Medicare releases 2027 physician fee schedule with ‘devastating’ cuts to radiologist payments

The Centers for Medicare & Medicaid Services released the proposed 2027 physician fee schedule on Tuesday, which includes potentially problematic cuts to radiologist payments. 

CMS is suggesting a conversion factor, used to calculate rad reimbursement, of approximately $32.84 next year. This represents a roughly -1.68% (or $0.56) reduction from the figure used in 2026, the agency estimates. Physicians participating in alternative payment models—which reward providers for high-quality, cost-efficient care—will see their conversion factor fall to $33.17, down -1.19% (or $0.40) from 2026.

CMS said these reductions result from the expiration of a one-time, 2.5% doc pay bump under the Working Families Tax Cut Act. The Society of Interventional Radiology, which represents over 8,000 rads, on Tuesday urged Congress to “act immediately to halt this devastating proposal.” 

“America’s seniors deserve access to the best care possible, but CMS’ 2027 Medicare Physician Fee Schedule proposed rule puts our seniors at risk for losing access to their trusted physicians and proven treatments,” SIR said in a statement shared with Radiology Business July 14. “Once again, CMS has proposed cuts to the conversion factor and to interventional radiology services. These cuts ignore the burden that rising practice costs are placing on interventional radiology practices and our healthcare system writ large.”

Following Medicare’s announcement, the society is urging Congress to pass the Strengthening Medicare for Patients and Providers Act. Proposed in November, House Resolution 6160 would establish annual cost of living increases for physicians tied to the Medicare Economic Index, a measure of inflation. Experts note that doctors are the only provider type that does not get an annual raise in the Medicare program.

“We believe this bill will provide a long-term, equitable solution that provides a fair payment to physicians and ensures that the healthcare needs of America’s seniors are met nationwide,” SIR added Tuesday, noting that it continues to review the proposal.

More on the fee schedule

CMS said the proposed 2027 conversion factor for most docs includes a 0.25% annual update and a positive 0.53% budget-neutrality adjustment. For those taking part in alternative payment models, it incorporates a 0.75% annual update and 0.53% budget-neutrality increase.  

If the provisions are finalized, CMS estimates an positive payment impact of 2% for diagnostic radiologists, 2% for nuclear medicine, 3% for IR specialists, and 3% for radiation oncologists. The American College of Radiology issued a preliminary summary of the proposal late Tuesday, highlighting these figures. ACR noted that the rule also includes proposed changes to Medicare’s Quality Payment Program and the related Merit-Based Incentive Payment System. 

In particular, the agency is proposing to sunset traditional MIPS reporting in 2029, transitioning physicians toward the “more clinically meaningful, specialty focused” MIPS Value Pathways. When the Merit-Based Incentive Payment System first launched in 2017, its goal was to move Medicare away from a “fragmented fee-for-service system” toward one that “rewards quality, outcomes and value,” CMS said in a fact sheet. 

“Over the past decade, CMS has worked with clinicians to refine the program and reduce reporting burden,” the agency said July 14. “The proposed rule reflects that evolution by establishing MIPS Value Pathways as the primary reporting option in MIPS.”

In the rule, CMS also shared a new report it commissioned from the RAND Corp., titled “Expanding Technical and Professional Components to all Medicare Physician Fee Schedule Services. The agency contracted the research outfit to analyze how Medicare calculates the practice-expense component of reimbursement and propose potential alternatives. ACR noted that Medicare is proposing to allocate indirect practice expenses using both the work RVU (relative value unit) and clinical labor RVU for all services (except 10- and 90-day offerings). This instead of only using that methodology for services such as diagnostic imaging, which can be reported using technical, professional and global components. 

Imaging lobbyist Kit Crancer noted that the proposed practice-expense changes appear “positive” for diagnostic radiology. This is particularly the case for nonfacility and technical services and may offset some of the negative conversion factor impact, depending on site of care. 

“Interventional radiology reimbursement is also up meaningfully (nice change of pace),” Crancer, chair of the Radiology Patient Action Network, said in an email to RPAN members Tuesday. “Gratefully, the physician-work efficiency adjustment is not being applied to the technical component,” he added, referring to a controversial CMS plan to cut doc pay tied to efficiencies gained from AI and other new technologies. 

Crancer also noted that CMS is issuing a new request for information, targeting duplicate imaging exams and lab testing. The agency contends that diagnostic imaging results are “frequently siloed” within acquiring electronic health records systems. Often, interoperability challenges can leave treating healthcare providers unaware of their existence and unable to access them across different healthcare settings.

“This inaccessibility leads to incomplete or delayed care management, duplicative testing, increased program costs, and unnecessary radiation exposure to patients,” CMS said in its fact sheet. “We are issuing a [request for information] to gather input from stakeholders—including clinicians, laboratories, imaging healthcare providers, health systems, payers, health IT developers, and other interested parties—to inform potential actions aimed at addressing these interoperability and duplicate testing concerns.”

CMS noted in a separate news announcement that the 1,592-page proposed rule is now open for public comment, encouraging physicians and other stakeholders to provide feedback. The agency typically issues the final fee schedule in late October or early November, with it taking effect on Jan. 1, 2027.