New Medicare Payment Rule Could Reduce Doctor Reimbursement: What It Means for Patients

Doctors who see Medicare patients are set to receive lower federal reimbursement rates next year under a newly finalized rule, raising concerns that seniors could face tougher access to care.

The Centers for Medicare & Medicaid Services (CMS) finalized its 2027 Medicare Physician Fee Schedule, locking in a lower conversion factor used to determine what providers are paid.

According to the rule, baseline payment rates for most physicians will decline by about 2.3 percent from 2026 levels. For clinicians in qualifying alternative payment models, the decrease will be about 1.8 percent starting January 1.

Why It Matters

Medicare reimbursement levels can influence whether doctors continue accepting Medicare patients, especially in independent practices and specialties already under pressure from higher operating costs.

The issue is particularly significant for seniors because doctors generally cannot simply raise prices for Medicare patients to offset lower federal payments. In some cases, the rates can affect whether a practice keeps taking Medicare patients at all, which could have broad consequences for seniors’ access to healthcare.

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How Much Is Medicare Cutting Doctor Pay?

For 2027, the Medicare conversion factor for doctors who are not in qualifying alternative payment models will drop from about $33.40 to $32.63, a decline of roughly 2.31 percent.

For doctors in alternative payment models, the conversion factor will fall from around $33.57 to $32.95, or 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 at the University of Tennessee at Martin, told Newsweek.

The reductions are steeper than CMS had proposed earlier, when the agency estimated cuts of about 1.68 percent for most doctors and 1.19 percent for qualifying alternative payment model participants.

How Could the Medicare Rule Affect Your Care?

For Medicare beneficiaries, the rule does not automatically mean their doctor will stop treating them or that their benefits are being reduced.

Even so, physician groups say payment pressure can have indirect effects if practices respond by scheduling fewer appointments or accepting fewer Medicare patients.

American College of Cardiology president Roxana Mehran said in a statement that the 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 added: “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 may be especially vulnerable to lower reimbursement because they must absorb higher labor costs, 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, CEO of 9i Capital Group and 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 also said that over time, if Medicare payments continue to lag behind the real cost of healthcare, beneficiaries could see longer waits, fewer choices, and more difficulty getting care, especially in rural and underserved areas where options are already limited.

Are Any Medicare Payments Increasing?

Although the overall conversion factors are declining, CMS has raised its qualifying base evaluation and management payments by 16 percent, or by 32 percent for qualifying practitioners in certain accountable care arrangements.

“Medicare should reward clinicians for keeping people healthy,” Health and Human Services 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.”

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.”