chief Medical Officer of UT Health San Antonio (Texas): What concerns me most is the continued reduction in physician reimbursement while the cost of providing care continues to increase. We’re asking physicians and health systems to improve access, expand services and deliver better outcomes, all while providing fewer resources to accomplish those goals. At some point, that becomes unsustainable.
I appreciate the movement toward value-based care and efforts to eliminate unnecessary spending. Those are worthwhile objectives, but we need to be thoughtful about how we get there. Reducing reimbursement for services provided during the same visit may make sense on paper, but we also want to encourage efficiency and avoid making the patient return for additional appointments. That is not patient-centered. Ultimately, these reductions don’t just affect physicians. They affect our ability to recruit, retain and support the clinicians needed to care for our patients. When that happens, patient access suffers.
Jordan Frey, MD. Plastic Surgeon at Erie County Medical Center (Albany, N.Y.): What stands out to me most about the 2027 Medicare physician fee schedule is the continued disconnect between physician reimbursement and the actual cost of delivering medical care. A 2.31% reduction in the conversion factor may not sound dramatic, but when you consider rising overhead, staffing costs and inflation, the cumulative effect becomes significant. With physician compensation stagnating relative to inflation and administrative costs rising exponentially, it’s easy to feel disillusioned and to feel that doctors continue to be made scapegoats for rising healthcare costs.
As an employed surgeon, I recognize that these cuts may not immediately or directly affect my paycheck. That doesn’t mean employed physicians like me are removed from the consequences. Health systems facing reimbursement pressure inevitably look for ways to maintain their margins, often through higher productivity expectations, reduced resources or tighter control over physician practices. For independent physicians, the impact can be even more immediate, with declining reimbursement further threatening the viability of private practice. My biggest concern is that we continue to ask physicians to do more with less while wondering why burnout is increasing and the nation faces a worsening physician shortage.
Megan Friedman, DO. Chair and Medical Director, Pacific Coast Anesthesia (Los Angeles): What stands out to me is the continued disconnect between Medicare reimbursement and the actual cost of providing physician services. The 2.31% reduction in the conversion factor for 2027 comes at a time when practices are already facing significant workforce and operational pressures. In anesthesia, reimbursement remains tied to individual cases, while hospitals and surgery centers depend on consistent physician coverage regardless of daily case volume. As reimbursement fails to keep pace with the cost of maintaining that coverage, more of the financial burden shifts to hospitals and surgery centers, many of which already operate on razor-thin margins. This creates more pressure on facilities and physician practices alike and ultimately threatens patient access to care.
Ana Tuya Fulton, MD. Chief Population Health Officer of Care New England, and Roger Mitty, MD. President and COO of Care New England Medical Group (Providence, R.I.): Care New England, through its accountable care organization, Integra Community Care Network, participates in value-based care contracts, including the Medicare Shared Savings Program. As a health system with an ACO, we see a few key components that strengthen and recognize participation in the MSSP. For example, the new B2 modifier increases eligible office/outpatient evaluation and management visit payments by 32% for clinicians participating in MSSP or LEAD ACOs. This recognizes the infrastructure that makes accountable care work, including enhanced care teams, proactive outreach and chronic disease management, through more timely payment rather than relying solely on year-end shared savings.
A second important change recognizes that cost-sharing may affect whether patients accept services such as complex care management. Beginning April 1, 2027, CMS-approved ACOs can reduce or eliminate Part B cost-sharing for many services for assigned beneficiaries. However, the reduction in fee-for-service rates will be detrimental to efforts to stabilize the clinician workforce. These cuts may push physicians toward markets with a higher commercial payer mix, further eroding access for our most vulnerable populations.
Ramis Gheith, MD. Chief Medical Officer of DxTx Pain and Spine (Chicago): The 2027 Medicare physician fee schedule final rule raises significant concerns for the future of interventional pain management, particularly for independent physician practices. While CMS continues to emphasize value-based care, quality and efficiency, further reductions in physician reimbursement threaten the very practices delivering cost-effective, minimally invasive treatments that help patients avoid unnecessary surgery, reduce reliance on opioids and maintain their quality of life.
The roughly 2.3% reduction in the Medicare conversion factor for most physicians comes at a time when operating expenses, staffing costs and regulatory burdens continue to rise. For interventional pain management physicians, who already face substantial reimbursement pressure, these reductions further strain the financial sustainability of independent practices and may ultimately limit patient access to essential treatments.
