2026 KPIs, Medicare Payment Changes, Prior Authorization Rules, and Operating Targets for Surgical Practices
Revenue Cycle Management • Revele • Keith Lage • Published August 2026 • Last reviewed August 14, 2026
Source methodology: Regulatory and payment-policy claims in this article were reviewed against applicable CMS final and proposed rules, official CMS program documentation, and other primary or authoritative sources identified in the source note. Proposed policies are identified as proposed and should not be treated as final requirements.
A 2026 benchmarking and regulatory guide for practice administrators, physician-owners, revenue cycle directors, and financial leaders of general surgery, colorectal, surgical oncology, vascular, thoracic, cardiac, trauma and acute care surgery, and neurosurgery groups.
Surgery RCM benchmarks include the revenue-cycle KPIs surgical practices use to evaluate collections, claims performance, denials, and cash flow. Core measures include net collection rate, revenue realization rate, days in accounts receivable, billed A/R over 90 days, clean claim rate, first pass resolution rate, and denial rate. For surgical practices, these measures should be interpreted in the context of higher-value procedures, prior authorization, facility-based care, and Medicare global periods.
Four federal changes materially affect surgical RCM in 2026: a 2.5% efficiency adjustment to work RVUs and corresponding intraservice physician time for many non-time-based services; a reduction of the work-RVU-based component of indirect practice expense for facility-setting services to 50% of the corresponding non-facility allocation; the first year of a three-year Inpatient Only list phase-out, beginning with 285 mostly musculoskeletal procedures; and standardized prior authorization decision timeframes for non-drug items and services—72 hours for expedited requests and 7 calendar days for standard requests—for specified CMS-regulated payers beginning January 1, 2026.
Medicare conversion factors: $33.5675 for Qualifying APM Participants and $33.4009 for non-QPs in CY 2026. CMS has proposed approximately $33.17 and $32.84, respectively, for CY 2027.
Major proposed 2027 risk: CMS has proposed paying the highest-valued applicable same-day surgical procedure or separately identifiable office/outpatient E/M visit at 100% and other applicable same-day surgical procedures or E/M visits at 50% when the policy applies. Comments are due September 14, 2026.
Specialties analyzed: general surgery, colorectal surgery, surgical oncology, vascular surgery, thoracic surgery, cardiac surgery, trauma and acute care surgery, and neurosurgery.
Benchmark methodology: Unless a published external benchmark, population, data year, and methodology are specifically identified, numerical KPI targets in this article are Revele-recommended operating targets rather than national or percentile benchmarks. Practices should validate them against their own payer mix, specialty, locality, case mix, contracts, and historical performance.
The seven developments surgical financial leaders must understand:
1. The efficiency adjustment is a targeted cut, not a broad one. CMS applied –2.5% to work RVUs and intraservice time for nearly all non-time-based services — surgical procedures, imaging interpretation, and outpatient interventions — while explicitly excluding E/M, behavioral health, care management, and maternity global codes. CMS has stated it intends to reapply the adjustment roughly every three years. CMS has indicated that it intends to reapply the methodology approximately every three years, so practices should treat it as a recurring methodology rather than assume the 2026 adjustment is necessarily a one-time event.
2. Both conversion factors rose, and most of the increase expires December 31, 2026. CY 2026 introduced two Medicare Physician Fee Schedule conversion factors for the first time: $33.5675 for Qualifying APM Participants and $33.4009 for physicians and practitioners who are not Qualifying APM Participants. A one-year statutory 2.5% update under P.L. 119-21 drove most of that. CMS’s proposed July 2026 rule would set CY 2027 at approximately $33.17 and $32.84 — decreases of 1.19% and 1.68%.
3. The work-RVU-based component of indirect practice expense was reduced for facility-setting services, without a phase-in. CMS reduced the work-RVU-based component of indirect practice expense allocation for facility-setting services to 50% of the corresponding non-facility amount. Unlike prior significant PE methodology changes, CMS declined to phase it in over four years. The policy is budget neutral overall and sharply redistributive by site of service.
4. The CY 2027 proposal would apply a 100%/50% payment hierarchy to certain same-day E/M/procedure combinations. Under the CY 2027 proposal, when a separately identifiable office/outpatient E/M visit is furnished for the same patient by the same physician, or a physician in the same group practice, on the same day as a procedure with a 0-, 10-, or 90-day global period, the most expensive service—either a surgical procedure or the E/M visit—would be paid at 100%, while all other applicable surgical procedures or E/M visits furnished that day would be paid at 50%. Comments are due September 14, 2026. For surgical practices with frequent same-day E/M/procedure combinations, this could be one of the more consequential open CY 2027 payment proposals.
5. CMS has the data to revalue the global package and has said so plainly. CMS’s claims-based analysis found reported post-operative visits equal to roughly 28% of the visits reflected in valuation; because CMS and OIG have identified under-reporting, that figure should not be interpreted as a precise measure of all visits actually furnished. CMS modeled a 99024-based method that would increase the average procedure share used when modifier -54 splits a 90-day global package from about 82% to 91%. The model concerns allocation of the existing global payment when care is transferred; it is not itself a 9-percentage-point increase in total global payment. CMS is separately considering whether global surgical packages should be revalued based on reported post-operative utilization. For CY 2027 CMS proposed pausing the MACRA-required data collection while continuing to signal revaluation through future rulemaking.
6. Site-of-service migration accelerated, increasing exposure to site-of-service mismatch denials. CMS began phasing out the Inpatient Only list in CY 2026, removing 285 mostly musculoskeletal procedures as the first step in a three-year phase-out, with complete elimination scheduled for January 1, 2029. The ASC covered procedures list gained 560 procedures. A potentially high-cost leak is a site-of-service mismatch: an authorization secured for one place of service while the case is performed in another.
7. Prior authorization became more measurable. Effective January 1, 2026, CMS-0057-F requires Medicare Advantage organizations and applicable Medicaid and CHIP programs to issue decisions within 72 hours for expedited requests and seven calendar days for standard requests, with a specific denial reason. Separately, WISeR expanded prior authorization and prepayment medical review for selected Original Medicare Part B items and services in six states through 2031.
Three priorities for the next quarter: (1) model the CY 2027 same-day E/M proposal against your actual claims and submit comments before September 14, 2026; (2) close the site-of-service concordance gap between what was authorized and where the case was performed; and (3) fix 99024 post-operative visit reporting now, because CMS is using these data as part of its ongoing evaluation of global-surgery payment accuracy and potential revaluation strategies.
In This Article
Several federal payment and prior-authorization policies took effect in 2026 and can affect surgical revenue-cycle performance in different ways. The PFS efficiency adjustment reduced work RVUs for many non-time-based services; the indirect practice-expense methodology changed the relative allocation of PFS payment between facility and non-facility services; OPPS/ASC policy expanded the set of procedures eligible for payment in outpatient and ASC settings; and WISeR added prior authorization or prepayment medical review for selected Original Medicare Part B services in six states. The sections below explain how these changes can affect payment, authorization workflow, A/R, and denial risk.
CMS’s CY 2026 Physician Fee Schedule Final Rule (CMS-1832-F) applied a 2.5% reduction to the work RVUs and corresponding intraservice physician time of nearly all non-time-based services — the surgical, interventional, and imaging-interpretation codes that anchor surgical revenue.
The exclusions define the policy. CMS exempted time-based services, evaluation and management visits, behavioral health services, care management, maternity care codes carrying an MMM global indicator, and codes on the Medicare telehealth list. It also exempted new CPT® codes effective January 1, 2026, in response to specialty society comment. What remains inside the adjustment is the procedural core of general surgery, colorectal, surgical oncology, vascular, thoracic, cardiac, trauma, and neurosurgery.
Because the reduction lands on base work RVUs rather than on the conversion factor, it deflates RVU generation itself. That matters well beyond Medicare. Employment agreements, productivity compensation, internal transfer pricing, and any commercial contract written as a percentage of Medicare or referencing current-year RVU values all inherit the compression automatically. A surgeon performing identical volume and identical case complexity generates fewer credited wRVUs in 2026 than in 2025.
Two structural details matter for multi-year modeling. The adjustment derives from a five-year lookback at the productivity component embedded in the Medicare Economic Index, and CMS has indicated it intends to reapply the methodology approximately every three years. This is a recurring compression cycle, not a one-time haircut. The exclusion list — not the 2026 percentage — is the thing worth defending in comment letters.
