The national debt has just surpassed $40 trillion, and Medicare — a taxpayer-funded federal health insurance program primarily for seniors — is a big part of the problem. Annual Medicare spending is now more than $1.1 trillion, and absent reform, it’ll only get worse for taxpayers. As the Washington Post editorial board recently noted, “Of the projected $138 trillion budget shortfall over the next 30 years, $109 trillion is from Medicare. Rising health care costs, combined with an aging population receiving far more in benefits than it ever paid in taxes, spells fiscal Armageddon.” It’s little wonder that the Medicare Hospital Insurance trust fund is projected to become insolvent in 2033.
The good news is that commonsense reforms can go a long way toward fixing Medicare’s spending mess. In its calendar year (CY) 2027 Medicare Physician Fee Schedule (PFS) proposed rule, the Centers for Medicare and Medicaid Services (CMS) has proposed fixing the well-documented problem of providers getting paid multiple times for the same patient visit. The agency can and must do right by taxpayers and end this costly policy.
Under current Medicare rules, the program frequently pays twice for single patient encounters due to overlapping reimbursements for combined clinical services. When a patient receives an evaluation and management (E/M) office visit alongside a procedure with a global surgical period during the same appointment — such as examining a health condition and performing a minor outpatient procedure — providers can bill both services at near-full rates. Although combining these services into a single visit yields significant operational efficiencies for practitioners and added convenience for patients, the current payment structure fails to reflect those shared overhead and labor savings. Consequently, Medicare claims data shows that the program routinely provides duplicate compensation for overlapping clinical work and practice expenses.
To correct this systematic overpayment, CMS proposed a targeted payment adjustment in the CY 2027 PFS proposed rule. Under the proposed policy, when an office visit and a procedure subject to a global period are billed for the same patient encounter, Medicare would reimburse the highest-valued service at 100% of its fee schedule rate while discounting all additional services billed that day to 50%. CMS previously floated a similar policy in the CY 2019 PFS proposed rule but unfortunately opted not to finalize it at the time. Revisiting the issue for CY 2027, the agency explicitly noted that existing billing practices likely duplicate payments across simultaneous services.
In addition to same-day visit discounting, the proposed rule addresses an unbundled cost inefficiency within Medicare’s global surgical packages. When Medicare reimburses a surgical procedure, the bundled rate is designed to cover both the operation and a designated number of pre- and postoperative follow-up visits. However, CMS’s ongoing analysis of claims data reveals that beneficiaries frequently do not receive the full complement of postsurgical checkups built into these bundled packages. Because practitioners receive the full bundled fee regardless of whether every postoperative appointment takes place, Medicare routinely pays for follow-up care that is never actually rendered. To lay the groundwork for reforming this gap, CMS is pausing an outdated data-collection rule and publishing its empirical findings to better align surgical package rates with care actually delivered to patients.
Addressing these billing mechanisms is critical for safeguarding program integrity and curbing high and rising taxpayer costs. Further, because Medicare cost-sharing requirements are directly tied to approved payment rates, inflated billing benchmarks artificially drive up coinsurance for patients. By aligning reimbursement with the actual resources used during single encounters and reevaluating payments for unrendered postoperative visits, CMS aims to ensure that both taxpayers and beneficiaries pay strictly for care that is delivered efficiently and in full. Rooted in multiyear claims analysis, these proposals reflect an evidence-based effort to eliminate structural waste across Medicare Part B.
It’s time for a new approach to Medicare that protects taxpayers and patients. Hopefully, CMS follows through and ensures that program payments reflect care delivered to beneficiaries.
Ross Marchand | INSIDE SOURCES