CMS Proposes Major Medicare Payment Policies

What this means for you: If finalized, the PFS rule would decrease Medicare physician payment for CY 2027; however, payment rate changes vary by service. AUGS will provide more information to members through the Coding Committee and will consider submitting comments to CMS on the impact of the proposals to urogynecologists.

CMS proposes to decrease the conversion factor (CF) for 2027. The proposed CY 2027 physician CFs are $33.1693 for clinicians who are qualifying participants (QPs) in advanced alternative payment models (APMs), and $32.8409 for other clinicians-a decrease of 1.19% and 1.68%, respectively, from the 2026 CF. Congress can intervene to provide a statutory increase to the CF for 2027, as has been previously done in some years. However, it is unclear whether lawmakers could reach an agreement to do so, particularly during a mid-term election year.

Following the release of this proposed rule, bipartisan lawmakers introduced a bill to remove the CF from the Medicare PFS and replace it with a formula linked to the Medicare Economic Index to tie physician payments to inflation, as the CF does not include inflationary updates. Similar proposals have been floated by lawmakers, stakeholders, and the Medicare Payment Advisory Commission, but it remains to be seen if the legislation will advance this Congress.

The policies in the proposed rule would impact each urogynecology service code differently. However, most codes of interest would see a 4% decrease in the non-facility setting and a 3% decrease in the facility setting, if the rule is finalized. The rule also proposes changes to indirect practice expense reallocations, practice expense methodology, and global survey payments and seeks information on quality reporting and alternatives to current procedure terminology (CPT) codes. The rule also outlines significant quality reporting changes, proposing to sunset the current Merit-based Incentive Payment System by 2029, with clinicians moving to value-based models or the MIPS Value Pathway (MVP) reporting option. Our consultants at McDermott+ will publish key takeaways on the proposed rule here in the coming days.

In related news, CMS issued the proposed OPPS rule for 2027, which would have payment implications for hospitals and outpatient settings, if finalized. It includes proposals related to the 340B drug program, OPPS payment rates, and changes to site of care policy. Read more on the proposed rule from McDermott+ here.

OMB Seeks Comment on Changes to Federal Grantmaking

What this means for you: If finalized, the changes would drastically change federal grant review processes and have implications for researchers, universities, nonprofits, and other groups receiving federal funding, such as from the NIH.

OMB has proposed sweeping changes to the Uniform Guidance, which is a framework that federal agencies follow when reviewing and issuing grants. The proposed rule would turn the guidance into federal regulation, making it more challenging for future administrations to undo the policies. It also implements many policies spelled out in previous executive orders from President Trump. Proposals in the rule include:

Providing federal agencies with discretionary termination rights if a federal award does not align with agency goals.
Requiring political appointees to review awards to confirm awards advance the President's priorities.
Directing federal agencies to prioritize awards to institutions with lower indirect cost rates.
Prohibiting federal award funding from going towards efforts that promote or encourage diversity, equity, and inclusion and gender ideology.

Read more on the proposed rule here. The proposed rule has been met with backlash from the research community, and about 500,000 public comments have been submitted, much higher than the usual number of comments received on regulations. Senator Susan Collins (R-ME) also sent a letter to OMB asking that the comment period be extended by an additional 45 days to the more typical comment period length of 90 days. Senator Collins stated that the proposed rule could burden recipients and subrecipients by allowing mid-award terminations with limited appeal rights, creating uncertainty particularly for multi-year scientific and biomedical research.

As part of the Women First Research Coalition (WFRC), AUGS submitted comments requesting that OMB withdraw the proposed rule due to concerns that it will weaken NIH peer review, increase uncertainty regarding grant funding, restrict scientific communication, and allow for the termination of research projects for non-scientific reasons. OMB aims to finalize the rule by October 2026 to impact new awards and amendments in fiscal year 2027, and it is unlikely that the agency will modify its proposals.

Congress Begins FY 2027 Appropriations Work

What this means for you: As this process gears up, AUGS continues to advocate for increased NIH funding and investments in women's health research across the lifespan.

Following the release of President Trump's annual budget request, congressional committees began their work on FY 2027 appropriations bills. President Trump requests that Congress provide $41.2 billion for the NIH in FY 2027, a decrease from the $47.2 billion that Congress provided in FY 2026. The budget request is a nonbinding outline of the administration's funding goals for the coming year, and Congress can choose to adopt or reject the proposals. In early June, the House Appropriations Committee advanced its HHS funding bill along party lines. The bill includes NIH funding and would provide $48.8 billion for NIH in FY 2027.

In the Senate, where the annual appropriations process has traditionally been more bipartisan, the process has stalled. Republicans and Democrats have not yet reached an agreement on topline numbers for defense and non-defense spending, resulting in the delay of plans to advance appropriations bills through the Senate. The House and Senate will also need to agree on funding packages by the end of the FY, September 30, 2026. If they can't reach an agreement by then, which rarely occurs, Congress can pass a continuing resolution to keep the government open while debate on FY 2027 bills continues.

In related news, NIH leaders, including Director Bhattacharya, testified at a hearing before the Senate Appropriations Committee. Democrats pressed the NIH leaders on terminated research contracts and the potential loss of critical research capacity. Democrats and Senate Appropriations Chair Collins (R-ME) raised concerns about capping indirect costs, while other Republicans highlighted specific NIH-supported research initiatives such as rural clinical trials.

ORWH Hosts Biannual Advisory Committee Meeting

What this means for you: Consider listening to some of the event to see how NIH leaders are describing their work on women's health issues. Registration information will be available here soon.

The Office of Research on Women's Health (ORWH) Advisory Committee on Research on Women's Health (ACRWH) will hold its second meeting of the year on October 20. ACRWH advises and makes recommendations to ORWH on priority issues affecting women's health and sex differences research. The October meeting will include presentations from NIH leaders and a scientific panel on innovations in chronic disease.

Health Policy and Payment Update

Key takeaways: