The Centers for Medicare & Medicaid Services unveiled its proposed 2027 Medicare physician fee schedule on July 14, trimming the conversion factor to roughly $32.84 — a 1.68% drop from 2026 — and radiology societies wasted no time firing back. The Society of Interventional Radiology branded the plan “devastating” and demanded congressional action. Yet the headline hides a twist: by CMS’ own estimates, if the rule is finalized as written, diagnostic radiology, nuclear medicine, interventional radiology and radiation oncology would all come out ahead.
The conversion factor keeps shrinking
The conversion factor is the dollar multiplier applied to each procedure’s relative value units, so any downward move ripples across every service a practice bills. Under the proposal, it slides $0.56 to about $32.84, a 1.68% reduction. Physicians participating in alternative payment models — arrangements that tie revenue to cost and quality performance — would fare slightly better at $33.17, down 1.19%, or $0.40.
The cut is not a fresh austerity decision. It reflects the expiration of a one-time 2.5% pay bump granted under the Working Families Tax Cut Act, which lapses at the end of 2026 and was not renewed. Once that patch falls away, the baseline simply resets lower — a familiar pattern for U.S. physicians, who have absorbed nominal cuts year after year while practice costs climbed.
SIR calls the proposal “devastating”
The Society of Interventional Radiology, representing more than 8,000 members, urged lawmakers to “act immediately to halt this devastating proposal,” arguing that the reductions ignore the rising cost of running a practice — staff, equipment, supplies and compliance overhead all trending upward.
The society is backing House Resolution 6160, the Strengthening Medicare for Patients and Providers Act, introduced in November. The bill would peg annual physician cost-of-living increases to the Medicare Economic Index, the government’s own measure of practice-cost inflation. Physicians remain the only Medicare provider category without an automatic annual raise, a structural gap Congress has been circling for months — we covered the momentum behind that push in our report on the U.S. bill to reform Medicare physician payment. The dispute also lands in a payment-policy landscape still digesting the final No Surprises Act arbitration rule.
The twist: radiology may actually gain
Here is where the story turns. Despite the lower conversion factor, CMS projects positive overall payment impacts if the rule is finalized: +2% for diagnostic radiology, +2% for nuclear medicine, +3% for interventional radiology and +3% for radiation oncology.
Those gains flow from a proposed overhaul of practice-expense methodology, informed by a RAND Corporation report commissioned by CMS. The agency would allocate indirect practice expense using work RVUs plus clinical labor RVUs for all services — a formula that shifts dollars toward equipment- and staff-intensive specialties like imaging.
Imaging lobbyist Kit Crancer, of the Radiology Patient Action Network, called the practice-expense changes “positive” for diagnostic radiology and noted that interventional radiology reimbursement is “up meaningfully.” He also welcomed a subtle but consequential detail: the physician-work efficiency adjustment — a discount tied to productivity gains attributed to AI and technology — is not applied to the technical component of imaging services. For imaging groups making the case that artificial intelligence should not automatically translate into lower payment, that carve-out matters.
MIPS sunset and a crackdown on duplicate imaging
Buried in the 1,592-page rule are two structural moves. First, CMS proposes to sunset traditional MIPS reporting in 2029, transitioning clinicians to MIPS Value Pathways — leaner, specialty-specific measure sets meant to replace the sprawling legacy program.
Second, the agency issued a request for information on duplicate imaging exams and interoperability. CMS acknowledges that imaging results trapped in institutional silos drive repeat exams, care delays and unnecessary radiation exposure. The concern dovetails with growing evidence that clinical context changes ordering behavior — a dynamic explored in our coverage of how clinical knowledge reduces low-value imaging.
What it signals for imaging economics
For imaging leaders, the 2027 proposal is a reminder that the conversion factor is only half the equation. Methodology changes buried deep in practice-expense formulas can quietly redistribute revenue across specialties, and capital-intensive fields like radiology sit at the sharp end of those recalculations. The rule also telegraphs where U.S. reimbursement policy is heading: value pathways over box-checking quality reports, scrutiny of wasteful duplicate exams, and a live debate over whether AI-driven efficiency should be captured by payers or retained by practices. Health systems outside the United States watch these signals closely, since Medicare methodology often shapes private-payer logic worldwide.
What happens next
The proposed rule is open for public comment. A final version is expected in late October or early November, taking effect January 1, 2027. The American College of Radiology has already issued a preliminary summary, and specialty societies are expected to spend the comment window pressing both CMS and Congress — with HR 6160 as the legislative vehicle of choice.
Source: Radiology Business