This afternoon, the Centers for Medicare & Medicaid Services (CMS) released the Calendar Year (CY) 2027 Medicare Physician Fee Schedule (PFS) proposed rule. STS has put together a summary of key provisions affecting cardiothoracic surgery in the rule.
Physician Payment
As required by statute starting in CY 2026, there are two separate conversion factors (CFs): one for physicians and practitioners participating in qualifying alternative payment models (or QPs) and one for those who are not (non-QPs). For CY 2027, CMS has proposed a conversion factor (CF) of $32.84 for non-QPs and $33.16 for QPs.
While this is the second year in a row we are seeing base CF updates, as required by statute, the conversion factor for physicians will actually decrease due to the expiration of the temporary 2.5 percent increase for CY 2026, even though the formula incorporates positive base updates.
Additionally, other policies continue to diminish hospital-based proceduralists’ reimbursement. Policies such as the efficiency adjustment and reductions to practice expenses continue to threaten surgeons’ ability to practice. Reimbursement also continues to lag inflation. STS is working with the broader physician community and members of the Republican and Democratic Doctors Caucuses to reform physician reimbursement.
Surgical Global Codes
CMS continues to question the valuation of 10- and 90-day global surgical codes. While it does not make any proposal to conduct an across-the-board revaluation at this time, CMS states that it is interested in how “CMS could 'right-size' payments for the globals over time to ensure they remain aligned with current clinical practice and resource costs, are more readily updated based on empirical data, and do not obscure differences in cost and value across settings of care.” STS has consistently pushed back against efforts to reduce payments in surgical global periods, advocating for accurate valuation of surgical services and policies that reflect the complexity, intensity, and longitudinal care provided by cardiothoracic surgeons.
Quality Payment Program (QPP)
CMS is proposing to sunset the traditional Merit-based Incentive Payment System (MIPS) reporting option in 2029 and is pushing forward with its efforts to transition all MIPS participants towards MIPS Value Pathways (MVPs), which will be reported by subspecialty.
Inpatient Only (IPO) List in Hospital Outpatient Rule
CMS also recently released the CY 2027 Hospital Outpatient Prospective Payment System (OPPS) rule. Hospitals that meet their outpatient quality reporting requirements will receive a 2027 payment increase of 2.4%.
Additionally, CMS has long maintained an Inpatient Only (IPO) list identifying services that are not payable under the OPPS because they must be performed on an inpatient basis. In last year's rulemaking, CMS finalized the elimination of the IPO list over three years, suggesting it gives physicians greater flexibility in determining the most clinically appropriate site of care.
As codes are removed from the IPO list, CMS is pricing them for reimbursement in the hospital outpatient and Ambulatory Surgical Center (ASC) settings. Removal from the list does not mean that the procedures cannot be performed in the hospital inpatient setting, only that, if safe for the patient, they may now be performed in and paid for in the outpatient or ASC setting.
CY 2027 marks the second year of this transition. Of particular interest to STS members, CMS is proposing to remove services from the respiratory, mediastinum, diaphragm, digestive, lymphatic, and endocrine clinical families, which include virtually all of the general thoracic procedures. Removal from the IPO list does not require that surgeries for Medicare patients be performed in the outpatient setting.
However, STS continues to have significant concerns that removal of CT surgery from the IPO list could impact patient safety and result in other insurers dictating where surgeries are performed without proper safeguards or clinical input.
