MGMA details what practices face in January, from Medicaid work requirements to remote monitoring rules

Medicaid work requirements take effect Jan. 1, 2027. That is the same day payers must be ready to handle electronic prior authorization requests and, under a Centers for Medicare & Medicaid Services (CMS) proposal, Medicare would stop paying for remote monitoring performed by contracted staff.

"If you were using a contractor, there'd be a quick turnaround time to try to bring those in-house," James Haynes, J.D., an associate director of government affairs at the Medical Group Management Association (MGMA), said of the remote monitoring proposal.

He and Madison Hynes, M.P.P., also an associate director of government affairs, delivered MGMA's Washington update Sept. 27 at the MGMA Annual Conference 2026 in San Antonio.

Remote monitoring and the 2027 fee schedule

The proposed 2027 physician fee schedule would allow only a practice's own clinical staff to furnish remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services. That would bar the third-party vendors many practices contract with. CMS would also require an initiating visit before RPM or RTM services begin and revalue numerous monitoring codes, which Haynes said would amount to a cut.

CMS cited reports from the Office of Inspector General. Building the infrastructure and training staff to bring monitoring in-house could be expensive, Haynes said, and could reduce patients' access to the services.

Sens. Marsha Blackburn (R-Tennessee) and Mark Warner (D-Virginia), who sponsor the Rural Patient Monitoring Access Act, wrote to CMS warning that the changes could undermine patient access, Haynes said. MGMA filed comments on the proposal Sept. 14, and CMS is expected to finalize the rule in November.

The same rule would lower the conversion factor for most clinicians by 1.68%, to $32.84. For qualifying participants in advanced alternative payment models (APMs), the cut would be 1.19%, to $33.17. Most of the cut reflects the expiration of a 2.5% increase Congress provided for 2026 only.

MGMA wants an annual inflation-based update and a higher budget neutrality threshold. That threshold is now $20 million, which Haynes said has been in place for decades.

The rule would also pay every service except the most expensive at 50% when a visit billed with modifier 25 falls on the same day as a 0-, 10- or 90-day global procedure performed by the same physician or a physician in the same practice. MGMA opposes that proposal, the 25% alternative CMS floated and the conversion factor cut.

CMS would replace the G2211 add-on code, which Haynes said pays about $16, with modifiers that raise payment for the evaluation and management base code by 16%. The increase would be 32% for clinicians in the Medicare Shared Savings Program (MSSP) or the Long-term Enhanced ACO Design (LEAD) model.

CMS also proposed changing how it allocates indirect practice expenses, phasing out the Indirect Practice Expense Cost Index and adding a stabilization adjustment. MGMA asked for a pause because CMS provided no specialty-level analysis of the combined effect. The rule would also accept a new unbundled family of maternity care codes, which Haynes said raises issues with potential G codes. It would add G codes for advance care planning and change behavioral health coding.

MIPS and reporting

CMS proposed ending the Merit-based Incentive Payment System (MIPS) after the 2028 performance year. MIPS Value Pathways would become mandatory in 2029 for clinicians not participating in an APM. Large multispecialty groups would have to split into subgroups by specialty and report separately, while smaller multispecialty groups would be exempt. Haynes said the subgroup requirement would be administratively problematic and costly.

For 2027, the 75-point MIPS performance threshold would stay. Clinicians would have to report one CMS-designated core measure, from a list Haynes put at about 78, in place of an outcome or high-priority measure.

CMS left the cost category largely unchanged, though MGMA has long pushed to reform it. In the Promoting Interoperability category, CMS would drop the security risk analysis attestation, and the electronic prior authorization measure would be optional at first, Haynes said.

CMS also proposed determining qualifying APM participant status for each combination of tax identification number and National Provider Identifier (NPI) instead of by NPI alone. Practices with clinicians who work for more than one group would have to track status for each combination, Haynes said. MGMA believes the change could discourage APM participation.

Value-based care

In the MSSP, CMS proposed raising the shared savings rate in Level E of the BASIC track from 50% to 60%. It also proposed lowering the maximum weight on regional adjustments to 35% in the ENHANCED track.

Other proposals would assign more beneficiaries to accountable care organizations (ACOs). Benchmark changes would reward ACOs that lower spending, treat high-cost patients or recruit clinicians new to value-based care. The proposals would also extend current quality reporting options during the shift to digital measures, and CMS backed off earlier plans to require Promoting Interoperability reporting in the program.

