Midyear Federal Advocacy Update - August 2026-Summary

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The AAOE midyear federal advocacy update warns that the 2027 Medicare Physician Fee Schedule proposal would create a combined 8.9% cut to orthopedic surgery. The main drivers are a lower conversion factor and CMS reductions in work RVUs for high-volume joint replacement codes, especially hip, knee, and shoulder replacements. Comments on the proposal are due September 14, the final rule is expected November 1, and implementation would begin January 1, 2027.<br /><br />Key policy concerns include:<br />- Lower payment conversion factor after the 2026 congressional increase expires.<br />- Large reductions for joint replacement codes, with some top-billed hip and knee codes falling about 20%.<br />- New same-day global billing rules that pay the highest service at 100% and additional services at 50%.<br />- Stricter requirements for remote patient monitoring and remote therapeutic monitoring, including limits on third-party arrangements.<br />- A rebuilt practice expense methodology with phased-out indirect practice expense allocation and a 5% cap on annual RVU movement.<br />- A planned end to traditional MIPS after 2028, pushing practices toward MVPs or MIPS APMs.<br /><br />The update also highlights mandatory CMS models already moving forward:<br />- The Ambulatory Specialty Model, starting January 2027 for certain specialists.<br />- CJR-X, a mandatory joint replacement model for acute care hospitals.<br /><br />On the congressional side, payment relief may attach to government funding or health extender legislation, but timing is uncertain. The Patients First Act is described as the first major reform bill, though its prospects are unclear.<br /><br />Recommended actions for practices include submitting a single practice-wide comment letter, budgeting for the proposed cuts, auditing all remote monitoring contracts, checking for ASM participation, reviewing same-day global billing, preparing for an MVP or MIPS APM pathway, and meeting with members of Congress during August recess.

Keywords

AAOE

Medicare Physician Fee Schedule

orthopedic surgery cut

conversion factor

work RVUs

joint replacement codes

same-day global billing

remote patient monitoring

MIPS reform

Ambulatory Specialty Model