The compensation trap most surgical groups have not modeled.
If your physician agreements pay on work RVUs and your conversion rate per wRVU is fixed, the efficiency adjustment quietly reduces surgeon compensation for unchanged work — and the practice absorbs none of the benefit, because collections fell too. If your agreements pay on collections, the practice absorbs it directly. Either way the exposure is real, and it should be quantified per surgeon from actual 2025 claims re-priced at 2026 RVUs before the next compensation cycle, not estimated from a specialty-level average.
For CY 2026, CMS reduced the portion of indirect practice-expense RVUs allocated based on work RVUs for services furnished in facility settings to 50% of the amount allocated in the non-facility setting. CMS said the longstanding methodology may no longer reflect contemporary practice, citing growth in physician employment by hospitals and health systems and the potential for overlap between physician indirect practice expenses and facility payment. CMS implemented the change in CY 2026 without a multi-year phase-in, whereas prior direct practice-expense updates involving supplies, equipment, and clinical labor were phased in over four years.
The policy is budget neutral in aggregate but redistributive in practice. AMA analysis of the finalized rule estimated approximately a 7% reduction in physician PFS payment for facility-based services and a 4% increase for non-facility services; actual effects vary materially by code mix, locality, specialty, and site of service. The comparison measures physician PFS payment and excludes a separately payable hospital outpatient facility payment.
For surgical groups with a predominantly facility-based case mix—particularly services furnished in hospital outpatient departments or ASCs—the redistribution is expected to create greater downward PFS payment pressure than for office-based groups. The magnitude depends on the group’s specific procedure mix and the applicable site-of-service payment rates.
For surgical groups with a predominantly facility-based case mix, the change may create greater downward PFS payment pressure than for office-based groups. The magnitude depends on the practice's code mix, site of service, locality, and other PFS payment factors. This does not imply that procedures should move to the office; clinical appropriateness, payer requirements, applicable coverage rules, and facility requirements remain controlling. CMS has also solicited comment for CY 2027 on whether the facility/non-facility differential remains appropriate.
Payers use automated claim edits and other adjudication rules to identify coding, authorization, place-of-service, modifier, and documentation issues. At the same time, CPT 2026 restructured several surgical code families. Industry reports cited in this article place initial denial rates in the low double digits in some settings, but those figures vary by source and should not be treated as a universal benchmark. Operationally, practices should monitor denials by payer, procedure family, modifier, authorization status, and place of service to identify recurring upstream causes.
CMS permanently adopted a definition of direct supervision that allows the supervising practitioner to be immediately available through real-time, two-way audio and video telecommunications, excluding audio-only, for services furnished under 42 CFR 410.26. It then carved out every service carrying a 010 or 090 global surgery indicator.
The exclusion means that Medicare's virtual direct-supervision flexibility is not available for services assigned 010 or 090 global surgery indicators. A 000-global service may qualify for virtual direct supervision only when all other applicable Medicare incident-to requirements and applicable state-law requirements are satisfied. CMS cited the clinical complexity of procedures with post-operative periods and the value of on-site availability in explaining the carve-out and separately solicited comment on whether 000-global procedures should also be excluded.
Map your procedure list by global indicator before you rely on virtual supervision.
The failure mode is quiet. A practice reads the new flexibility as general, a physician supervises virtually while an advanced practice provider performs a procedure with a 10-day or 90-day global period, and the service is billed incident-to at the full physician fee schedule amount. In such a scenario, the direct-supervision requirement is not met. Consequently, the service would not satisfy the regulatory requirements for Medicare incident-to billing, and the incident-to billing would not be supported. The claim could be denied, or, if it were improperly paid, the payment could constitute an overpayment requiring appropriate repayment analysis. The fix is a hard-stop rule in scheduling and charge capture: any 010 or 090 service billed incident-to requires physical, on-site presence of the supervising physician or other practitioner permitted to supervise the service under Medicare rules and applicable state law. Build the rule off the global indicator field, not off a list of procedure names, because the indicator is what CMS is measuring.
A major long-term risk to surgical revenue is potential revaluation of the global surgical package. CMS says its multi-year claims data show reported post-operative utilization during global periods is materially below the visits reflected in current valuation assumptions, although CMS and OIG have also identified significant limitations in postoperative-visit reporting.
The global surgical package bundles pre-operative evaluation, the procedure, and a defined post-operative period — 0, 10, or 90 days — into a single payment. The valuation assumptions behind the post-operative component date back decades. Section 523 of MACRA required CMS to collect data on post-operative visits, reported through CPT 99024, to test those assumptions.
The collected data raised substantial questions about those valuation assumptions. In the CY 2026 rule CMS evaluated methods to rebalance payment between the surgical and post-operative components, noting that Federal audits have also documented substantial reporting problems. In a 2025 OIG audit, postoperative-visit data were inaccurate for 45 of 105 sampled global surgeries, and OIG found that the fees for 91 of 105 did not reflect the number of postoperative visits provided. These findings demonstrate that claims-based postoperative-visit data are an imperfect proxy for the care actually furnished. Because CMS and OIG acknowledge under-reporting, these findings demonstrate important limitations in claims-based reporting and should not be treated as a precise measure of visits actually furnished. Among the methodologies examined, CMS identified the 99024-based approach as a potential method for updating procedure shares. Applied to 2023 90-day global procedures, it would increase the modeled average procedure share used with modifier -54 from roughly 82% to 91%.
Read the 82%-to-91% figure carefully — it cuts both ways.
A reallocation raising the surgeon’s share sounds favorable in isolation. It is not a payment increase. It is a redistribution inside a fixed global payment. CMS is evaluating whether current global-package valuation overstates post-operative work because reported utilization is materially below the visits reflected in existing valuation assumptions. A future data-driven revaluation could reduce payment for some global surgical packages, particularly where the number of post-operative visits reflected in current valuation materially exceeds documented utilization, but CMS has not finalized that outcome and practices that under-report 99024 can make observed post-operative utilization appear lower than the care actually furnished, strengthening the evidentiary record that could support downward revaluation. Accurate 99024 reporting helps ensure that CMS’s evidence base better reflects the post-operative care actually furnished.
For CY 2027, CMS proposed pausing the MACRA-required data collection, stating that several years of reported data show post-operative utilization below the levels reflected in current global-package valuation, while also citing the burden of the reporting requirement. In the same proposal CMS posted a public use file displaying imputed RVUs associated with 10- and 90-day post-operative visits under a purely arithmetic approach and solicited comments on revaluation strategies and on expanding data collection. A pause in the current collection requirement is not necessarily a retreat from revaluation. CMS is continuing to evaluate global-surgery valuation while seeking comments on additional data sources and future collection strategies.
The operational implication for 2026 is straightforward and unglamorous. CMS’s claims-based reporting requirement is narrower than most practices assume: it applies to practices of ten or more practitioners in nine states — Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island — for a specified list of roughly 293 high-volume and high-cost procedure codes. Practices that meet that test should ensure complete and accurate reporting for every affected practitioner and procedure. Everyone else reports voluntarily, and CMS has encouraged it. The CY 2027 proposal to pause the current collection requirement does not end CMS’s evaluation of global-surgery valuation; CMS is simultaneously seeking comment on expanded data collection, alternative data sources, and future revaluation strategies. Practices subject to current reporting requirements should continue to ensure complete and accurate reporting while those requirements remain in effect. Whichever category you fall into, be able to produce on demand the ratio of expected to reported post-operative visits by surgeon and by global period length. Practices subject to mandatory reporting should confirm that their workflows support complete and accurate reporting and should seek qualified coding, compliance, or revenue-cycle assistance when internal resources are insufficient.
CMS has proposed that when a separately identifiable office or outpatient E/M visit is furnished by the same physician—or a physician in the same group practice—on the same day as a 0-, 10-, or 90-day global procedure, the most expensive service would be paid at 100% and all other applicable surgical procedures or E/M visits furnished that day would be paid at 50%.
Released July 14, 2026, the CY 2027 Physician Fee Schedule proposed rule frames this as correcting a duplication. CMS states it continues to believe efficiencies exist when the same physician or group furnishes an E/M service in conjunction with a procedure carrying a global period, and that the current methodology likely pays twice for overlapping work. A similar proposal appeared in the CY 2019 proposed rule and was not finalized.