We cannot continue to promote value-based healthcare while systematically undermining the financial viability of the physicians delivering that value. Interventional pain management is not simply about treating pain. It is about restoring function, preserving independence and helping patients avoid more invasive and costly interventions. CMS must recognize that preserving access to these services is not just a physician reimbursement issue. It is a patient care issue. Meaningful Medicare payment reform must recognize the true costs of delivering high-quality care and ensure that independent physicians can continue serving our patients and communities.
Geoff Gorres, MD. Founder, CEO and Chief Medical Officer at Bluejacket Health (Louisville, Ky.): One of the main problems I see is that for the mostly employed physician workforce, when there is a revenue gain for physician services, it goes to the bottom line of the healthcare organization with no benefit to the physician. We never even know about it. When there’s a cut, we’re affected. One of the physician staffing groups I work for covering emergency departments is now using AI tools to “optimize documentation and billing,” incentivizing physicians to increase per-patient revenue to a higher arbitrary benchmark to get “incentive pay” instead of an overdue hourly rate increase. As Charlie Munger said, “Show me the incentive and I’ll show you the outcome.” In this case, the outcome will be more physician documentation workload, more unnecessary tests and a higher cost of care. If you’re a patient with a deductible and copay, that goes right to your bottom line.
Healthcare is broken. We can’t rely on the government to fix it, and we can’t trust the insurers and big-box healthcare organizations either. With patients and employers paying thousands a month for essentially catastrophic policies, and CMS and insurers paying less, what we need isn’t “Medicare for All.” It’s a jailbreak. We need innovators to provide services in a streamlined fashion, in a cash-pay environment, and start blazing the trail.
Michael Graves, MD. Independent dermatologist at Ascension Seton (Austin): What concerns me is the lack of acknowledgment of what “physician pay” includes. Labeling these cuts as “physician pay” is a misnomer. This is a cut to the entirety of outpatient medicine.
For outpatient practices, the “physician payment” covers all overhead costs, including staff salaries, medical supplies, rent and many other expenses that have increased dramatically in recent years alongside the year-over-year cuts. Other parts of medicine, such as hospitals and insurers, have inflation-based adjustments that help offset these costs. Outpatient payments do not.
Outpatient medicine is the most cost-efficient way to deliver care, and keeping patients out of emergency rooms and hospitals dramatically reduces the overall cost of care. Continued cuts to these reimbursements will lead to more practice closures, more consolidation and fewer options for outpatient care, ultimately driving up costs across the entire system.
Joseph Hayes, MD. Vice President and Chief Medical Officer of Mercy Southeast (St. Louis): What’s clear in the new fee schedule is that CMS is continuing to push healthcare toward value-based care, which is a reasonable and necessary direction, while reducing support for the fee-for-service system that most organizations still depend on today. The concern is not the 2.3% reduction by itself. It’s the cumulative effect of years of reimbursement pressure at the same time physician shortages, labor costs, supply costs and patient complexity continue to increase.
For most communities, the real question is whether access to care can keep pace. Hospitals and physician practices are being asked to absorb rising operating costs while facing continued pressure on reimbursement. Organizations will need to succeed in value-based models, care coordination and population health management, but policymakers also need to recognize that the transition has to be sustainable. If reimbursement declines faster than providers can adapt, patients will ultimately feel the impact through reduced access to the physicians, services and hospitals their communities depend on.
Stephen Heffington. Chief Medical Officer of Fairbanks Memorial Hospital and Foundation Health Partners (Fairbanks, Alaska): The decrease in physician reimbursement will make it even harder for Medicare patients to find a primary care provider. In Alaska, 21.6% of patients cannot find a primary care provider. In our service area, 85% of community providers do not accept new Medicare patients, and 50% actively unenroll some of their existing patients once they age into Medicare. Primary care access for Medicare patients relies heavily on hospital-employed providers, with the health system covering the shortfall.
The reduction tied to modifier 25 will hurt patient access and increase overall costs. Patients will be asked to come back on a later day for procedures that could have been done in the same visit. With higher costs, providers will be forced to separate visits by at least a day to cover their expenses. That will increase the number of visits and decrease access while raising overall costs. The continued attacks on 340B are a tremendous threat to rural hospital sustainability. Without 340B, many hospitals will be forced to close services that lose money in their communities.
