July brought a wave of regulatory and technology shifts that private practices need to track now — from proposed 2027 Medicare payment cuts and new ICD-10-CM codes to expanding AI oversight in prior authorization, documentation, and billing. The throughline: practices that tighten coding accuracy, strengthen AI governance, and stay transparent with patients will be best positioned as reimbursement tightens and scrutiny grows.

“Vital Signs" is a monthly RCM column for private practices and medical billers. Each edition covers the headlines that matter and what to do about them. Browse previous editions.

Independent physician practices are facing a growing mix of reimbursement pressure, regulatory change, technology disruption, and patient access challenges. This month’s news highlights several developments that could directly affect coding, documentation, prior authorization, collections, compliance, and the patient experience—from the proposed 2027 Medicare Physician Fee Schedule and upcoming ICD-10-CM updates to expanded use of AI in clinical and revenue cycle workflows. Understanding these changes now can help practices strengthen operations, protect revenue, and prepare staff for what comes next.

Details: On July 14, 2026, CMS published its calendar year 2027 Medicare Physician Fee Schedule Proposed Rule and with it comes several proposed changes. Here are a few important ones:

Also of interest to physicians is CMS’ request for information regarding whether the CPT coding monopoly hurts patient care. Specifically, the agency seeks input on these five questions:

Why it matters: The CY 2027 Medicare Physician Fee Schedule proposed rule could significantly affect independent practices through lower reimbursement, new payment policies, and evolving reporting requirements. To maintain financial stability, practices will need to optimize coding, billing, and documentation while preparing for continued shifts toward value-based care and care coordination.

What’s next: Read through the rule and submit comments by September 14. Then be on the lookout for a final rule in early November.

Details: CMS recently published the fiscal year 2027 ICD-10-CM diagnosis code update that includes 190 new codes, 30 deleted codes, and four revised codes—all effective on October 1, 2026. Among the changes? A significant restructuring of maternity care services, 17 new codes related to the toxic effect of cycloparaffins, expanded codes for plantar fasciitis, new codes for adult body mass index, more specific codes for gender identity and transitioning, and more.

Why it matters: ICD-10-CM updates matter because they directly affect clinical documentation, coding accuracy, claims processing, and reimbursement. If practices continue using deleted or outdated ICD-10-CM codes after the October 1, 2026, implementation date—or fail to report new codes when required—they could experience several operational and financial consequences. Even a small increase in rejected or denied claims can have a meaningful impact on cash flow.

What’s next: Update EHRs, billing software, superbills, and coding workflows before October 1, 2026. Also ensure physicians and staff understand the new documentation requirements needed to support the more specific diagnosis codes.

Tebra Take: Staying current with ICD-10-CM changes shouldn't mean a scramble every October. An EHR that keeps coding libraries updated and flags outdated codes before claims go out helps practices avoid denials tied to deleted or obsolete codes.

Details: ACA marketplace insurers blame the rising cost of health services, general economic inflation, and labor shortages for a projected 14% median premium increase in 2027, a recent analysis found. Of the insurers included in the analysis, none proposed decreasing premiums, and 20 insurers anticipated premium increases of more than 20%. Note that these filings are preliminary and may change during the rate review process. Rates for 2027 will be finalized in late summer.

Why it matters: Higher ACA Marketplace premiums could lead more patients to drop coverage, choose higher-deductible plans, or delay care due to out-of-pocket costs. As a result, practices may see more uninsured or underinsured patients, increases in bad debt and uncompensated care, and greater difficulty collecting patient balances. Higher premiums can also cause patients to postpone preventive care or treatment, potentially leading to more complex and costly health issues later.

What’s next: Prepare to help patients understand their financial responsibility, offer payment options when appropriate, and closely monitor the impact on patient volume, collections, and revenue.

Details: Earlier this month, the U.S. Senate voted 46-50 against a Democratic resolution that would have repealed CMS’s WISeR (Wasteful and Inappropriate Service Reduction) Model, a Medicare pilot that uses artificial intelligence and other technologies to support prior authorization decisions for certain traditional Medicare services in six states. Supporters of the repeal argued the program could delay medically necessary care and increase administrative burdens for physicians and patients, while opponents said the pilot is intended to reduce unnecessary services, fraud, and Medicare spending and should be allowed to continue while CMS evaluates its impact.