The practical effect is a multiple-procedure-style reduction across same-day separately identifiable E/M/procedure combinations, including common modifier-25 encounters. The proposal is not limited to improper modifier-25 use; it reduces payment on appropriately coded, correctly documented, separately identifiable services.
How to Model the CY 2027 Same-Day E/M Payment Impact.
Operationally, the proposal would affect payment even when the E/M service and procedure are correctly coded and separately identifiable. Exposure will vary by specialty and practice pattern, including the frequency of same-day office/outpatient E/M visits and procedures with 0-, 10-, or 90-day global periods. Practices can estimate potential impact by modeling applicable historical claims under the proposed 100%/50% payment hierarchy.
Model it before you react to it. Pull twelve months of claims, isolate encounters where an office or outpatient E/M and a 0-, 10-, or 90-day global procedure were billed by the same practice on the same date of service, and re-price the highest-valued applicable surgical procedure or E/M visit at 100% and each other applicable surgical procedure or E/M visit at 50%. That number is your exposure. The resulting amount is a scenario estimate rather than a forecast of final CY 2027 payment because the proposal may change before finalization and actual payment will depend on the practice's code mix, locality, and other applicable PFS rules. Practices submitting comments may use practice-specific modeling to illustrate potential effects.
Comments on the CY 2027 proposed rule are due September 14, 2026. The same rule would set the CY 2027 conversion factors at approximately $33.17 for qualifying APM participants and $32.84 for non-qualifying clinicians — decreases of 1.19% and 1.68% from CY 2026 — driven by the expiration of the one-year 2.5% statutory update, partially offset by statutory updates of 0.75% and 0.25% and a 0.53% budget neutrality adjustment. It also proposes a substantial overhaul of indirect practice expense allocation and solicits comment on whether the facility and non-facility payment differential remains appropriate.
One more CY 2027 proposal belongs in the same model, and it is easy to get backwards. For CY 2027, CMS proposed replacing the G2211 visit-complexity add-on code with a modifier that would increase payment for the associated E/M base code by 16%, with a separate modifier available to practitioners participating in Medicare Shared Savings Program ACOs and Participant Providers in LEAD Model ACOs that would increase payment for the associated E/M visit by 32%. That looks like an offset to the same-day reduction. It is not.
Under current policy, G2211 generally is not payable when the associated office/outpatient E/M base code is reported with modifier 25. CMS permits an exception when the same practitioner furnishes an annual wellness visit, vaccine administration, or another Medicare Part B preventive service on the same day; beginning in 2026, CMS extended that preventive-service exception to eligible home/residence E/M base codes.
That means G2211 generally cannot offset the proposed same-day reduction in modifier-25 procedure encounters. But the CY 2027 same-day proposal is broader than modifier-25 encounters: it applies whenever a separately identifiable office/outpatient E/M visit is furnished on the same day as a 0-, 10-, or 90-day global procedure. For example, an E/M visit representing the decision for major surgery may be reported with modifier 57 rather than modifier 25. G2211 availability in those encounters should be evaluated separately under the applicable G2211 relationship and billing rules. Model G2211 only where it is independently payable under current policy.
Surgeons should also check the underlying eligibility test before assuming much uplift at all: G2211 requires the billing practitioner to be the continuing focal point for the patient’s care or the ongoing principal manager of a single serious or complex condition, which a consulting surgeon frequently is not.
These figures are proposed, not final. Practices should build the preliminary 2027 model from the proposed conversion factors, treat 2026’s 2.5% statutory update as non-recurring, run a downside scenario that assumes the same-day E/M policy is finalized as proposed, and update after the CY 2027 final rule publishes.
The CY 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center final rule (CMS-1834-FC, released November 21, 2025) restructured where surgical cases can be performed. CMS finalized a three-year IPO phase-out beginning in CY 2026 with the removal of 285 mostly musculoskeletal procedures. The original CY 2026 proposal expressly provided for the IPO list to be eliminated in its entirety by January 1, 2029, and CMS’s CY 2027 proposal identifies CY 2027 as the second year of that phase-out. In parallel CMS expanded the ASC Covered Procedures List by revising its criteria, converting five general exclusion criteria into nonbinding physician safety considerations, and adding 560 procedures in total: 289 under the revised criteria and 271 codes concurrently removed from the Inpatient Only list.
| Provision | CY 2026 Implementation | Trajectory |
|---|---|---|
| Inpatient Only list phase-out | 285 mostly musculoskeletal procedures removed (Table 132 of the final rule) | Complete elimination of the IPO list by January 1, 2029 |
| ASC Covered Procedures List | 560 procedures added — 289 under revised criteria plus 271 removed from the IPO list | Five exclusion criteria recast as nonbinding physician safety considerations |
| Two-midnight medical review | Procedures removed from the IPO list are exempt from certain two-midnight medical review activities | Inpatient admission remains payable under Part A when inpatient criteria are met |
| Site-neutral payment expansion for excepted off-campus PBDs | Drug-administration services furnished in excepted off-campus provider-based departments are paid at a PFS-equivalent rate under the expanded volume-control policy. | For CY 2027, CMS has proposed extending the same methodology to imaging-without-contrast services in excepted off-campus PBDs |
The site-of-service mismatch denial.
CMS emphasized that removal from the Inpatient Only list does not determine that a procedure is clinically appropriate only for the outpatient setting; inpatient admission remains payable when applicable criteria are met. As more procedures become payable in multiple settings, practices may face increased operational risk when the authorized place of service differs from the setting ultimately used. Depending on payer policy, a mismatch may result in denial or a requirement to obtain or update authorization. A reasonable control is to verify the authorized and scheduled place of service before the procedure and maintain a documented payer-specific re-authorization process when the setting changes.
Independent and hospital-employed surgical groups should model the combined PFS and OPPS/ASC effect using their own code and site-of-service mix rather than a specialty average. The two rules interact but do not shift payment in identical directions: the OPPS/ASC changes expand the set of procedures payable in outpatient and ASC settings, while the PFS indirect-PE change shifts physician payment relatively toward non-facility office settings and away from facility settings generally, but the professional-claim economics, the facility economics, and the authorization requirements each change on different schedules.
Two unrelated policies made 2026 the year prior authorization became measurable rather than merely burdensome, and surgical specialties can carry substantial exposure because many cases are high-dollar and authorization-intensive.
Effective January 1, 2026, CMS-0057-F requires Medicare Advantage organizations, state Medicaid and CHIP fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities to send prior authorization decisions within 72 hours for expedited requests and 7 calendar days for standard requests. Qualified Health Plan issuers on the federally facilitated exchanges are subject to other provisions of CMS-0057-F but are excluded from these 2026 decision-timeframe requirements. Payers must supply a specific reason for every denial regardless of submission channel — portal, fax, email, mail, or phone. The rule does not apply to prior authorization decisions for drugs. Impacted payers were required to publicly post prior authorization metrics, including approval rates, denial rates, and average decision time, by March 31, 2026. FHIR-based API requirements follow on January 1, 2027.
Public payer metrics create a new comparison point
Because impacted payers must publicly report specified prior-authorization metrics, surgical practices can compare their measured turnaround experience with payer-reported metrics. Those comparisons may help inform operational escalation and payer-contract discussions, although aggregate payer metrics may not reflect a particular practice's procedure mix, submission channel, or patient population. Track request submission time, decision time, payer, procedure family, and outcome before drawing conclusions from the comparison..
The Wasteful and Inappropriate Service Reduction model began January 1, 2026, and runs through December 31, 2031, in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. It applies to Original Medicare, not Medicare Advantage. For a defined list of Part B items and services, providers in those states either submit a prior authorization request to a WISeR model participant or allow the claim to proceed to prepayment medical review. Model participants began accepting requests January 5, 2026, for dates of service on or after January 15, 2026.
WISeR scope also depends on site of service. For services furnished in hospital outpatient departments and ASCs, the model applies to the facility-based encounter or claim rather than the surgeon’s professional claim. Office and home services are handled on professional claims. Surgical groups therefore need a defined handoff with the facility for WISeR cases performed in HOPDs or ASCs.