Robert Highland, MD. OB-GYN at Catawba Women’s Center (Hickory, N.C.): One of the most consequential aspects of the 2027 final rule is the restructuring of maternity reimbursement. Although Medicare covers relatively few deliveries, its coding and valuation methodology influences commercial and Medicaid reimbursement nationwide. The transition from global maternity reimbursement to individual services raises an important question: Does the sum of the parts adequately reflect the value and cost of managing an entire pregnancy?
Of particular concern is how malpractice expense is allocated when prenatal care is reimbursed through individual evaluation and management services. These services may not fully reflect the cumulative professional liability associated with obstetric care. While CMS has recognized some of the valuation concerns surrounding labor and delivery, it remains uncertain whether the reconstructed maternity episode will appropriately account for physician work, practice expenses and malpractice costs. This transition offers an opportunity to modernize maternity reimbursement, but success should be measured by whether the resulting payment structure accurately recognizes clinical complexity, patient risk and the resources required to provide comprehensive maternal care.
Costas Kefalas, MD. President of the American College of Gastroenterology: Even though we have come to expect CMS to implement harmful cuts to the Medicare physician fee schedule, ACG is nevertheless frustrated by the 2027 final rule and the 2% to 3% decrease to the conversion factor. This announcement comes on the heels of a midterm election in which affordability was the top issue for most voters, regardless of party. How do policymakers expect independent and clinician-led practices to provide high-quality GI services when they hand us a reimbursement cut each year? Like everyone nationwide, our members are seeing their costs continue to rise.
The conversion factor, budget neutrality, sequestration and other factors behind this cut are required by statute. ACG reiterates our call for Congress to reform the Medicare reimbursement system and allow gastroenterologists to focus on what we do best: providing patients with the best, most personalized GI care.
Badrinath Konety, MD. President of Allina Health Cancer Institute and Chief Academic Officer of Allina Health (Minneapolis): The final rule for 2027 has several issues that will negatively affect providers and health systems. The reduction in RVU-based reimbursement for procedural specialties in particular will keep adding to the cumulative negative impact. This may hurt access and accelerate the decline in availability of key surgical and procedural services. The proposed change to reimbursement for 340B-eligible drugs will limit the ability of hospital-based infusion services to provide necessary treatments, just as many promising new therapies for a variety of conditions are becoming available.
David Marcozzi, MD. Chief Clinical Officer of University of Maryland Medical Center (Baltimore): CMS is lowering base physician payments while creating opportunities to reward high-quality care. Poor quality is costly, and rewarding excellence makes sense. Maryland hospitals face similar expectations, and these changes should further align physician and hospital incentives. The impact remains to be seen, but this new rule is likely to test hospital-physician partnerships. Success will depend on how effectively hospitals and physicians work together to improve outcomes, manage costs and sustain essential clinical programs.
Yesh Navalgund, MD. Chief Medical Officer, President and Executive Board of National Spine & Pain Centers: What stands out is another conversion factor cut on top of years of erosion. The final rule cuts the conversion factor for physicians not in an alternative payment model by about 2.3%, to $32.63, which is deeper than proposed, while Medicare Advantage plans get more than $13 billion more. For interventional pain and physician-owned ASCs, that widens the gap, as hospital outpatient rates rise and many ASC injection and ablation payments fall. We need Congress to stabilize the physician fee schedule and revisit mandatory specialty models that pull focus from patient care.
Harpreet Pall, MD. Chief Medical Officer of Jersey Shore University Medical Center and K. Hovnanian Children’s Hospital (Neptune City, N.J.): Medicare’s physician fee schedule conversion factor will fall 2.31% in 2027 for clinicians who aren’t qualifying participants in an advanced alternative payment model, largely because the 2026 increase is expiring. The impact will vary by specialty and by the services a practice provides. As a hospital CMO, I’ll be watching what this means for access after discharge. We can tell a patient with heart failure to follow up within a week, but that only helps if an appointment is available.
Nora Perkins, MD. Managing Partner of Albany (N.Y.) ENT & Allergy Services: As managing partner of a physician-led private practice, I am deeply concerned about the impact of these changes. The continued downward pressure on physician reimbursement comes at a time when nearly every expense of running a medical practice, including employee healthcare, staffing, technology and general operating costs, continues to rise. While other industries adjust their pricing to account for rising costs, physician practices are expected to provide the same level of care with fewer and fewer resources.
