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By Suzanne Blake
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Doctors who treat Medicare patients face a reduction in federal reimbursement rates next year under a newly finalized rule, which could possibly threaten seniors' access to care.
The Centers for Medicare & Medicaid Services (CMS) released its final 2027 Medicare Physician Fee Schedule on Wednesday, establishing a scheduled drop in the conversion factor used to calculate provider compensation.
Under the regulation, baseline payment rates for most physicians will fall by approximately 2.3 percent compared with 2026 levels. For clinicians participating in qualifying alternative payment models, the reduction will be roughly 1.8 percent beginning January 1.
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Why It Matters
Medicare payment levels can ultimately affect patients' ability to find doctors willing to treat them, particularly in independent practices and specialties already struggling with rising operating costs.
The issue is especially important for seniors because doctors generally cannot simply charge Medicare patients more to compensate for lower Medicare reimbursement. The payment rates could invariably affect whether a specific doctor practice continues accepting Medicare patients though, meaning major impacts on seniors’ healthcare are possible.
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How Much Is Medicare Cutting Doctor Pay?
For 2027, the Medicare conversion factor for doctors who are not qualifying alternative payment model participants will fall from roughly $33.40 to $32.63, a decline of about 2.31 percent.
For alternative payment model doctors, the conversion factor will fall from approximately $33.57 to $32.95. That’s a drop of about 1.83 percent.
“Seniors may not notice in the short term an immediate difference in their coverage, but lower reimbursements could put additional financial pressure on medical practices, potentially leading some physicians to limit new Medicare patients or lessen the services they can afford to provide,” Alex Beene, a financial literacy instructor for the University of Tennessee at Martin, told Newsweek.
The cuts are larger than CMS proposed in July. At the time, the agency projected reductions of roughly 1.68 percent for most doctors and 1.19 percent for qualifying alternative payment model participants.
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How Could the Medicare Rule Affect Your Care?
For Medicare beneficiaries, nothing in the rule automatically means their doctor will stop seeing them or that their benefits are being cut.
But some physician organizations say payment pressure can have indirect consequences for patients if practices respond by reducing appointments available or limiting the number of Medicare patients they accept.
American College of Cardiology president Roxana Mehran said in a statement that the medical association "is deeply disappointed that CMS finalized several policies that will make it harder for cardiovascular clinicians to deliver the care their patients need."
Mehran continued: "At a time when cardiology practices continue to face significant cost pressures, inadequate recognition of inflationary pressures, implementation of the Ambulatory Specialty Model without additional testing, reductions in payment for key cardiovascular services, and restrictions on remote physiologic monitoring risk reducing access to essential cardiovascular services and adding further strain to the health care system."
Independent practices could be especially sensitive to lower reimbursement because they are forced to absorb costs for higher employee wages, medical supplies and malpractice insurance.
“The short-term issue is the structures behind it. If you show me the incentive, I will show you the outcome,” Kevin Thompson, the CEO of 9i Capital Group and the host of the 9innings podcast, told Newsweek. “I truly believe care should not have a financial incentive attached. In the long run, care will become tailored to a specific result, and those who are disastrously ill may not receive the care they need due to the financial incentives behind the scheme.”
Beene added that in the long term that "if Medicare payments continue falling behind the actual cost of healthcare, beneficiaries could face longer waits, fewer participating options, and greater difficulty accessing care, particularly in rural and underserved communities where healthcare options are already limited."
Are Any Medicare Payments Increasing?
While the overall conversion factors are falling, CMS has increased its qualifying base evaluation and management payments by 16 percent, or by 32 percent for qualifying practitioners participating in certain accountable care arrangements.
"Medicare should reward clinicians for keeping people healthy," Health and Human Services (HHS) Secretary Robert F. Kennedy Jr. said when announcing the rule. "Under President Trump's leadership, we are putting prevention and primary care at the center of Medicare, closing payment loopholes, and cracking down on waste."
Meanwhile, CMS administrator Dr. Mehmet Oz said the rule "breaks from that status quo," adding that "by ending duplicate billing and closing costly loopholes, we are protecting taxpayers and directing Medicare dollars to clinicians doing the hard work of keeping patients healthy.”
Newsweek*’s reporters and editors used Martyn, our AI assistant, to produce this story. Learn more about Martyn here.* Contact Newsweek editors for this story: Jason Lemon and Anthony Murray.
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