The selected services include categories with direct surgical relevance — among them cervical fusion, epidural steroid injections, and skin substitute application. The specific items and services subject to WISeR review are identified in Appendix A of the current Operational Guide; Appendix B contains applicable ICD-10 indications, and Appendix C contains associated codes. Because these appendices are updated periodically, practices should use the current guide rather than a static summary. CMS has said the model does not change Medicare coverage or payment policy and that appeal rights are unchanged.
Two operational details carry real dollars. First, each prior authorization request is assigned a MAC-generated unique tracking number (UTN). When a prior authorization request has an affirmation or non-affirmation on file and the service is furnished, the corresponding claim must include the UTN. In an expedited affirmed case, a determination may arrive before the UTN is generated; when a UTN is required, follow current CMS/MAC instructions and ensure that the required UTN is present before claim submission. Claims submitted without a prior authorization decision are instead routed to prepayment medical review and do not require a UTN at initial submission. Missing or incorrectly reported UTNs on claims that are required to carry one can create payment problems. Second, if a primary service is not affirmed, associated items and services that depend on it may also be affected.
The choice not to seek prior authorization is not a way to avoid the process. It routes the claim into prepayment medical review instead, where it pends while the WISeR Participant requests records supporting medical necessity and the applicable service-specific documentation requirements, which may include conservative-care history or, for skin substitutes, the specific area applied.
Prepayment review is initially an A/R event, not a denial event.
Until prepayment review is completed, the claim remains unpaid rather than finally denied. The MAC may ultimately approve or deny payment based on whether Medicare coverage, coding, and payment requirements are met. Operationally, prepayment review first appears as an A/R-aging event, but it can become a denial event. This is the failure mode that may not show up in a denial report for days or weeks. High-dollar surgical claims sit in a pending state, the days-in-A/R metric climbs, billed A/R beyond 90 days concentrates in a single procedure family, and the denial rate can look fine in the meantime. For a surgical group in a WISeR state, the prior authorization pathway is the cash-flow pathway. Track pending-claim volume and aging alongside the affirmation rate and treat both as operating metrics rather than compliance paperwork.
Beginning in July 2026, CMS and WISeR participants implemented an exemption, or ‘gold carding,’ process. Exemption is granted at the individual provider NPI level. At minimum, a provider must submit at least 10 prior authorization requests across WISeR selected items and services during an assessment period and meet the WISeR participant’s minimum affirmation-rate threshold; participants may establish additional publicly posted criteria. Eligible providers are added to the exemption list quarterly and generally retain exemption status for at least one year before reevaluation. Practices should verify participant-specific thresholds and criteria against the current WISeR Operational Guide and their WISeR participant.
Practices outside the six WISeR states have no WISeR obligation today. They may still wish to monitor the service list and model results because Innovation Center models can inform future Medicare policy or broader testing and the documentation standards that produce a high affirmation rate take longer than a policy announcement to build.
The CPT 2026 code set, effective January 1, 2026, carried 418 editorial changes — 288 new codes, 84 deletions, and 46 revisions. Several land directly on the specialties in scope, and two are structural rebuilds rather than incremental edits.
Several CPT 2026 changes affect surgical revenue-cycle workflows, including restructuring of lower-extremity revascularization and thoracic endovascular aortic repair code families, changes affecting prostate biopsy and prostatectomy reporting, refinements to sacroiliac arthrodesis reporting, and a new reporting option for endoscopic sleeve gastroplasty. Practices should consult the current licensed CPT code set and applicable payer guidance for code-level requirements.
The skin substitute change deserves its own note because the magnitude is unusual. Effective January 1, 2026, CMS pays for most skin substitutes as incident-to supplies rather than as biologicals, at a single national rate finalized at $127.28 per square centimeter and revised to $127.14 by a November 2025 technical correction, subject to geographic adjustment. Only products licensed under Section 351 of the Public Health Service Act with a full biologics license application continue under ASP methodology. CMS estimated the change would reduce gross fee-for-service spending on skin substitute services by approximately $19.6 billion in 2026 — a reduction of nearly 90%. Discarded or unused product is not separately billable. Coverage determinations for diabetic foot ulcer and venous leg ulcer applications have been subject to repeated delay and withdrawal; verify current local coverage determination status with your MAC rather than relying on any summary, including this one.
Structural code rebuilds of this kind fail quietly. The claim is not rejected because the code is wrong; it is rejected because the operative note never captured the element that the new code structure requires. That is a documentation template problem and an EHR optimization problem before it is a coding problem, and it is best solved by pairing template redesign with targeted clinical coding services review of the first sixty days of claims in each rebuilt family.
Seven of these nine measures use standard revenue-cycle concepts, and HFMA MAP Keys provide standardized definitions for applicable measures. Unless a specific external source, data year, population, and methodology are cited beside a figure, the numerical ranges below are Revele-recommended operating targets—not national benchmarks, percentile benchmarks, or performance guarantees. The final two measures are surgery-specific internal metrics proposed for monitoring in 2026.
Many surgical practices have lower claim volume and higher average claim value than primary-care practices, with substantial exposure to prior authorization, facility coordination, and global periods. Those characteristics can affect A/R aging and make first-pass resolution especially important. Practices should validate the targets below against their own payer mix, specialty, locality, case mix, contractual terms, and historical trends.
How to read this table.
HFMA MAP Keys provide standardized metric definitions, which is what makes these measures comparable across practices. MGMA and comparable survey products solve a different problem — specialty and percentile positioning against a defined cohort — and where you need a defensible percentile for a compensation or valuation discussion, use a survey product rather than an operating target. Validate everything below against your own payer mix, case mix, and trend before acting on it.
| Key Performance Indicator | Operating Target | Intervention Range | HFMA MAP Domain |
|---|---|---|---|
| Net Collection Rate (NCR) | 97% – 100% | ~95% (improvement threshold) | Financial Management |
| Revenue Realization Rate (RRR) | 99% – 100% (90 days in arrears) | 95% – 98% | Standalone Billing Integrity |
| Days in A/R (DAR) | < 35 days | 40 – 50 days | Account Resolution |
| Billed A/R > 90 Days | < 12% | 20% – 30% | Account Resolution |
| Clean Claim Rate (CCR) | 97%+ | 85% – 90% | Claims & Pre-Billing |
| First Pass Resolution Rate (FPRR) | 90%+ | 80% – 85% (below 75% needs review) | Claims & Pre-Billing |
| Denial Rate | < 5% | 9% – 12% | Account Resolution |
| Site-of-Service Concordance Rate (authorized POS matches billed POS) | Effectively 100%, measured pre-operatively | No published benchmark identified; not a standard HFMA MAP Key | Not a MAP Key — internal metric |
| Post-Operative Visit Reporting Rate (99024 reported vs. expected, by global period) | Recommended internal target: Effectively 100% of reportable performed post-operative visits reported. | <95% requires review. CMS claims-based analysis found reported visits ≈28% of visits reflected in valuation for 2023 90-day globals; this is not a performance benchmark and reporting may be incomplete. | Not a MAP Key — internal metric |
A note on the last two rows: these are recommended operating targets rather than published industry benchmarks. Both exist because the 2026 and proposed 2027 policy environment created exposures that no standard MAP Key measures. Site-of-service concordance protects revenue already earned. Post-operative visit reporting supports a more accurate evidence base for future global-package valuation. For practices and procedures subject to CMS mandatory 99024 reporting, complete reporting is a compliance obligation rather than merely a performance target.
The diagnostic value often lies in the relationship between metrics rather than in any single number. A 98% clean claim rate paired with 80% first-pass resolution may indicate that claims pass front-end edits but later encounter authorization, medical-necessity, bundling, or other adjudication issues. A practice with acceptable average days in A/R, but with 25% of billed A/R over 90 days, may have aging concentrated in a particular payer, procedure family, or other segment. Use these gaps as diagnostic prompts rather than proof of a single root cause.
Surgical revenue can be affected by global-period rules, modifiers, bundling, authorization, documentation, patient responsibility, and other claim-specific factors. The issues below are common operational review areas; they are not a national ranking of revenue-loss causes, and their financial significance varies by practice, specialty, payer mix, and case mix.
