CMS Capped the Cut and Published the Destination

At 91 FR 43851 the CY2027 physician fee schedule adds a nineteenth step to the practice expense methodology. Every PE RVU gets compared to last year's and held to a 5 percent move, up or down.

CMS is direct about why it needs one. The actual policy in this rule is pulling the indirect practice cost index out of the PE calculation entirely, and the agency expects that to be violent enough that it wrote itself a governor first.

So the specialty impact table everyone read in July is showing a throttled year.

"If the cap is holding the number down, what is the number underneath?"

CMS answered that in a file almost nobody opened.

What Step 19 Is Holding Back

The IPCI is the 2007-vintage survey artifact that scales indirect PE by specialty. CMS proposes to delete steps 12 through 17 that depend on it, over a two-year transition: in CY2027 only half the measured IPCI variation reaches the indirect allocator, and in CY2028 none of it does.

Step 19 then sits on top of that and caps the annual movement at 5 percent. It runs before the statutory phase-in under 1848(c)(7), which separately limits any established code to a 19 percent total-RVU drop in one year, and CMS notes a code can be caught by both.

The cap skips new codes, revised codes, newly nationally priced codes, and anything revalued this cycle.

Read the regulatory impact analysis and CMS says the quiet part in its own voice: the big specialty decreases trace to the modifier -25 proposal and the IPCI removal, "although the effects on PE are mitigated by the proposed PE stabilization adjustment."

Mitigated is the operative word. The rest of the move is still coming.