Medicare proposes cutting payments for same-day care visits
Medicare’s proposed 2027 physician fee schedule introduces a payment rule that could split patient visits into two separate appointments, even when combined care is medically justified. The policy states that if a practice bills for both an office visit and a procedure on the same day, Medicare will pay the higher-valued service in full while reducing the other payment by half. This change applies universally to all providers billing for same-day services, adding financial strain to an already pressured reimbursement system.
The rule directly targets scenarios like a dermatologist performing a skin biopsy during a routine examination. Currently, Medicare reimburses both the visit and the procedure separately. Under the proposed change, Medicare would pay the higher-valued service in full and cut the other payment by half. Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, says this could force providers to delay procedures or instruct patients to return for a second visit, even when consolidated care is clinically appropriate.
Gilberg identified the same-day payment proposal as the most concerning aspect of the draft rule. Public feedback on the proposal ended on September 14, with Gilberg anticipating the final fee schedule by November 1. Whether Medicare modifies or retains this provision will determine its ultimate impact on patient care and provider finances.
Providers brace for workflow disruptions
Opposition to the rule has organized under the Same Day Care Coalition, which argues the policy disrupts established workflows without delivering measurable benefits for patients. Gilberg acknowledged that Medicare could still revise the rule before finalization but advised practices to prepare for potential implementation.
The proposed rule also revises how Medicare calculates practice expenses, covering overhead, staffing, and supply costs that influence reimbursement for non-procedure services. Gilberg stressed that these adjustments, though technical, directly affect a practice’s operational sustainability.
A parallel development is the Ambulatory Specialty Model, set to launch on January 1 as a mandatory payment bundle for select specialty services. However, the list of participating practices remains unpublished, leaving providers in the dark until late December notifications arrive through a portal. Gilberg warned that this lack of transparency introduces unnecessary operational uncertainty.
Budget neutrality and bipartisan reform efforts
The rule also strengthens budget neutrality requirements, which cap total Medicare payments to physicians. Gilberg cited a recent case where a $20 million threshold in the law prevented Congress from correcting a $1 billion overestimation in add-on code usage, leaving physicians without reimbursement for those extra costs. He also covers the budget neutrality rules that keep pitting specialties against one another, what the bipartisan Patients First Act would change, and the artificial intelligence policies every practice should put in writing before staff start using tools like ChatGPT.
The Patients First Act, a bipartisan proposal introduced by the doctors’ caucus, seeks to address some of these systemic flaws. The bill would align annual fee schedule updates with the Medicare Economic Index, overhaul quality reporting standards, and modify budget neutrality rules. Gilberg called it a constructive step but emphasized that its passage remains uncertain. Without legislative action, smaller adjustments—such as the same-day payment change—will be increasingly difficult for providers to challenge.
Gilberg will address these changes at the MGMA Annual Conference in San Antonio from September 27 to 30, marking the association’s 100th anniversary. The event features sessions on practice management, artificial intelligence governance, and policy updates. While the conference emphasizes operational strategies, Gilberg’s guidance for providers is direct: establish clear policies for AI tool use, ready staff for potential payment shifts, and anticipate last-minute rule adjustments.
One immediate concern is the expiration of the work geographic price index floor, which adjusts payments based on regional cost variations. With the current floor set to expire and a retroactive fix planned for 2024, billing complications may arise. Gilberg also highlighted the phase-out of the alternative payment model incentive bonus, warning that its removal could further strain smaller practices already adjusting to broader payment reforms.