Global period boundary errors. Work performed during a global period that is unrelated to the original procedure (modifier 79), a staged or related return to the operating room (modifier 58), an unplanned return for a related procedure (modifier 78), and an E/M decision for surgery made during a pre-operative period (modifier 57) each carry distinct payment consequences. Practices routinely lose payable work by defaulting to the assumption that anything inside the global window is included. The inverse error — applying a modifier to work genuinely bundled into the global — is an audit exposure. Both stem from the same root cause: the global period end date is not visible to the person coding the encounter.
Multiple procedure sequencing. When multiple procedures are performed in a session, ranking order determines payment under multiple procedure reduction logic. For Medicare services subject to multiple-procedure payment rules, the MAC ranks applicable procedures by fee-schedule amount and applies the required reduction; claim-line order itself does not determine Medicare payment. Commercial payer sequencing and modifier requirements may differ and should be validated by payer.
Co-surgery and assistant-at-surgery documentation. Medicare payment depends on the procedure’s MPFS co-surgeon and assistant-at-surgery indicators. For modifier 62, indicator 0 does not permit co-surgeons, indicator 1 may permit payment with supporting documentation establishing the medical necessity of two surgeons, and indicator 2 permits co-surgeons without additional medical-necessity documentation when the two-specialty requirements are met. For assistant-at-surgery modifiers 80, 81, 82, and AS, indicator 0 requires supporting documentation establishing medical necessity, indicator 1 is subject to a statutory payment restriction, and indicator 2 may be paid without that restriction. Modifier AS applies to physician assistants, nurse practitioners, and clinical nurse specialists. Regardless of indicator, operative documentation should clearly support each participant’s role and work.
Modifier 22 documentation. Modifier 22 may be appropriate when the work required to provide a service is substantially greater than typically required. Supporting documentation should clearly explain the unusual circumstances and additional work, in a manner consistent with applicable payer requirements. Because modifier-22 claims may receive additional review, practices should monitor payer-specific requirements and outcomes; additional payment is not guaranteed.
Bundling and NCCI edits on rebuilt code families. The 2026 lower-extremity revascularization and TEVAR rebuilds moved access, imaging, supervision and interpretation, and extension work into the primary codes. Charge capture templates written against the prior structure will generate bundling denials that look like coder error and are actually template debt.
Implant, device, and supply documentation. Where implants or high-cost devices are separately payable, invoice documentation and units-of-service reconciliation determine whether payment survives audit. Under the 2026 skin substitute rules, documenting the exact area applied and not billing discarded product became a payment condition rather than a best practice.
Patient responsibility on high-deductible plans. A surgical case is frequently the moment a patient meets their annual deductible, meaning the patient-responsibility balance for a single case can exceed a month of office collections. Pre-service estimation, financial clearance concurrent with authorization, and appropriate patient-payment options may improve pre-service collections and reduce the amount that ultimately enters aged patient A/R. Financial clearance should run on the same clock as authorization, not after scheduling.
Surgical denials often arise from recurring categories that may be addressable upstream. The table below identifies common operational sources and preventive controls. It is not a national ranking of denial frequency, and the actual root cause of a denial depends on the payer, the claim, the documentation, and the applicable policy.
| Denial Category | Common Upstream Source | Upstream Fix |
|---|---|---|
| Site-of-service mismatch | Surgical scheduling — setting changed after authorization | Hard stop verifying authorized POS against scheduled POS before the case posts; defined re-authorization path on setting change |
| Missing, expired, or non-matching authorization number | Pre-certification — authorization obtained but not carried to the claim | Authorization and WISeR unique tracking numbers written to the case record and auto-populated on the claim; expiration date monitored against the surgery date |
| Medical necessity / clinical documentation | Clinic note — conservative-care history and functional impairment not documented to LCD or payer policy standards | Template fields mapped to the actual LCD or payer policy language for the practice’s ten highest-volume procedures |
| Bundling / NCCI edits | Charge capture templates written against superseded code structure | Rebuild templates for the 2026 revascularization and TEVAR families; audit the first sixty days of claims in each |
| Modifier 25 / same-day E/M denial | Documentation does not establish the E/M as significant and separately identifiable | Documentation that clearly substantiates the significant, separately identifiable E/M work beyond the usual pre- and post-service work of the procedure; track the denial rate as a leading indicator ahead of the CY 2027 proposal. |
| Global period conflicts | Global end date invisible at the point of coding | Surface the active global period and its end date in the encounter view; enforce modifier 24/57/58/78/79 selection rules |
| Assistant surgeon / co-surgery not supported | Claim or modifier conflicts with the MPFS co-surgeon or assistant-at-surgery indicator, or required supporting documentation is missing | Check the MPFS co-surgeon and assistant-at-surgery indicators before billing; obtain medical-necessity documentation when the applicable indicator requires it, and ensure the operative record clearly supports each participant’s role and work |
| Credentialing and enrollment lapse | Provider enrollment — new surgeon, new location, or expired revalidation | Monthly enrollment and revalidation monitoring; hold billing rather than submitting claims that will be denied and age |
Denial volume is a lagging indicator. Denial concentration is the useful one. Segment by payer, by surgeon, by procedure family, and by facility, and the actionable pattern usually appears within one reporting cycle — a single payer running a new edit, a single surgeon whose dictation template lags a code change, a single facility whose scheduling process drifted. Groups without the analytics bandwidth to segment at that resolution should evaluate dedicated AR and denial management support before the 2027 policy changes compound the exposure.
The eight specialties in scope share the same regulatory exposure but not the same concentration. The table below is a starting hypothesis for where to look first, not a substitute for modeling your own claims.
| Specialty | Potential 2026 Exposure | First Place to Look |
|---|---|---|
| General Surgery | Efficiency adjustment across a broad 090-day global case mix; heavy same-day E/M plus minor procedure clinic pattern | CY 2027 same-day E/M exposure model; 99024 reporting rate |
| Colorectal | Mixed endoscopic and open case mix straddling office, ASC, and hospital settings | Site-of-service concordance; endoscopy bundling and modifier sequencing |
| Surgical Oncology | Multi-specialty co-surgery volume; long authorization lead times; high per-case dollar value | Modifier 62 documentation discipline; A/R > 90 days concentration by payer |
| Vascular | Complete rebuild of the lower extremity revascularization code family; skin substitute payment reset; WISeR-listed service categories | Operative note capture of territory, lesion complexity, approach, and device; wound care claim logic |
| Thoracic | TEVAR bundling changes; facility-weighted case mix absorbing the PE realignment | Charge capture templates for the restructured 33880-series family |
| Cardiac Surgery | Typically highly facility-based; efficiency adjustment on high-wRVU procedures may combine with limited non-facility offset | Per-surgeon wRVU re-pricing against employment agreement terms |
| Trauma / Acute Care Surgery | Payer mix may include meaningful self-pay, liability, and workers’ compensation exposure; emergent cases may limit the ability to obtain authorization in advance | Retro-authorization and emergent-exception workflows; critical care time documentation; third-party liability identification at registration |
| Neurosurgery | High per-case dollar value and substantial prior authorization exposure; spine categories appear in WISeR selected services. | Medical necessity documentation mapped to LCD language; affirmation rate tracking in WISeR states |
A contract and compensation note that applies to all eight.
Commercial and Medicare Advantage agreements that incorporate current-year Medicare RVUs or fee-schedule values may transmit some or all of the 2026 efficiency adjustment, depending on the specific contract language. Identify which agreements update automatically, which use a fixed base year, and which require amendment before estimating financial impact. Because contract mechanics differ, practices should review affected agreements with appropriate contracting, legal, and valuation advisors before assuming that a federal payment change flows through to commercial reimbursement or physician compensation.
The employment side carries a second, quieter asymmetry. The efficiency adjustment compresses work RVUs, so a surgeon paid on wRVU production feels it directly. The facility practice expense realignment does not touch work RVUs at all — it reduces total RVUs on services furnished in the facility setting. An employed surgeon paid strictly on wRVUs will not feel that reduction; the employing health system or practice absorbs it on the professional claim. Compensation per wRVU holds steady while total revenue per case declines, and the gap widens as the share of work performed in an operating room increases. Health systems and surgical groups with wRVU-based agreements should quantify that spread by service line and raise it with counsel and their valuation advisors before the next contract cycle, rather than discovering it in a year-end margin variance.
