The CY 2027 Physician Fee Schedule Final Rule

Statement of grievances

This is regulatory overreach.

We, the undersigned physicians, practitioners and patients, therefore petition Congress and CMS, and charge that:

1. 1

   Paying less while CMS's own index says costs are rising

   CMS finalized a 2.31% conversion factor cut in the same rule in which it set its own Medicare Economic Index, its measure of physician practice-cost inflation, at +2.6%. An agency must examine the relevant data and give a reasoned explanation that connects the facts it found to the choice it made. Cutting payment in the face of its own finding of rising costs does not meet that standard.

   91 FR 70992; Motor Vehicle Mfrs. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 U.S. 29, 43 (1983).

2. 2

   A cut to physicians' work that measures no physician's work

   Federal law defines a physician's work as the resources that reflect "physician time and intensity in furnishing the service," including the work done before and after the patient encounter. In its CY 2026 rule CMS stopped measuring that work and instead applied an across-the-board "efficiency adjustment" to non-time-based services, a productivity factor borrowed from the economy-wide Medicare Economic Index, which it will reapply every 3 years. The American Medical Association warned that it would cut payment for more than 7,000 physician services, 95 percent of all services physicians provide. Assuming every procedure gets faster every year is not a measurement of any physician's time or intensity.

   42 U.S.C. 1395w-4(c)(1)(A) (definition of physician work); CY 2026 PFS final rule, CMS-1832-F, 90 FR 49266, 49334-49345; 91 FR 70992 (retained for 2027); American Medical Association, comments on the CY 2026 Medicare Physician Fee Schedule (2025).

3. 3

   A cut that distorts the resource costs Congress told CMS to reflect

   Congress built the fee schedule on relative values reflecting the resources used to furnish each service. CMS itself acknowledged that more recent data would have produced a 3.6% adjustment and chose 2.5% as "conservative", which confirms the figure is a policy choice, not a measurement of physician resources.

   42 U.S.C. 1395w-4(c); 91 FR 70992.

4. 4

   No inflation update, only expiring patches

   The statutory update for most physicians is +0.25%, against +2.6% practice-cost inflation, and the one-year 2.5% relief for 2026 simply expires. Adjusted for practice-cost inflation, Medicare physician payment has fallen about 33% since 2001. No hospital, skilled nursing facility or other major Medicare provider is asked to absorb that.

   91 FR 70992; AMA, Medicare updates compared to inflation.

5. 5

   Small and rural practices carry the cumulative damage

   Most physician practices are small entities. Participating physicians accept Medicare's fee as payment in full, and many commercial and Medicare Advantage contracts are pegged to the fee schedule, so each cut spreads across the whole practice. We call on CMS to publish the cumulative, multi-year impact of these cuts on small and rural practices and on beneficiary access.

   Regulatory Flexibility Act, 5 U.S.C. 601 et seq.; 91 FR 70992.

Federal law bars any administrative or judicial review of the conversion factor and of relative value determinations (42 U.S.C. 1395w-4(i)(1)). No court can undo this cut. Only Congress can, and it must act now.

These are the petitioners' contentions in support of a petition to Congress and CMS. They are not a court filing or legal advice.