The reduction in reimbursement for services billed with modifier 25 is particularly troubling. CMS fails to recognize that the physician work involved in performing a procedure such as nasal endoscopy, fine needle aspiration or control of a nosebleed during the same visit as a separately identifiable evaluation and management service is no less than if those services were performed on different days. Reducing reimbursement for this work penalizes physicians for delivering efficient, comprehensive care. Ultimately, these policies threaten the financial viability of independent practices and may force physicians to limit Medicare participation, further restricting patient access to timely, high-quality care.
David Pinsinski, MD. Independent Internal Medicine Physician (Superior, Colo.): My wife and I are both physicians who have owned and operated independent medical practices for decades. I began practicing in 1999, and in that time we have seen a relentless erosion in Medicare physician reimbursement. The 2027 final rule’s additional 2.31% reduction in the conversion factor is yet another example of a reimbursement system that has failed to keep pace with the economic realities of practicing medicine. Since 1999, the Medicare physician fee schedule conversion factor has declined in nominal dollars and lost about half its purchasing power when adjusted for inflation. Meanwhile, the costs of operating a medical practice, including employee compensation, benefits, medical supplies, liability insurance, regulatory compliance and growing administrative demands, have risen dramatically.
Compounding these pressures are increasingly burdensome insurer practices, including claim denials, prior authorization obstacles and coverage policies that often conflict with established standards of care. Physicians remain responsible for patient outcomes while having less control over treatment decisions and limited practical recourse against insurers. Because of these cumulative pressures, my wife and I are now seriously considering closing our independent practices within the next two to three years. Together, our practices have served more than 20,000 patients. Their closure would mean the loss of two independent healthcare providers, the displacement of dedicated employees and the disruption of longstanding patient relationships.
The continued reduction in physician reimbursement raises a fundamental question: Is preserving independent medical practice still a priority for healthcare policymakers? Whether intentional or not, these policies increasingly favor large healthcare institutions with the financial resources to absorb rising costs and administrative burdens, while making independent practice less and less sustainable.
After decades of caring for patients and investing in our communities, my wife and I have the option of retiring. Many younger physicians do not have that luxury. My greatest concern is not what happens to physicians like us who are nearing retirement. It is what happens to the patients we leave behind and to the next generation of physicians, who may never have a realistic opportunity to practice independently. If policymakers truly value patient choice, continuity of care, competition and access to quality healthcare, they must recognize that independent practices cannot survive indefinitely under these economic conditions. Otherwise, their continued disappearance will be the entirely predictable consequence of these policies.
Praveen Reddy, MD. CEO of Center for Minimally Invasive Neurosurgery (Harris County, Texas): The baseline 2.31% cut to the conversion factor, compounding decades of pay declines that haven’t been adjusted for inflation, is unsustainable for independent specialty care. What stands out as particularly damaging to neurosurgery is the 20% penalty on modifier 25 same-day services. In our field, when a patient presents with severe, acute pain, performing a same-day minor procedure or injection is standard, compassionate care that saves the patient an extra trip and unnecessary suffering. Penalizing practices for providing efficient, single-visit care forces a terrible choice: absorb severe financial losses or deliberately spread care across multiple appointments.
Ultimately, these continuous cuts don’t save the system money. They accelerate the destruction of independent private practices. They push more community neurosurgeons into hospital employment, driving up consolidated facility costs and severely restricting patient access to timely, specialized surgical evaluations. In the end, this will drive costs up, not down.
Amanda Ryan, DO. Interventional Cardiologist and CEO of the Advanced Heart and Vascular Center of New Mexico (Carlsbad): As a physician leader of a large, rural independent cardiovascular practice serving 20,000 patients, my primary takeaway is a mix of deep frustration over escalating financial pressure and mild relief that some of the most severe proposed cuts were dialed back. A finalized 2.31% cut to the baseline conversion factor, combined with a new 20% penalty on same-day services, threatens our independent practice’s sustainability and patient access to care here in southeastern New Mexico.
Charles Taunt, DO. Hip and Knee Replacement Surgeon at Michigan Orthopedic Center (Lansing): As a hip and knee replacement surgeon, I find the final rule very disheartening. I’ve worked my entire 25-year career to better the lives of my patients and to keep learning how to do so with better outcomes and better safety. The 10% to 12% reimbursement cut this year, combined with the 7% cut last year, devalues all the work we have done to improve and the quality of life we give our patients.
