Proposed Medicare Rate Cuts Draw AASM Opposition Ahead of Final Rule

Proposed 2027 Medicare conversion factors would fall by 1.19% to 1.68%, and the American Academy of Sleep Medicine (AASM) is opposing the reductions in comments submitted to the CMS on the 2027 Medicare Physician Fee Schedule (PFS) proposed rule.^1,2 AASM expects CMS to publish a final rule in late October or early November.³

In its letter, the academy urged CMS not to finalize the reduction and to keep working with Congress on meaningful physician payment reform.² According to AASM, additional cuts may impair access to sleep services, particularly in rural and underserved areas. The academy said the proposed conversion factors highlight "how unsustainable the current physician payment system has become."

How Much Would Medicare's 2027 Conversion Factor Fall?

CMS published the 2027 PFS proposed rule on July 16, with changes that would take effect January 1, 2027, if finalized.^1,3 The agency multiplies relative value units by a conversion factor to set payment rates.¹ Although the rule includes statutory annual payment updates, the factor would fall 1.19% to $33.17 for qualifying alternative payment model participants and 1.68% to $32.84 for other physicians and practitioners.^1,2 AASM tied the decreases to the expiration of a temporary 2.5% increase for 2026.² Comments were due September 14.¹

The academy supported making the electronic prior authorization measure optional and unscored for 2027 but warned that, starting in 2028, clinicians unable to attest to it could receive a zero score for the entire Promoting Interoperability category.² On the shift away from traditional Merit-based Incentive Payment System (MIPS) reporting, it called for a measured approach, saying clinicians need mature MIPS Value Pathways first.

Proposed Payment for New Unattended Sleep Testing Codes

A new family of unattended sleep testing Current Procedural Terminology (CPT) codes take effect in 2027.¹ CMS proposed the practice expense inputs recommended by the American Medical Association/Specialty Society Relative Value Scale Update Committee (RUC) for the 3 technical codes but asked for comment on the clinical staff times and the 16-hour equipment time. The academy pressed CMS to finalize both as recommended.²

CMS also accepted the RUC work values for 2 of the 3 interpretation codes but proposed cutting the work relative value units for the high-complexity code from 1.60 to 1.42, saying the higher value implied an intensity nearly double that of the other two.¹ AASM is pressing CMS to finalize 1.60, arguing that the ophthalmology service CMS used as a crosswalk does not reflect the work of interpreting a high-complexity study.²

In an August 12 letter on the CY 2027 Hospital Outpatient Prospective Payment System (OPPS) proposed rule, AASM called on CMS to reconsider assigning the moderate-complexity code (95X19) and the high-complexity code (95X20) to the same Ambulatory Payment Classification (APC).⁴ High-complexity studies generally require more sophisticated equipment, sensors, and software, the academy said, and a shared APC built mainly on historical claims risks assuming the 2 cost the same before hospitals report costs under the new codes.

AASM Opposes Remote Monitoring and Modifier 25 Changes

On remote monitoring, AASM asked CMS not to finalize proposed remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) valuation changes until it has reliable cost data.² CMS is weighing bundling 17 existing codes into 4 new G-codes.¹ The academy opposed that change, warning it could add administrative burden, create inconsistent coding across payers, and make payment depend on components that may not all be clinically necessary.² The letter also supported converting the G2211 visit complexity add-on to a modifier and asked CMS to keep its payment value equivalent.

AASM also signed 2 coalition letters. A remote monitoring letter signed by 229 organizations as of September 14 urges CMS not to finalize its RPM and RTM proposals, warning of disruption for about 1 million Medicare beneficiaries.⁵ An American Medical Association-led letter urges CMS not to finalize a proposal to pay 50% for all but the highest-valued service when an evaluation and management visit billed with modifier 25 falls on the same day as a procedure with a global period.^1,6

References

1. Centers for Medicare & Medicaid Services, Department of Health and Human Services. 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. Fed Regist. 2026;91(135):43842-44557. Published July 16, 2026. Accessed September 30, 2026. https://www.federalregister.gov/documents/2026/07/16/2026-14327/medicare-and-medicaid-programs-cy-2027-payment-policies-under-the-physician-fee-schedule-and-other
2. American Academy of Sleep Medicine. Letter to: Mehmet Oz, MD, Administrator, Centers for Medicare & Medicaid Services. Re: File code CMS-1848-P. September 14, 2026. Accessed September 30, 2026. https://aasm.org/wp-content/uploads/2026/09/AASM-PFS-Proposed-Rule-Comments-Final.pdf
3. American Academy of Sleep Medicine. Support fair payment of the new unattended sleep testing codes. Published August 27, 2026. Accessed September 30, 2026. https://aasm.org/support-fair-payment-of-the-new-unattended-sleep-testing-codes/
4. American Academy of Sleep Medicine. Letter to: Mehmet Oz, MD, Administrator, Centers for Medicare & Medicaid Services. Re: File code CMS-1850-P. August 12, 2026. Accessed September 30, 2026. https://aasm.org/wp-content/uploads/2026/08/AASM-Response-to-HOPPS-proposed-rule-final.pdf
5. Proposed remote monitoring policy would disrupt patient access to care. Letter to: Mehmet Oz, Administrator, Centers for Medicare & Medicaid Services. Signed by 229 organizations. September 14, 2026. Accessed September 30, 2026. https://aasm.org/wp-content/uploads/2026/09/2027-PFS-Remote-Monitoring-Stakeholder-Sign-On-Letter-September-14.pdf
6. American Medical Association, American Academy of Allergy, Asthma & Immunology, American Academy of Dermatology Association, et al. Letter to: Mehmet C. Oz, MD, MBA, Administrator, Centers for Medicare & Medicaid Services. Re: File code CMS-1848-P; accounting for E/M resource overlap between stand-alone visits and global periods. August 27, 2026. Accessed September 30, 2026. https://aasm.org/wp-content/uploads/2026/09/2026-8-27-AMA-Sign-On-Letter-to-Oz-re-Modifier-25-final.pdf