Act Now (Next 90 Days)
Model the CY 2027 same-day E/M proposal and comment before September 14, 2026. Re-price twelve months of claims where an office or outpatient E/M and a 0-, 10-, or 90-day global procedure were billed by the same practice on the same date. Submit the number, not an opinion.
Close the site-of-service concordance gap. Build the pre-operative hard stop that matches the authorized place of service to the scheduled place of service, with a defined re-authorization path when the setting changes after authorization.
Fix 99024 post-operative visit reporting. Measure reported versus expected by surgeon and by global period length. CMS is using these data as part of its ongoing evaluation of global-surgery payment accuracy and potential revaluation strategies.
Rebuild charge-capture templates for the restructured 2026 lower-extremity revascularization and TEVAR code families first; audit the first sixty days of claims in each.
Re-price every surgeon’s wRVU production at 2026 values. Do it before the next compensation cycle, from actual claims rather than a specialty average.
Audit skin substitute claim logic. Confirm units reflect only the area applied, that discarded product is not billed, and that current MAC coverage determinations have been verified rather than assumed.
In WISeR states, for WISeR requests the practice submits or coordinates, track both prior authorization volume and affirmation rate. CMS’s baseline exemption criteria require at least 10 prior authorization requests during an assessment period, plus the WISeR participant’s minimum affirmation rate threshold; participant-specific criteria may also apply.
Map procedural CPT codes by global surgery indicator. Any 010 or 090 service billed incident-to requires physical, on-site presence of the supervising physician or other practitioner permitted to supervise the service under Medicare rules and applicable state law; virtual direct supervision does not meet it.
Monitor & Prepare
Global surgical package revaluation. CMS proposed pausing MACRA data collection while posting imputed post-operative visit RVUs and soliciting revaluation strategies. Expect movement through future rulemaking rather than a single announcement.
The CY 2027 practice expense overhaul. CMS proposed phasing out the indirect practice cost index in favor of a stabilizer and separately solicited comments on whether the facility-versus-non-facility differential should continue at all.
Inpatient-only list elimination through January 1, 2029. Each annual tranche moves more cases into settings with different authorization requirements and different facility economics.
WISeR expansion and gold carding. CMS and WISeR participants began implementing the exemption process in July 2026. Baseline eligibility requires at least 10 prior authorization requests during an assessment period, plus the participant’s minimum affirmation rate threshold; participant-specific criteria may also apply. Verify current status directly with CMS and your MAC.
CMS-0057-F FHIR APIs, January 1, 2027. Impacted payers must implement FHIR-based prior authorization APIs for non-drug items and services to create an electronic workflow that reduces reliance on portal and fax processes. Practices should assess EHR and clearinghouse readiness to take advantage of those APIs.
The next efficiency adjustment cycle. CMS has indicated it intends to reapply the methodology roughly every three years. Defend the exclusion list, not the percentage.
| Action Item | Primary Owner | Timeframe | Strategic Impact |
|---|---|---|---|
| Model CY 2027 same-day E/M exposure and file comments | CFO / Practice Administrator | Before Sept. 14, 2026 | Quantifies a major open threat to surgical clinic revenue. |
| Implement pre-operative site-of-service concordance check | Surgical Scheduling / Pre-Cert | Immediate | Reduces a high-cost, often difficult-to-recover denial category. |
| Map procedure list by global indicator for supervision rules | Compliance / Clinic Operations | Immediate | Prevents unsupported incident-to billing on 010/090 services |
| Measure and close the 99024 reporting gap | RCM Lead / Medical Director | Q3–Q4 2026 | Supports accurate data for future global-package valuation |
| Rebuild templates for the restructured lower-extremity revascularization and TEVAR code families | Coding Lead / EHR Analyst | Immediate | Stops bundling denials on rebuilt code families |
| Re-price each surgeon’s wRVU production at 2026 values | CFO / Compensation Committee | Before next comp cycle | Prevents an unmodeled compensation shortfall |
| Audit skin substitute units, waste, and coverage status | RCM Lead / Wound Care | Immediate | Prevents denials and overpayment exposure under the new methodology |
| Instrument prior authorization turnaround by payer | Pre-Cert Lead | Q3 2026 | Creates escalation and contract leverage against published payer metrics |
| Track WISeR PA volume, affirmation rate, and UTN capture | RCM Lead (six WISeR states) | Ongoing | Tracks baseline eligibility for WISeR exemption and participant-specific gold-card criteria. |
| Surface global period end dates in the encounter view | EHR Analyst / Coding Lead | Q3 2026 | Recovers payable work and reduces audit exposure simultaneously |
| Automate payer-specific multiple-procedure edits and sequencing validation | Billing Systems | Q3 2026 | Prevents payer-specific sequencing and modifier errors; Medicare MACs rank applicable procedures by fee-schedule amount. |
| Reinstate disciplined modifier 22 submission with comparative narrative | Coding Lead / Surgeons | Q4 2026 | Recovers value on atypical cases after wRVU compression |
| Move financial clearance onto the authorization clock | Patient Access | Q3–Q4 2026 | Converts high-deductible balances into pre-service collections |
| Identify contracts that adopt current-year Medicare values automatically | CFO / Contracting | Q4 2026 | Surfaces where the efficiency adjustment flowed through unchallenged |
| Build the preliminary 2027 model from proposed conversion factors | CFO | Q4 2026, revisit after final rule | Prevents annualizing a non-recurring 2026 statutory update |
| Model G2211 separately from same-day procedural exposure | CFO / Coding Lead | Q4 2026 | Avoids assuming a G2211 offset where the add-on is not independently payable. |
The terms below appear throughout this guide and across the Revele specialty benchmarking series. Each definition is written to stand on its own.
| Term | Definition |
|---|---|
| Efficiency adjustment | A 2.5% reduction to the work RVUs and corresponding intra-service physician time of many non-time-based services, finalized in the CY 2026 Physician Fee Schedule final rule. E/M, behavioral health, care management, maternity global codes, and telehealth-list codes are excluded. CMS has indicated it intends to reapply the methodology approximately every three years. |
| Global surgical package | A single Medicare payment that bundles pre-operative evaluation, the procedure itself, and a defined post-operative period. The global surgery indicator assigned to a code (000, 010, or 090) determines the length of that post-operative period. |
| Global surgery indicator | The Medicare Physician Fee Schedule field identifying whether a procedure carries a 0-day, 10-day, or 90-day global period. It governs post-operative visit reporting, modifier selection, and whether virtual direct supervision is available. |
| CPT 99024 | The post-operative follow-up visit code used to report visits furnished during a global period at no additional charge. Claims-based reporting is required for practices with 10 or more practitioners in 9 states for a specified list of procedures, and is voluntary elsewhere. |
| Modifier 54 | Surgical care only. Appended when one practitioner performs the procedure and another assumes post-operative care, splitting the global package payment between them. |
| Site-of-service concordance rate | The share of surgical cases where the place of service on the prior authorization matches the place of service billed on the claim. Not a standard HFMA MAP Key; an internal metric recommended for 2026 because of Inpatient Only list and ASC list migration. |
| Inpatient Only (IPO) list | The CMS list of procedures Medicare pays for only when performed in the inpatient hospital setting. CMS began a three-year phase-out in CY 2026, removing 285 procedures, with full elimination scheduled for January 1, 2029. |
| ASC Covered Procedures List | The list of procedures Medicare pays for when furnished in an ambulatory surgical center. CMS added 560 procedures for CY 2026 — 289 under revised criteria plus 271 concurrently removed from the Inpatient Only list. |
| WISeR model | The Wasteful and Inappropriate Service Reduction model, a CMS Innovation Center model running January 1, 2026 through December 31, 2031 in Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. It applies prior authorization or prepayment review to selected Part B items and services under Original Medicare. |
| Unique tracking number (UTN) | The MAC-generated identifier assigned to a WISeR prior authorization request. When an affirmation or non-affirmation is on file, and the service is furnished, the corresponding claim must include the UTN. |
| CMS-0057-F | The CMS Interoperability and Prior Authorization final rule. Effective January 1, 2026, impacted payers must decide expedited prior authorization requests within 72 hours and standard requests within 7 calendar days, provide a specific denial reason, and publicly report prior authorization metrics. FHIR-based API requirements follow on January 1, 2027. |
| First Pass Resolution Rate (FPRR) | The percentage of claims paid in full on first submission without rework, appeal, or resubmission. It is particularly diagnostic in surgery because average claim value is high and rework cost per claim is disproportionate. |
| Days in A/R (DAR) | The average number of days between the date of service and payment. Surgical practices often have structurally higher A/R days than office-based specialties because of authorization lead times and facility coordination. |
| G2211 | The visit complexity add-on for office and outpatient E/M services. Generally not payable when the associated E/M base code is reported with modifier 25 for a same-day non-preventive procedure. CMS has proposed replacing it with a modifier for CY 2027. |
The efficiency adjustment is a 2.5% reduction in work RVUs and the corresponding intraservice physician time for nearly all non-time-based services, finalized in the CY 2026 Physician Fee Schedule Final Rule (CMS-1832-F) and effective January 1, 2026. CMS excluded time-based services, evaluation and management visits, behavioral health services, care management, maternity care codes with an MMM global indicator, codes on the Medicare telehealth list, and new CPT codes effective January 1, 2026. Because the exclusions cover cognitive services and the adjustment applies to procedures, imaging interpretation, and outpatient interventions, it specifically compresses procedural specialties. The reduction applies to base work RVUs rather than the conversion factor, so it also flows into wRVU-based physician compensation, internal productivity measurement, and any commercial contract that references current-year Medicare RVU values. CMS has indicated it intends to reapply the methodology approximately every three years.