Haynes described several of the changes as relatively positive. He said the growth adjustment could prompt outreach to groups that haven't been in value-based care.

The CMS Innovation Center is focused on cost savings beyond its physician-focused models and is testing technology initiatives involving artificial intelligence (AI), Hynes said. It has reduced payment in some shared savings and advanced APM arrangements, terminated a few models earlier in the administration and focused on mandatory specialty models that require downside risk.

The Advancing Chronic Care with Effective Scalable Solutions (ACCESS) model, which launched July 5, pays technology-focused participants for digital services aimed at metabolic, musculoskeletal and behavioral health conditions. Hynes said its directory may have launched a few months late. She asked practices whose physicians refer patients to ACCESS participants to share their experience.

The LEAD model, a 10-year successor to ACO REACH with partial- and full-risk options, starts in January 2027. Many members are weighing whether to move into LEAD or reevaluate the MSSP, Hynes said, and MGMA has hosted a webinar with CMS on the model.

The mandatory Ambulatory Specialty Model starts in January 2027 for select specialists treating heart failure or low back pain, and CMS released the final participant list in September. The proposed fee schedule would add participation exceptions, adjust reporting requirements and add a rural scoring adjustment. Hynes said MGMA has seen problems with how the model is being implemented and communicated to affected practices, and she asked attendees in the model to contact her.

MGMA wants a long-term extension of the advanced APM incentive payment and the freeze on qualifying thresholds. It also wants optional, physician-led models that offer partial-risk options for groups new to APMs.

Prior authorization

Since January, Medicare Advantage (MA) and Medicaid plans have had to decide standard prior authorization requests within seven days and expedited requests within 72 hours.

They must also give a specific reason when they deny a request, under a CMS rule, CMS-0057, that also requires plans to support electronic prior authorization by Jan. 1. Some insurers have raised concerns about meeting that deadline, Hynes said, and MGMA is pushing back against any delay.

Plans began publicly reporting prior authorization metrics earlier this year, but MGMA wants CMS to collect and publish the data rather than leave it scattered across payer websites. Dozens of health plans pledged last year to reduce prior authorization, including in commercial coverage. Member feedback to MGMA is that the commitments aren't being carried out.

Since January, technology companies have used AI to review prior authorization requests for select traditional Medicare services in Arizona, New Jersey, Ohio, Oklahoma, Texas and Washington under the Innovation Center's Wasteful and Inappropriate Service Reduction model, known as WISeR. MGMA opposes the model and is pushing to limit problems with its rollout.

Medicaid work requirements

States must implement Medicaid work requirements by Jan. 1, 2027. CMS has set out how states must implement them, Hynes said, but much will depend on each state's approach, which could include reviewing coding for medical frailty exemptions. Communication from state Medicaid agencies has varied, she said, and MGMA wants to hear how rollouts are going in each state.

MGMA's slides advised groups to track their state's rollout and prepare for higher uncompensated care and lower Medicaid reimbursement. Hynes said the requirements will add administrative burden for practices as well.

Caps on state-directed payments at Medicare rates phase in beginning in 2028. Limits on provider taxes will also reduce federal matching funds for Medicaid expansion states.

"If you're feeling cuts right now, it's probably not necessarily reflective of federal policies," Hynes said. "These changes are all in the future."

States are making cuts now, she said, and more could follow as they receive less federal money.

MA and downcoding

In MGMA's 2026 regulatory burden report, 90% of responding practices said they had seen a shift toward MA among their patients, and 79% of those said the shift has had a negative effect on their practice. MA now covers more than 55% of Medicare beneficiaries.

Automatic downcoding has been the fastest-growing complaint MGMA hears from members, Hynes said. The association drafted legislation that would ban it outright in MA. A fallback version would allow automatic downcoding only when an insurer can prove a provider has upcoded above a specified rate.

The insurer would have to notify the practice, and the downcoding period would be capped at 90 days before the practice returns to standard review.

Many practices don't know they have been placed under a downcoding policy, Hynes said. The plan policies she reviews often say they target bad actors shown to have upcoded, she said, without explaining how that is determined.

"We would love just for all automatic downcoding to be prohibited across Medicare Advantage," Hynes said. She said MGMA expects "quite a big pushback on the Hill from the big insurers."

MGMA also supports the Medicare Advantage Improvement Act and the Prompt and Fair Pay Act. Between them, they would set a floor for MA payment at traditional Medicare rates and impose deadlines for paying claims, Hynes said.