As a private practice hip and knee arthroplasty surgeon, I expect these pay cuts to put significant pressure on our practice. A combined reimbursement cut of more than 20% has compromised our ability to see patients quickly and to staff our clinics so patients get the high-quality experience we want them to have. We simply can’t afford to provide all the resources to patients that we have in the past.
Finally, the very curious decision to increase ASC reimbursement by 2.3% while decreasing individual physician reimbursement leaves us in a situation where the only financially feasible option is to keep moving our patients and our work into our ASC. That takes work away from our local hospital, which also needs the volume financially. I am personally very torn. When I have chest pain or a family member is ill, I want them to have a good hospital in our community to go to, and at some level that requires the support of my business. But CMS is now steering strongly toward directing all of our business to the ASC, which hurts the local hospital. It’s quite a conundrum.
Alexander Vaccaro, MD, PhD. President of Rothman Orthopaedics (Philadelphia): The most troubling aspect of CMS’ 2027 physician fee schedule final rule is that the reduction in physician reimbursement is even greater than originally proposed. In July, CMS projected a 1.68% reduction in the conversion factor for most physicians. The final rule instead reduces the conversion factor by 2.31%, from $33.40 to $32.63. Physicians participating in qualifying advanced alternative payment models will see a somewhat smaller reduction of 1.83%. Much of this decline results from the scheduled expiration of the temporary 2.5% Medicare physician payment increase enacted for 2026. Nevertheless, the consequences for physicians and their patients remain significant.
These reductions follow CMS efficiency adjustments that have already lowered the work RVUs assigned to many surgical and procedural services. At the same time, physician practices continue to face rising expenses for staffing, medical supplies, technology, regulatory compliance and professional liability. Unlike many other Medicare payment systems, the physician fee schedule does not give physicians an automatic annual inflation adjustment tied to the actual cost of delivering care. As a result, the purchasing power of Medicare physician reimbursement has eroded substantially over time. We are asking physicians to deliver increasingly sophisticated care, meet expanding administrative requirements and maintain high quality standards while reimbursement fails to keep pace with the cost of providing those services.
Two additional provisions are particularly concerning for orthopedic practices and the older patients we serve. The first is the new 20% payment reduction for certain evaluation and management services billed on the same day as a procedure using modifier 25. Although CMS appropriately reduced its originally proposed 50% penalty and limited the final policy to zero-day global procedures, the remaining reduction is still problematic. Consider a 70-year-old patient with symptomatic knee osteoarthritis who undergoes a medically necessary evaluation and receives a corticosteroid injection during the same appointment. When the evaluation is significant and separately identifiable, providing both services in one visit is efficient, clinically appropriate and convenient for the patient. Medicare should encourage this coordinated approach rather than create financial disincentives for it.
The second concern is CMS’ decision to phase out the indirect practice cost index over two years and change the methodology used to allocate indirect practice expenses. Although CMS describes these changes as efforts to improve payment accuracy, their financial consequences may vary substantially across specialties and practice settings. Orthopedic practices maintain significant infrastructure, including clinical staff, equipment, administrative support and the facilities needed to deliver complex musculoskeletal care. Any payment methodology that fails to recognize these expenses risks further undermining the financial viability of independent physician practices.
These policies also affect more than individual physician reimbursement. Large multispecialty organizations may be better positioned to absorb declining margins, but smaller independent practices often have fewer financial resources to withstand sustained payment pressure. Over time, inadequate reimbursement may accelerate consolidation and physician employment by hospitals, health systems or corporate entities. That could ultimately increase healthcare spending and reduce patient choice, particularly when services migrate from lower-cost physician offices to more expensive hospital-based settings.
I also disagree with the implication that reducing reimbursement for procedural care necessarily advances the transition from volume to value. A total hip replacement that restores mobility and independence, or a spinal decompression that relieves disabling radicular pain, is some of the highest-value care in modern medicine. These interventions can dramatically improve quality of life, reduce disability and help patients regain meaningful function. Value should be measured by patient outcomes, appropriateness of care, durability of benefit and total cost, not simply by whether a service is procedural or cognitive.