CY 2026 was the first year with two conversion factors, as required by MACRA: $33.5675 for clinicians who are qualifying participants in an Advanced Alternative Payment Model and $33.4009 for everyone else, representing increases of 3.77% and 3.26% over the CY 2025 conversion factor of $32.3465. Both figures reflect statutory updates of 0.75% and 0.25%, a one-year 2.5% increase enacted in Public Law 119-21, and a 0.49% budget neutrality adjustment. The 2.5% component expires December 31, 2026. CMS's CY 2027 proposed rule, released July 14, 2026, would set the conversion factors at approximately $33.17 for qualifying APM participants and $32.84 for non-qualifying clinicians, representing decreases of 1.19% and 1.68%, respectively. Those figures are proposed, not final, and should be updated after the CY 2027 final rule is published.
For CY 2026, CMS reduced the portion of indirect practice-expense RVUs allocated based on work RVUs for services furnished in facility settings to 50% of the amount allocated in the non-facility setting. CMS said its longstanding methodology—which assumed physicians maintained separate practice locations even when furnishing some care in hospitals—may no longer reflect contemporary practice, given the growth in physician employment by hospitals and health systems and the potential for overlap between physicians' indirect practice expenses and facility payments. CMS implemented the change in CY 2026 without a multi-year phase-in, whereas prior direct practice expense updates involving supplies, equipment, and clinical labor were phased in over 4 years. The policy is budget neutral in aggregate under the PFS RVU methodology but redistributive. AMA analysis of the final rule estimates that physician payment for facility-based services decreases overall by roughly 7%, while payment for non-facility services increases by roughly 4%; actual effects vary substantially by code, specialty, and service mix, and geographic locality. For surgical groups whose Medicare PFS revenue is heavily weighted toward facility-based procedures, the facility-side reduction can substantially outweigh any non-facility offset. These estimates measure physician payment under the PFS and exclude separately payable payments for HOPD or ASC facilities. For CY 2027, CMS is soliciting comment on whether the facility/non-facility site-of-service differential remains appropriate and whether alternative approaches to allocating indirect practice expense should be considered.
Only for services outside the 010 and 090 global surgery indicators. In the CY 2026 Physician Fee Schedule final rule, CMS permanently adopted a definition of direct supervision permitting the supervising physician or practitioner to be immediately available through real-time, two-way audio and video telecommunications, excluding audio-only, for services furnished under 42 CFR 410.26. CMS expressly excluded services assigned a global surgery indicator of 010 or 090, citing clinical complexity and the importance of on-site availability during post-operative periods, and it solicited comment on whether 000-global procedures should be excluded as well. For surgical practices that use advanced practice providers to extend clinic capacity, this creates a split within the same clinic session: a 000-global service may be virtually supervised while a minor excision carrying a 10-day global period requires physical, on-site presence of the supervising physician or other practitioner permitted to supervise the service under Medicare rules and applicable state law to support incident-to billing. Practices should map their procedural CPT codes to global indicators and enforce this rule in scheduling and charge capture, rather than relying on staff recall.
In the CY 2027 Physician Fee Schedule proposed rule, CMS proposed to reduce payment when a separately identifiable office or outpatient evaluation and management visit is furnished by the same physician, or a physician in the same practice, on the same day as a procedure with a 0-, 10-, or 90-day global period. Under the CY 2027 proposal, when a separately identifiable office/outpatient E/M visit is furnished for the same patient by the same physician, or a physician in the same group practice, on the same day as a procedure with a 0-, 10-, or 90-day global period, the most expensive service—either a surgical procedure or the E/M visit—would be paid at 100%, while all other applicable surgical procedures or E/M visits furnished that day would be paid at 50%. CMS framed the proposal as correcting duplicate payments for overlapping work, noting a similar proposal in the CY 2019 proposed rule, which was not finalized. The policy would reduce payment for correctly coded, appropriately documented services rather than targeting improper use of modifier 25, so practices with high same-day procedure conversion rates carry the greatest exposure. Comments are due September 14, 2026.
In the CY 2026 rule, CMS evaluated methods to rebalance payment between the surgical and post-operative components of the global package. CMS’s claims-based analysis found that reported post-operative visits were roughly 28% of the visits reflected in valuation for 2023 90-day globals; reporting limitations mean that figure should not be interpreted as a precise measure of all visits furnished. CMS also modeled a 99024-based method that would increase the average procedure share used when modifier -54 applies from about 82% to 91%; this is an allocation within the global package, not an increase in total global payment. For CY 2027, CMS proposed pausing the data collection required by section 523 of MACRA, posted a public-use file showing imputed RVUs for 10- and 90-day post-operative visits, and solicited comments on revaluation strategies. The practical implication is that under-reporting 99024 can make observed utilization appear lower, thereby strengthening the apparent case for downward revaluation, even when visits were furnished but not reported. Practices should report 99024 with the same discipline applied to billable encounters and track reported versus expected post-operative visits by surgeon and global period length.
The CY 2026 Hospital Outpatient Prospective Payment System and Ambulatory Surgical Center final rule (CMS-1834-FC), released on November 21, 2025, began phasing out the Inpatient Only list over a three-year transition period ending on January 1, 2029. For CY 2026, CMS removed 285 mostly musculoskeletal services, listed in Table 132 of the final rule. CMS also expanded the ASC Covered Procedures List by revising its criteria and converting five general exclusion criteria into nonbinding physician safety considerations, adding 560 procedures in total: 289 under the revised criteria and 271 codes concurrently removed from the Inpatient Only list. CMS emphasized that removal from the Inpatient Only list does not indicate that a procedure is appropriate only for the outpatient setting, and that inpatient admissions remain payable under Part A when inpatient criteria are met.
A site-of-service mismatch denial occurs when prior authorization is obtained for one place of service, commonly inpatient (POS 21), and the case is ultimately performed in an ambulatory surgical center (POS 24) or hospital outpatient department (POS 22). If the authorized site of service does not match the billed place of service, the claim may be denied or require reauthorization, depending on the payer's policy. Practices should verify site-of-service authorization before the case and maintain a payer-specific process for setting changes. The risk rose in 2026 because the Inpatient Only list phase-out and the ASC Covered Procedures List expansion made many procedures payable in more settings, with decisions often made close to the surgery date on clinical grounds. Prevention is a scheduling control rather than a billing control: a hard stop verifying that the authorized place of service matches the scheduled place of service before the case proceeds, plus a defined re-authorization path whenever the setting changes.
