The CMS issued a final rule on November 4 that decreases Medicare payment conversion factors by 1.83% for Advanced Alternative Payment Model participants and 2.31% for non-APM participants, effective January 1, 2027, while modestly increasing reimbursement for certain radiology services.
- Conversion factor decreases: 1.83% for APM participants and 2.31% for non-APM participants starting January 1, 2027
- Radiology gains: Diagnostic radiology increases 1%, interventional radiology 3%, nuclear medicine 1%, and radiation oncology 2%
- Modifier 25 changes: CMS will cut payments by 20% when office visits are billed with modifier 25 on the same day as certain procedures
- RUC recommendations: CMS finalized AMA RUC-recommended values for radiology services and rejected removal of robotic linear accelerator codes
- Information request: CMS issued request for stakeholder input on duplicate laboratory testing, imaging, and interoperability concerns
The U.S. Centers for Medicare & Medicaid Services (CMS) on November 4 issued its final rule that sets in stone policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues.
The rule becomes effective on January 1, 2027, and includes a 1.83% conversion factor decrease for services provided by a qualifying Advanced Alternative Payment Model (APM) participant, as well as a 2.31% conversion factor decrease for non-APM participants.
The American College of Radiology (ACR) outlined some impacts of policy changes in the rule that “appear to be positive” for radiology. These include conversion increases of 1% for diagnostic radiology, 3% for interventional radiology, 1% for nuclear medicine, and 2% for radiation oncology.
The ACR noted that CMS did not include an overall specialty-level impact table in this year’s final rule.
“Instead, they posted tables on the CMS website in text file format,” the college said in its initial summary. “Note that actual impacts may be less due to the conversion factor decrease. ACR will request a more readable file from CMS to verify these impacts.”
Both conversion factors are decreasing due to the expiration of the one-year 2.5% conversion factor increase mandated by statute in CMS’ final rule for the 2026 calendar year.
Anders Gilberg, senior vice president of government affairs for the Medical Group Management Association (MGMA), said the association is disappointed by CMS’s decision to finalize "several destabilizing policies."
Gilberg said the conversion factor cuts “further degrade an already fragile payment system and amplify severe financial challenges caused by years of inadequate Medicare reimbursement.”
“Compounding this ongoing reimbursement decline, CMS will cut payments by 20% when office visits billed with modifier 25 are performed on the same day as certain procedures, interfering with physician practices’ ability to offer same-day care,” he added.
Gilberg called for Congress to intervene to prevent further harm by fixing cuts to the conversion factor, along with changes to modifier 25. He also said Congress should prioritize comprehensive reform to the Medicare Access and CHIP Reauthorization Act by passing the Patients First Act to prevent annual disruption.
Other updates in final rule
Among other changes in the final rule, CMS finalized the American Medical Association (AMA) Relative Value Scale Update Committee (RUC)-recommended values for radiology-related services such as fine needle aspiration, MRA head and neck, and CT upper extremity codes.
CMS also rejected the RUC's recommendation to remove codes related to image-guided robotic linear accelerator stereotactic radiosurgery (HCPCS codes G0339 and G0340). It cited the high use of these codes and billing disruption concerns.
CMS also issued a request for information on duplicate laboratory testing, imaging, and result sharing and interoperability. CMS said it will gather input from stakeholders, with imaging healthcare providers in the mix, to inform potential actions that will address these concerns.
“Diagnostic imaging and laboratory test results are frequently siloed within acquiring electronic health record systems, leaving treating healthcare providers unaware of their existence and unable to access them across care settings,” CMS said. “This inaccessibility leads to incomplete or delayed care management, duplicative testing, increased program costs, and, potentially, unnecessary radiation exposure to patients.”
HOPPS update
CMS also released its Hospital Outpatient Prospective Payment System (HOPPS) final rule, with policies taking effect on January 1.
Among the updates include a site-neutral payment policy for certain non-contrast imaging services in excepted off-campus hospital outpatient departments. Beginning in 2027, CMS will pay the Physician Fee Schedule-equivalent rate for these services (ambulatory payment classification 5521 through 5524). These include certain bone density scans, x-rays, ultrasounds, CT scans, and MRIs. Rural sole community hospitals are exempt from the policy.
CMS said it estimates the change will reduce Medicare Part B expenditures by about $260 million in the first year.
The ACR in its initial summary of the finalized HOPPS rule highlights the finalized $99.970 OPPS conversion factor.