Outpatient and other rules

The 2027 hospital outpatient payment proposal would extend site-neutral payment to imaging services without contrast furnished in off-campus hospital outpatient departments. It would add reporting requirements for off-campus provider-based departments, including department-specific NPIs and attestations required by a recent law.

The outpatient rule would also remove 637 more procedures from the inpatient-only list and cut payment for 340B-acquired drugs to average sales price minus 33.4%.

The Department of Health and Human Services (HHS) finalized standards for electronic health care claims attachments and electronic signatures this spring under the Health Insurance Portability and Accountability Act (HIPAA). Covered entities, including practices, have until May 2028 to comply. Haynes said the standards should improve how attachments move with claims.

A final rule on the No Surprises Act's independent dispute resolution (IDR) process cut the administrative fee to $15 per party per dispute, from $115. MGMA is backing legislation to make sure practices are paid promptly after an IDR decision. Since July 8, practices that receive federal funds have had to keep at least one accessible exam table and one accessible weight scale under Section 504 of the Rehabilitation Act.

Congress and the Dec. 11 deadline

Federal funding expires Dec. 11, about five weeks after the Nov. 3 midterm elections. The elections could bring leadership changes in the House and Senate and an unpredictable lame-duck session. Year-end spending packages have become MGMA's main opportunity to move health care bills, Hynes said.

Late last year's shutdown, the longest in U.S. history, turned largely on the Patient Protection and Affordable Care Act's enhanced premium subsidies, which expired at the start of 2026, Haynes said.

The appropriations bill Congress passed in February extended Medicare telehealth flexibilities through Dec. 31, 2027. MGMA wants them made permanent through the CONNECT for Health Act.

Three of that bill's Medicare provisions expire in December:

• the 1.0 work geographic practice cost index floor
• the advanced APM incentive payment and lower qualifying thresholds for 2026
• a delay of cuts to the clinical laboratory fee schedule

CMS recently released preliminary 2027 lab rates. Without congressional action, cuts averaging about 16% would phase in over three years, Haynes said.

MGMA wants a year-end package to address Medicare payment, extend the expiring provisions and carry the Improving Seniors' Timely Access to Care Act. That prior authorization bill has 290 House cosponsors and, Hynes said, little to no cost. MGMA also backs the Reducing Medically Unnecessary Delays in Care Act.

The broadest bill MGMA supports is the Patients First Act, which would tie physician payment updates to inflation, revise budget neutrality rules, redesign MIPS and freeze APM thresholds. MGMA's slides also listed three narrower bills:

• the Strengthening Medicare for Patients and Providers Act, on inflation updates
• the Provider Reimbursement Stability Act, on budget neutrality
• the Medicare Physician Data-driven Performance Payment System Act, on MIPS

"I think the challenge with something like the Patients First Act is it's going to be very expensive," Hynes said.

MGMA takes its regulatory burden report to congressional offices. Hynes said a detail such as a practice hiring four more back-office staff members in a year to handle prior authorization "does stick" there. Grassroots letters help MGMA tell offices that an issue is "a real problem in your district," Haynes said.

MGMA is recruiting members for ad hoc workgroups on billing and payment, MIPS and MVPs, value-based care, MA and health IT, and for a policy advisory network. It scheduled a member town hall for Sept. 29.

Enforcement, privacy and AI

CMS has imposed nationwide moratoriums on Medicare enrollment of new durable medical equipment suppliers, hospices and home health agencies. It has also asked states to revalidate Medicaid providers. Hynes said the MGMA team had heard that morning about Medicaid revalidation affecting some practices.

The agency is also scrutinizing the rising cost of skin substitutes, has requested information on ways to fight fraud and has proposed changes to Medicare enrollment. Hynes said fraud prevention will likely be woven into many CMS policies in the coming years.

MGMA opposed a proposed update to the HIPAA Security Rule, which has stalled, and continues to press the administration on what it would cost practices, Hynes said. MGMA is also watching possible HIPAA privacy rule changes and electronic prior authorization for drugs.

Asked about federal guidance on AI, Hynes said little has come from CMS or HHS, and there are few guardrails. "Right now that is kind of the big black box of policy in D.C.," she said.

Physicians Practice is in San Antonio at the MGMA Annual Conference, Sept 27-30, celebrating 100 years of MGMA, attending sessions and speaking with industry leaders. Follow our coverage on our MGMA conference page.