Why it matters: The WISeR model signals that AI-assisted prior authorization is likely to become a larger part of Medicare oversight, potentially increasing documentation and administrative requirements for affected services. Practices participating in the pilot states may need to submit more complete clinical documentation to demonstrate medical necessity and prepare for AI-supported reviews before certain services are approved. Even for physicians outside the pilot, the program could serve as a model for future Medicare utilization management policies if CMS determines it reduces inappropriate care without harming patient access.

What’s next: Ensure documentation, coding, and prior authorization workflows are robust enough to withstand greater scrutiny. Conduct periodic audits to identify documentation gaps, coding inconsistencies, and prior authorization trends before they result in denials or delays. Also provide ongoing education for clinicians and staff on medical necessity documentation and payer-specific requirements so the practice is prepared as AI-assisted utilization management becomes more common.

Details: On July 5, 2026, more than 150 leading healthcare organizations began participating in the CMS Innovation Center’s Advancing Chronic Care with Effective, Scalable Solutions (ACCESS) Model. The AMA recently published an article regarding what physicians need to know about this model that encourages the use of health technology to boost patient outcomes for prevalent chronic conditions. It’s all part of a larger CMS initiative to expand the use of digital health tools and technologies in Medicare. 

Why it matters: Practices that care for Medicare patients may have new opportunities to improve outcomes—and potentially qualify for additional financial incentives—by using tools such as remote monitoring, digital care management platforms, and data-driven population health technologies.

What’s next: Evaluate whether current technology, workflows, and care management programs are ready to support CMS’s growing emphasis on digitally enabled chronic care. This includes assessing remote monitoring capabilities, care coordination processes, and EHR interoperability while identifying opportunities to participate in Medicare innovation and value-based care models. Even practices that don’t join the ACCESS Model should monitor its progress, as successful strategies and technology requirements could shape future Medicare payment policies and become more broadly adopted.

Details: A new commentary published in npj Digital Medicine argues that while ambient AI documentation tools can reduce physician documentation time and burnout, practices must ensure they deploy these technologies in ways that protect patient privacy, autonomy, and trust. The authors recommend clear patient communication, meaningful consent, strong data governance, and transparency about how AI captures, stores, and uses clinical conversations.

Why it matters: Independent practices are increasingly adopting ambient AI scribes to reduce administrative burden and improve physician satisfaction. However, patients may not understand that AI is recording and processing conversations during their visit. The article suggests that practices that explain the technology clearly and give patients meaningful choices about its use are more likely to preserve trust while realizing the productivity benefits of AI.

What’s next: Be transparent about when and how ambient AI is used, provide patients with meaningful information and choices, safeguard privacy through strong data governance, and review AI-generated documentation for accuracy.

Tebra Take: Ambient AI can help practices reduce documentation time and give physicians more time to focus on patients—but technology alone isn't enough. Successful implementation requires clear patient communication, strong privacy safeguards, and physician oversight of AI-generated documentation.

Details: A new report from the Government Accountability Office (GAO) highlights the importance of AI tools to assist with documentation and medical coding. However, the report also points out that these emerging technologies can cross multiple agencies’ jurisdictions, thereby presenting oversight and regulation challenges. Key questions for stakeholders include:

Why it matters: The GAO report signals that federal agencies are still determining how to oversee these tools, meaning future guidance, audits, documentation requirements, and reimbursement policies are likely to evolve.

What’s next: Establish strong AI governance now—including physician review of AI-generated work, vendor due diligence, and ongoing performance monitoring—to be better positioned to maintain compliance, reduce reimbursement risk, and adapt to changing regulatory expectations.

Details: A recent study found that patients feel AI can offer greater technical information, analytical capability, and efficiency, but it cannot replicate the human compassion and empathy that are at the heart of good primary care. Patients want physicians to remain in control of diagnosis and treatment, explain when AI is being used, and protect their personal health information.

Why it matters: As independent practices adopt AI tools for documentation, clinical decision support, and other workflows, patient trust will become just as important as the technology itself.

What’s next: Build trust by communicating openly about AI, maintaining strong privacy safeguards, and using the technology to enhance — not replace — the patient-physician relationship.