The Wasteful and Inappropriate Service Reduction model is a CMS Innovation Center payment model running from January 1, 2026, through December 31, 2031, in six states: Arizona, New Jersey, Ohio, Oklahoma, Texas, and Washington. It applies to Original Medicare, not Medicare Advantage. For a defined list of Part B items and services, providers in those states either submit a prior authorization request to a WISeR model participant or allow the claim to proceed to prepayment medical review. Selected service categories include areas of surgical relevance, such as cervical fusion, epidural steroid injections, and skin substitute application. The specific items and services subject to WISeR review are identified in Appendix A of the current Operational Guide; Appendix B contains applicable ICD-10 indications, and Appendix C contains associated codes. Because these appendices are updated periodically, practices should use the current guide rather than a static summary. Site of service matters: for HOPD and ASC services, WISeR review applies to facility-based encounters and claims, not professional services; office and home services are handled on professional claims. If a prior authorization request has an affirmation or non-affirmation on file and the service is furnished, the corresponding claim must include the MAC-generated UTN. Claims submitted without a prior authorization decision instead route to prepayment medical review and do not require a UTN at initial submission. Beginning in July 2026, CMS and WISeR participants implemented an individual-NPI exemption process. Baseline eligibility requires at least 10 prior authorization requests during an assessment period, plus the participant’s minimum affirmation rate threshold; participant-specific criteria may also apply.
Effective January 1, 2026, CMS-0057-F requires Medicare Advantage organizations, state Medicaid and CHIP fee-for-service programs, Medicaid managed care plans, and CHIP managed care entities to send prior authorization decisions within 72 hours for expedited requests and 7 calendar days for standard requests. Qualified Health Plan issuers on the federally facilitated exchanges are subject to other provisions of CMS-0057-F but are excluded from these 2026 decision-timeframe requirements. Payers must provide a specific reason for each denial regardless of whether the decision is communicated by portal, fax, email, mail, or phone. The rule does not apply to prior authorization decisions for drugs. Impacted payers were required to publicly post prior authorization metrics, including approval and denial rates and average decision time, by March 31, 2026. FHIR-based API requirements follow on January 1, 2027. For surgical groups, public metrics provide a benchmark for comparing measured internal turnaround experience with what a payer reported, which is useful in both escalation and contract discussions.
The CPT 2026 code set includes several changes that can affect surgical revenue-cycle workflows. Among the most significant for the specialties covered here are restructuring of lower-extremity revascularization and thoracic endovascular aortic repair code families, changes affecting prostate biopsy and prostatectomy reporting, refinements to sacroiliac arthrodesis reporting, and a new reporting option for endoscopic sleeve gastroplasty. Practices should consult the current licensed CPT code set and applicable payer guidance for code-level reporting requirements.
Effective January 1, 2026, CMS pays most skin substitutes as incident-to supplies rather than as biologicals, using a single national payment rate of $127.14 per square centimeter, subject to applicable geographic adjustment. The CY 2026 final rule as originally published stated $127.28 per square centimeter, but CMS corrected that figure to $127.14 in a November 28, 2025, technical correction. Only products licensed under Section 351 of the Public Health Service Act that have a full biologics license application continue to be paid under the ASP methodology. CMS estimated that the change would reduce gross Medicare fee-for-service spending on skin substitute services by approximately $19.6 billion in 2026, nearly a 90% reduction. Discarded or unused product is not separately billable, so units of service must reflect only the area actually applied. Coverage determinations for diabetic foot ulcer and venous leg ulcer applications have been repeatedly delayed or withdrawn, so practices should verify the current local coverage determination status directly with their MAC. Claim logic built for the prior payment structure will generate denials under the new classification.
Revele's recommended 2026 operating targets are: net collection rate of 97%–100%; revenue realization rate of 99%–100% measured 90 days in arrears; days in A/R below 35 days; billed A/R over 90 days below 12%; clean claim rate of at least 97%; first pass resolution rate of at least 90%; and denial rate below 5%. Revele also recommends measuring site-of-service concordance, targeting 100% effectiveness before the procedure, and reporting of reportable post-operative visits when applicable. These figures are operating recommendations rather than published national percentile benchmarks and should be validated against the practice's specialty, payer mix, locality, case mix, contracts, and historical performance.
This guide is part of an ongoing Revele series benchmarking revenue cycle performance and 2026 regulatory exposure by specialty and care setting. Each guide follows the same structure — what changed in federal payment policy, the KPIs that matter for that specialty’s case mix, where revenue is commonly lost, and a next-quarter action plan — so results can be compared across a multi-specialty group or a health system portfolio.
| Guide | Written For | Published |
|---|---|---|
| Surgery RCM Benchmarks 2026 (you are here) | General surgery, colorectal, surgical oncology, vascular, thoracic, cardiac, trauma and acute care surgery, and neurosurgery groups | This guide |
| Orthopedic RCM Benchmarks 2026 | Orthopedic practice administrators, surgeons, and physician-group financial leaders | June 10, 2026 |
| Primary Care RCM Benchmarks 2026 | Adult primary care, family medicine, and internal medicine practices | July 28, 2026 |
| Pediatric RCM Benchmarks 2026 | Pediatric practices with Medicaid, CHIP, EPSDT, and VFC exposure | July 9, 2026 |
| The RHC Pressure Test | Rural Health Clinic owners, administrators, medical directors, and revenue cycle leaders | June 3, 2026 |
| The FQHC Pressure Test | FQHC CEOs, CFOs, COOs, revenue cycle leaders, compliance officers, and board members | May 14, 2026 |
Why the specialty matters as much as the benchmark.
The same KPI can carry very different meaning across case mixes. A pediatric practice and a neurosurgery group may both report a 5% denial rate while facing materially different financial exposure, because the average claim value differs by orders of magnitude. Days in A/R that would signal a problem in primary care may be normal in surgery, where authorization lead time and facility coordination extend the cycle. Practices should start by matching their case mix to the guide before comparing against a cross-specialty average, and multi-specialty groups should expect operating targets to differ by service line rather than roll up to a single number.
The 2026 policy changes do not affect every surgical practice in the same way, but they create several measurable revenue-cycle exposures: reduced work RVUs for many non-time-based services, a redistribution of physician PFS payment between facility and non-facility services under the indirect practice-expense change, expanding site-of-service options, new prior-authorization timing and reporting requirements for specified payers, and WISeR review for selected Original Medicare services in six states.
In a surgical practice, a single denied case carries the revenue weight of dozens of office visits. That is why the first-pass resolution rate, not the denial rate, is the metric that determines the year.
The operational response is to measure these effects using practice-specific data. Priority areas include site-of-service concordance, accurate authorization capture, complete post-operative reporting where required, updated charge-capture workflows, visibility into active global periods, denial segmentation, and re-pricing of actual claims under current and proposed payment rules.
For CY 2027, the proposed same-day E/M/procedure payment policy, proposed conversion factors, and other proposed PFS changes are not final. Practices should distinguish finalized CY 2026 requirements from proposed CY 2027 changes and update financial models after CMS publishes the CY 2027 final rule.
Revele provides revenue-cycle analysis and operational support for surgical practices, including KPI review, authorization and site-of-service workflow assessment, charge-capture review, denial analysis, and scenario modeling for proposed payment changes. Any analysis should be tailored to the practice's payer mix, contracts, locality, case mix, and current CMS and payer requirements.
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HFMA MAP Keys are used for metric definitions where applicable. Numeric operating targets are Revele recommendations unless a specific external benchmark, data year, population, and methodology are cited beside the figure. Regulatory and coding sources used in this article include the CY 2026 Physician Fee Schedule Final Rule (CMS-1832-F), the CY 2026 OPPS/ASC Final Rule (CMS-1834-FC), the CY 2027 Physician Fee Schedule Proposed Rule, the AMA CPT 2026 code set, CMS-0057-F, CMS WISeR model documentation, and the One Big Beautiful Bill Act (Public Law 119-21). CY 2027 conversion factors, the same-day evaluation and management proposal, the practice expense methodology overhaul, and the proposed pause of MACRA section 523 data collection are proposed and not final; CY 2027 PFS proposed-rule comments are due September 14, 2026, and practices should update models after publication of the CY 2027 final rule. Skin substitute coverage determinations have been subject to repeated delays and withdrawals; verify current local coverage determination status with your MAC. WISeR selected services and gold carding program details are updated periodically; verify against the current Provider and Supplier Operational Guide. Payment amounts are national averages before geographic adjustment and should be validated against the Medicare Physician Fee Schedule lookup for your locality. Denial percentages, per-claim rework costs, and prior authorization burden figures derive from industry, survey, and vendor reporting and should be treated as directional. All figures are starting points; validate against your own payer mix, case mix, and trended performance. Current through August 2026.