The Service Line

Three federal payment rules that set 2027 revenue for surgery centers, home health agencies, cardiologists and every procedural practice have still not posted, and the calendar year starts in 61 days. The Centers for Medicare and Medicaid Services (CMS) released last year’s physician fee schedule final rule on October 31, and a search this run found no 2027 final for the physician fee schedule, the hospital outpatient and surgery center rule, or the home health rule. Five of our six Service Line deep dives ran this week: cardiology on Tuesday, oncology on Wednesday, behavioral health on Thursday, home health, hospice and post-acute care on Friday, and surgery centers on Saturday. The Monday primary care and accountable care organization issue did not publish, and we would rather say so than imply a full six. Below are the five items a cross-specialty operator should carry out of the week, each re-checked against a source this run, plus one connective insight. Confidence: High on the outage note and on the absence of the three final rules in our search; other levels stated per item.

Every procedural specialty: the three 2027 payment finals are overdue, and the proposals are still your budget

The CMS physician fee schedule page and search results still show only the July proposed rule, which would cut the conversion factor, the dollar multiplier on every relative value unit, by about 1.7 percent to roughly $32.84 once the one-year 2026 increase expires. Our cardiology issue Tuesday reported proposed work value cuts of 10 to 28 percent on structural heart codes, and our surgery issue Saturday reported a proposed 2.4 percent surgery center update, 638 services leaving the inpatient-only list, and an end to the alternative device pass-through pathway in the outpatient and surgery center rule. Our home health issue Friday reported a proposed 2.4 percent aggregate increase that includes a temporary 3.0 percent cut. None of those proposal details was re-read against rule text this run. A Medbridge webinar titled for the home health final is listed for November 12, which hints at timing but is not an announced date. Budget on the proposed numbers and a softened scenario until the finals post. Confidence: High that none of the three finals had posted in our search; Low on release dates.

Home health and hospice: the enrollment freeze lapses November 13, and no extension notice has posted

Our Friday issue reported CMS’s chief operating officer saying any extension must run a full six months. This run, a Home Health Care News analysis still puts the expiration at November 13, with an extension widely expected but not announced, and notes that CMS would publish any extension or lifting in the Federal Register. We found no such notice. Enforcement is the reason the decision matters: the Los Angeles takedown we covered, announced October 22, alleges a $138 million hospice scheme with a live-discharge rate above 85 percent, and a separate indictment alleges a $1.62 billion addiction treatment network. Both are allegations only. For an operator, the plan is binary: new enrollment and ownership-change applications either stay frozen into mid-May 2027 or reopen in under two weeks. Confidence: High that no extension notice turned up; Medium on the extension outlook, which is analyst expectation.

Behavioral health: a judge struck the narrower “medically frail” test on October 29, and the work rules still start January 1

Our Thursday issue reported that CMS’s interim final rule on Medicaid work requirements narrowed the medical frailty exemption. Since then, reports of an October 29 ruling in the multistate challenge say Judge Richard Stearns found CMS unlawfully limited who qualifies as medically frail by requiring that a condition “significantly impairs” ability to work, per The Daily Record. The same judge had denied a preliminary injunction against the rule in July, per AJMC, so the work requirements themselves proceed. Reports do not agree on the order’s procedural posture, so read the order before changing policy. Separately, the Drug Enforcement Administration’s final telemedicine special registration rule has been at White House review since August 25, with more stakeholder meetings scheduled for November, per Frier Levitt; we could not confirm the December 31 expiration of the current flexibilities that we reported Thursday, so verify it before you plan around it. Confidence: Medium on the ruling’s scope; High on the review status as reported.

Deals: two nine- and ten-figure bids were struck while the buyers’ own volumes softened

Cencora agreed October 21 to acquire American Oncology Network at a $2.4 billion enterprise value, with no closing date given and Cencora’s November 4 earnings call the next public window, per the company release we cited Wednesday. HealthSpan Partners, a Bon Secours Mercy Health affiliate, agreed to buy Surgery Partners at about $5.7 billion enterprise value, closing expected in the first quarter of 2027. Our Saturday issue reported HCA’s surgery center volumes down 5.4 percent in the third quarter and Universal Health Services missing profit expectations on weaker surgical trends, per trade accounts of earnings calls. PsychPlus also bought Precision Psychiatric Services, adding more than 100 psychiatrists, price undisclosed, and Deaconess closed its purchase of 31 HCA home health and hospice agencies. The pattern: buyers are paying for scale and licenses while same-facility volume is the number in doubt. Before you take or make an offer, ask for same-facility case counts by payer class, not only the enterprise value. Confidence: High on the Cencora and Surgery Partners terms (company filings, per Tuesday and Saturday); Medium on the volume read, which rests on trade-press accounts. These deal terms were not re-fetched this run.

Cardiology: the valve coverage fight moves from review to results on Monday

Medicare’s national coverage analysis of transcatheter aortic valve replacement for aortic regurgitation remains open, with a proposed decision reportedly due by March 2027, per our Tuesday issue. New this week: trade previews of the Transcatheter Cardiovascular Therapeutics meeting put the primary results of PROGRESS, a randomized trial of valve replacement versus clinical surveillance in moderate aortic stenosis, on Monday, November 2. A search this run found no results yet. PROGRESS is sponsored by Edwards Lifesciences, so read the data independently of the sponsor’s release. A positive result would push the next coverage request toward moderate disease and a larger referral pool. Plan your calendar around it, not your budget. Confidence: High that the presentation is scheduled; no result claims are made.

Connective tissue: the control person is the unit of risk, for regulators and for buyers

The Los Angeles cases and the enrollment freeze share a logic: regulators now look through single-site entities to the people and patients they share, and block new entrants rather than police each one. The deals above are the market’s mirror image. With new hospice and agency enrollment frozen, an existing license has scarcity value, and with weaker same-facility volume, a buyer is paying for scale it must then defend. For any operator, the common question is the same one prosecutors ask: who controls these sites, which patients and referral sources overlap, and does the revenue per case hold without the growth story? Pull that census and referral overlap for your own sites before a payer, a regulator or a suitor does it for you. Confidence: Medium, our synthesis of the sourced items above, not a sourced finding.

This Week’s Operator Metrics, At a Glance

• Cardiology: about 11.5 percent combined proposed cut to the work portion of left atrial appendage closure (33340), our arithmetic on proposed values (not re-verified this run).
• Oncology: about $6.9 million of enterprise value per provider in Cencora’s American Oncology Network deal, our arithmetic (not re-verified this run).
• Behavioral health: Florida projects Medicaid autism therapy spending falling from $3.86 billion to $2.88 billion, a state projection (not re-verified this run).
• Home health and hospice: VITAS grew hospice census 9.4 percent while accruing $828,000 of Medicare cap liability against $6.1 million a year earlier (not re-verified this run).
• Surgery centers: USPI same-facility cases fell 1.5 percent while net revenue per case rose 6.1 percent (not re-verified this run).
• Primary care and accountable care organizations: no issue published this week.