The Centers for Medicare and Medicaid Services (CMS) issued a massive, proposed rule on July 14 covering everything from value-based care to physician payment. Tucked in the proposal is a big win for residents in skilled nursing care and the physicians who care for them as CMS seeks to equalize payment for nursing facility visits regardless of a patient’s Part A status.

At issue was a well-intentioned change last year when Medicare gave doctors visiting Part B (long stay) SNF patients a 4 percent payment increase. At the same time, Medicare cut payments 7 percent for doctor visits to short-stay SNF residents (Part A). In the new proposed rule, CMS said the payments would be the same and at the higher rate.

“We appreciate CMS recognizing the challenges that SNFs face in recruiting and retaining physicians and nurse practitioners. This change is a win for all beneficiaries, especially those in rural areas,” according to Mark D. Miller, Ph.D. nurse practitioner and clinician for Comprehensive Rehab Consultants (CRC), a national physician-owned medical group providing physical and mental healthcare for patients.

“And it does so the right way, by leveling payment up to fair value rather than dragging it down,” Miller said. "CMS heard the frontline and acted. That is leadership, and on behalf of the patients we serve, we're grateful for it."

Digging Inside the Rule

In the proposed rule, roughly from pages 49-53, the logic in making the change is presented by CMS as follows, in part:

“We proposed a significant refinement to our PE [Practice Expense] methodology to better reflect trends in physician practice settings in the CY 2026 PFS final rule (90 FR 49292 through 49297). Under the finalized policy, we allocate half the amount of indirect PE RVUs per work RVU for services furnished in the facility setting compared to those allocated to services furnished in the non-facility setting.

We noted in the CY 2026 PFS proposed rule (90 FR 32374) that this change to the indirect cost allocation methodology was intended to better recognize the relative resources involved in furnishing services paid under the PFS in facility and non-facility settings. We compared this change to our current methodology prior to CY 2026, which functionally presumed approximately equal indirect costs incurred by physicians across sites of service.

This presumption was initially made in the context of most practitioners maintaining office practices independent of the facilities in which they provided care, and as we discussed in the CY 2026 PFS proposed and final rules, appears to be inconsistent with contemporary trends in physician practice where some significant portion of services furnished in facility settings are performed by medical practitioners who do not maintain fully independent practices and are less likely to incur a comparable amount of indirect costs.

Since finalizing the proposal in the CY 2026 PFS final rule, we have heard from interested parties that the implementation of this policy resulted in an unintended, but significant, site of service differential for physician visits in nursing facility settings based solely on whether the beneficiary’s stay is covered under Part A.”

The proposed rule is more than 1,600 pages and is titled: “Medicare and Medicaid Programs; CY 2027 Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program.”

More Work to Be Done

CRC’s Miller noted there is more work ahead. “The broader questions about how we value care across settings, without penalizing the clinicians who serve where care is hardest to deliver, remain open,” he said. “They deserve the same careful attention, and I would encourage CMS to keep guarding against changes that quietly undermine the independent clinicians who keep access alive in communities larger systems overlook.”

But today, Miller said, give credit where it is due.

“This fix restores a basic principle: pay for the care, not the paperwork. It protects the patients least able to advocate for themselves. And it shows that when clinicians raise their hands and policymakers listen, the government can correct course.”

Links and More Information

The physician payment correction by CMS is part of the larger proposed rule that CMS calls a “transformational” set of reforms to Medicare’s physician payment and value-based care programs that would expand accountable care, modernize physician payment, reduce administrative burden, and help shift the healthcare system’s focus from treating illness to preventing it.

“The proposals would make Medicare ACOs easier to join and more rewarding to participate in, transition clinicians away from traditional Merit-based Incentive Payment System (MIPS) reporting toward more meaningful value-based care pathways, and update physician payment policies to better reflect modern clinical practice. Together, these reforms would strengthen primary care, improve patient outcomes, and support Medicare’s long-term sustainability,” CMS said.

To view the proposed rule, please visit: https://www.federalregister.gov/public-inspection/current

To view the related Quality Payment Program fact sheet, please visit: https://d2g5m5leph8kam.cloudfront.net/s3fs/s3fs-public/2026-06/2027-qpp-proposed-rule-factsheet.pdf

For a fact sheet on the CY 2027 Physician Fee Schedule proposed rule, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule

For a fact sheet on the proposed Medicare Shared Savings Program changes in the CY 2027 PFS proposed rule, please visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2027-medicare-physician-fee-schedule-proposed-rule-cms-1848-p-medicare-shared

Questions or comments on this article? Contact Patrick Connole at pconnole@parkplacelive.com.