This article was originally published on July 14, 2026, and has been updated with information as of Nov. 5.
The Centers for Medicare and Medicaid Services (CMS) has released the Calendar Year (CY) 2027 Medicare Physician Fee Schedule and Outpatient Prospective Payment System Final Rules. STS has compiled a comparison of the rule’s final key provisions affecting cardiothoracic surgery compared to the proposals.
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.
The conversion factor for physicians will decrease due to the expiration of the temporary 2.5 percent increase for CY 2026.
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.
Final:
CMS finalized the CY 2027 PFS qualifying APM participant conversion factor (QP CF) to be $32.9548 (a 1.83% reduction relative to the 2026 CF), and the non-QP CF to be $32.6286 (a 2.31% reduction relative to the 2026 CF), which reflect the loss of the temporary 2.5 percent increase that applied in CY 2026 and a budget neutrality adjustment of - 0.12 percent.
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.
Final:
CMS will officially sunset the traditional Merit-based Incentive Payment System (MIPS) reporting option beginning with the CY 2031 performance period.
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.
Final:
CMS finalized an update to the OPPS payment rates for hospitals that meet applicable quality reporting requirements by 2.3%. Additionally, CMS finalized its proposal to remove 637 services from the following clinical families: auditory, digestive, endocrine, female genital, hemic and lymphatic systems, integumentary, male genital, maternity care and delivery, mediastinum and diaphragm, respiratory, and urinary. STS will continue to dig further to see if CMS has accepted our recommendations on specific codes impacting general thoracic surgeons.