The fundamental problem is that Medicare physician payment remains disconnected from the economic realities of medical practice. Congress must act before Jan. 1, 2027, to prevent further erosion of physician reimbursement and establish a sustainable, inflation-sensitive payment framework. Protecting access to high-quality specialty care, preserving independent medical practice and ensuring Medicare beneficiaries can get timely treatment should be bipartisan priorities. Without meaningful reform, the cumulative effect of these policies threatens not only the physicians who provide care but also the patients who depend on them.
Geogy Vennikandam. CEO of GI Partners of Illinois: What stands out most is the 2.31% reduction in the conversion factor for physicians outside qualifying advanced alternative payment models, driven largely by the expiration of the temporary 2026 increase. For independent, physician-led organizations like GI Partners of Illinois, that adds pressure on our ability to invest in staff, technology and timely patient access. We support rewarding prevention and coordinated care, but those goals require financially sustainable specialty practices. My concern is that continued reimbursement pressure will accelerate consolidation and leave patients with fewer choices for independent care in their communities.
Alon Weizer, MD. Senior Vice President and Chief Medical Officer of Mount Sinai Medical Center (Miami Beach, Fla.): CMS is sending a strong message that it supports efforts to drive primary care and risk models that pay for outcomes and quality and move rapidly away from fee-for-service. The emphasis on ACO models, the impact on 340B and initial efforts to address site neutrality signal that for health systems to keep succeeding, they need to invest in care models that address the full continuum of care and distributed care outside the four walls of the hospital. Health systems will need to be nimble to stay relevant and successful in a changing payer landscape. At Mount Sinai, we are investing in primary care, remote patient monitoring and home-based models to adjust to the evolving landscape and optimize care for the patients we serve in a financially sustainable way.
Courtney Younglove, MD. Heartland Weight Loss (Overland Park, Kan.): Like most healthcare policy changes CMS has implemented over the past few decades, this isn’t going to lower the cost of healthcare, and it will further harm patient care. It’s lipstick on a pig and a distraction from a deeper underlying problem. Excessive physician compensation is not the reason for the out-of-control growth in healthcare costs, and policies that further reduce physician compensation will not curb those costs. We’ve seen this before, and it ultimately hurts individuals.
Commercial carriers will adopt the same policies. Administrative costs will rise as hospital systems figure out how to implement the changes and recoup the lost funds elsewhere, leading them to demand higher reimbursement from commercial carriers. The big insurers will be happy to pay, because they can recoup those increases by raising premiums. Smaller employers that can’t afford the increases will stop offering health benefits, which hurts individuals. Larger employers that must offer these benefits will either recoup the costs by limiting raises or consolidating positions, or shift to plan designs with higher out-of-pocket costs. Both outcomes hurt individuals.
Independent practices have been hurt the most by CMS’ policy changes. They have no leverage to negotiate better contracts with commercial carriers and must bear the administrative burden while their reimbursement is cut. A handful will stop accepting Medicare or move to a direct-pay model, but the likely outcome is consolidation into large healthcare organizations. That will further drive up the overall cost of care, because commercial carriers pay health systems much more than they pay independent practices. Consolidation has been shown to increase costs.
These policies will also hurt patients as they trickle down into the day-to-day practice of medicine. Administrators focused on extracting as much money as possible from CMS and commercial carriers will tell physicians not to perform procedures on the day of the visit and to have patients return another day instead. That doubles the patient’s time burden and increases their cost of care, since it requires two separate encounters with two separate copays. Scheduling difficulties, time commitments and higher out-of-pocket costs will cause many patients to delay returning, which will hurt the quality of care. Many won’t return at all.
It’s easy to blame physicians for skyrocketing healthcare costs. After all, we consistently make six figures, far more than the average American, and patients see money flow from their hands to ours through copays and deductibles. But very few physicians make individual clinical decisions based on policy. Many will keep performing procedures on the day of the original appointment, knowing administrators will reprimand them. Those unwilling to risk their careers will follow the rules. Both scenarios will deepen the moral injury physicians feel across the board, and that injury is pushing more physicians to leave medicine early for professions that better align with their values, which further reduces access to care.
Repeating the same old song and dance, layering more regulation onto a system already breaking under regulation and perverse incentives, will do nothing to improve healthcare costs for the average American. Either CMS is unable or unwilling to step back and look at the problem through a different lens, or its recommendations are being influenced by those in the industry who benefit from the current system.
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