CMS Proposes Changes to Practice Expense Methodology

ACR® developed a detailed summary of the 2027 Medicare Physician Fee Schedule (MPFS) proposed rule that outlines Medicare payment provisions and updates to the Quality Payment Program, focusing on provisions that impact imaging services. If finalized, the updates and changes included in the proposed rule, released by CMS July 14, take effect Jan. 1.

One key change in the rule is CMS’s proposal to modernize the practice expense methodology by gradually removing reliance on specialty surveys and replacing them with a system based more on current, auditable cost data. CMS expressed concern with the accuracy of data collected through the most recent AMA Physician Practice Information Survey. The agency contracted with RAND Corporation to review the practice expense methodology and consider alternative methods to improve its accuracy. In its report, Expanding Technical and Professional Components to all Medicare Physician Fee Schedule Services, RAND discusses its findings and proposals about how to improve the accuracy of MPFS payments.

As a result, CMS proposes to remove the steps from the current practice expense methodology that rely on survey data and transition this change over two years. In addition, the proposal includes application of a stabilization adjustment to the practice expense relative value units to reduce volatility by capping any increase or decrease to these relative value units at 5% each year.

ACR continues to run analysis on the impact of the proposed changes on radiology. However, CMS estimates that the relative value unit changes have a positive impact on radiology, interventional radiology, nuclear medicine and radiation oncology.

If you have questions about the proposed rule or for more information, contact Katie Keysor, ACR Senior Director of Economic Policy.