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LUGPA Policy Alert - LUGPA Urges CMS to Reconsider Key CY 2027 Medicare Physician Fee Schedule Proposals

September 2026

At a Glance

What Happened

On September 14, LUGPA submitted comments to CMS on the proposed CY 2027 Medicare Physician Fee Schedule, highlighting several proposals that could affect payment for office-based care, ASCs, procedures, supplies, and postoperative services.

Why It Matters

CMS estimates the proposed rule would reduce urology's RVU-based allowed charges by approximately 2%, before the conversion-factor changes. Several proposals could disproportionately affect office-based and ASC care.

LUGPA’s Focus

LUGPA is urging CMS to use accurate, current data and consider the actual costs of independent practices and ASCs before finalizing policies that could shift care to higher-cost hospital settings.

Key Issues for Urology

1. Modifier -25: Proposed 50% Payment Reduction

CMS Proposal: Reduce payment by 50% for the lower-valued service when a separately identifiable office/outpatient E/M service is furnished on the same day as certain procedures.

Why It Matters: Urology patients may require substantial, unexpected evaluation and counseling during encounters involving cystoscopy, biopsies, catheter procedures, and other treatments. A blanket 50% reduction could discourage appropriate same-day care and lead to separate visits, increasing patient travel, delays, copayments, and administrative burden.

LUGPA Position: Do not finalize the 50% reduction. If CMS moves forward, use a narrower, data-driven approach focused on demonstrably duplicative resources and protect urgent procedures, new patients, and clinically necessary same-day care.

2. Practice Expense and Site-of-Service Payments

CMS Proposal: Continue revising how indirect practice expenses are allocated between facility and non-facility settings, including consideration of the costs incurred by hospital-employed physicians.

Why It Matters: Independent practices continue to incur substantial office, staffing, compliance, and infrastructure costs. Broad reductions could make efficient physician-office and ASC care less viable and create incentives to shift services to higher-cost hospital settings.

LUGPA Position: CMS should:

  • Restore appropriate indirect PE recognition for services provided in ASCs.
  • Consider reducing indirect PE allocations for hospital-employed physicians whose costs are assumed by the health system.
  • Better distinguish independent practices from hospital-employed physicians.

3. Elimination of the IPCI

CMS Proposal: Remove the Indirect Practice Cost Index (IPCI) from the practice expense methodology and phase in the changes over two years.

Why It Matters: LUGPA agrees that updated practice-expense data are needed but believes CMS should collect better data before eliminating the existing methodology.

LUGPA Position: Retain the IPCI for CY 2027 and conduct a rigorous survey of current physician indirect costs before making major changes to the methodology.

4. G2211 Replacement and Longitudinal Care

CMS Proposal: Replace G2211 with two modifiers providing a 16% or 32% add-on payment for qualifying longitudinal care, with the higher adjustment available to certain ACO participants.

Why It Matters: Urologists provide ongoing care for complex conditions including cancer, neurogenic bladder, and recurrent stones. Specialists should have an equitable opportunity to receive payment for this work.

LUGPA Position: CMS should:

  • Ensure specialists have equitable access to the adjustments.
  • Allow the adjustment with valid modifier -25 encounters.
  • Avoid different payment for the same work based solely on ACO participation.

5. Cystoscopy Supply Pack

CMS Proposal: Reduce the SA058 cystoscopy supply-pack input from $75.67 in 2026 to $56.65 in 2027, followed by $37.63 in 2028.

Why It Matters: The reduction affects 38 codes and, combined with other proposed cuts, could make community-based cystoscopy less sustainable. It could also incentivize shifting procedures to higher-cost hospital settings.

LUGPA Position: Freeze SA058 at $75.67 while CMS reassesses the underlying invoice data and considers the cumulative impact of the reductions.

6. Global Surgical Payments

CMS Proposal: Continue evaluating data used to value services provided during global surgical periods.

Why It Matters: Postoperative work includes telephone calls, portal messages, medication management, and care coordination that may not be captured in CMS' data. A 2025 HHS OIG review also found substantial postoperative visits documented in medical records that were not reported to CMS.

LUGPA Position: CMS should improve its data and conduct additional analysis before making changes to global surgical payment.

The Broader Impact on Independent Urology

CMS projects approximately a 2% reduction in urology RVU-based allowed charges before conversion-factor changes, with non-facility services facing a larger projected reduction than facility-based services.

LUGPA is concerned about the cumulative effect of these policies on independent practices, particularly when combined with rising staffing, supply, technology, and administrative costs.

CMS should consider the impact on:

  • Total Medicare spending
  • Beneficiary cost sharing
  • Patient travel and access
  • Community-based care
  • Practice sustainability
  • Where care is delivered

LUGPA’s Advocacy

LUGPA supports CMS' efforts to improve site-of-service neutrality and address inappropriate payment differentials. However, payment reforms should be based on accurate data and should distinguish between independent practices and hospital-employed physicians.

LUGPA will continue engaging with CMS as the CY 2027 rule moves toward finalization and will keep members informed of developments.