Details: A new Yale School of Medicine “secret shopper” study found that obtaining a GLP-1 prescription for weight loss through online telehealth platforms is often remarkably fast and requires minimal clinical oversight. Researchers posed as a patient seeking treatment and found that 45 of 49 online platforms (91.8%) issued a prescription, with only about one-third requiring any direct interaction with a clinician before prescribing. Some compounded GLP-1 prescriptions were approved in five minutes or less, often based solely on an online questionnaire. Many platforms also prescribed compounded GLP-1 medications, which are not FDA-approved products and may have additional quality and safety considerations.

Why it matters: Limited patient evaluation and clinician engagement could increase the risk of inappropriate prescribing, missed contraindications, adverse events, and financial harm, underscoring the need for stronger oversight and more comprehensive clinical assessment.

What’s next: Use this study as an opportunity to reinforce the value of comprehensive, physician-led obesity care. Rather than focusing solely on prescribing GLP-1 medications, practices should conduct thorough patient evaluations, educate patients about appropriate use and potential risks, monitor treatment over time, and discuss the differences between FDA-approved and compounded products. By providing ongoing clinical oversight and personalized care, physicians can improve patient safety, support better outcomes, and distinguish their practice from direct-to-consumer telehealth services that may offer limited clinician involvement.

Details: A recent CNET report describes how generative AI tools such as ChatGPT can help patients review complex medical bills by identifying potential billing errors, duplicate charges, incorrect CPT codes, upcoding, and discrepancies between charges and expected reimbursement rates.

Why it matters: As patients increasingly use generative AI to review and question their medical bills, independent practices should expect more inquiries about coding, charges, and insurance payments. This growing scrutiny makes accurate coding, clear billing practices, and transparent patient communication even more important. Practices that can explain charges, promptly correct errors, and provide easy-to-understand billing information will be better positioned to build patient trust, reduce billing disputes, and improve the overall financial experience.

What’s next: Prepare for a future in which patients increasingly use AI to scrutinize their medical bills before paying them. Physicians and practice leaders should work with their billing teams to strengthen coding accuracy, ensure charge capture and documentation support billed services, and make it easier for patients to ask questions about their bills. Practices should also consider providing clearer billing explanations, training staff to address AI-generated billing questions, and monitoring recurring patient concerns to identify workflow or coding issues that can be corrected proactively.

Details: A recent KFF Health News report highlights growing concern among physicians about their potential role in documenting whether Medicaid patients qualify as “medically frail” and therefore exempt from new Medicaid work requirements that begin rolling out in 2027. Many clinicians worry that determining whether a patient’s medical condition prevents them from meeting work requirements falls outside the traditional scope of medical care and could create additional administrative burden, inconsistent documentation standards, and difficult conversations with patients. The report also notes that states are still developing implementation processes, meaning physicians may face varying documentation requests depending on where they practice.

Why it matters: If patients lose Medicaid because they cannot navigate the exemption process or obtain timely documentation, practices could see more uninsured patients, higher uncompensated care, increased appointment cancellations, and disruptions in continuity of care.

What’s next: Prepare for an increase in administrative requests related to Medicaid eligibility, including completing forms or providing clinical documentation to support medical frailty exemptions. Practices may also need to develop standardized workflows, educate clinicians and staff about state-specific requirements, and balance these new responsibilities with already significant documentation demands.

Tebra Take: As Medicaid work requirements roll out, proactive eligibility and patient communication strategies will become increasingly important. Technology that automates insurance eligibility verification, streamlines patient outreach, and documents coverage-related interactions can help practices reduce administrative burden, minimize coverage disruptions, and support continuity of care.

Whether preparing for Medicare payment changes, implementing new diagnosis codes, strengthening AI governance, or helping patients navigate affordability and coverage challenges, proactive planning will be essential to maintaining both financial stability and high-quality care. By staying informed, refining workflows, and adopting technology thoughtfully, practices can reduce administrative burden, improve the patient experience, and position themselves for long-term success in an increasingly complex healthcare environment.

That's July's Vital Signs. The thread running through this month: regulatory change and technology oversight are converging on the same pressure point — practices are being asked to update systems, tighten documentation, and build AI governance while absorbing proposed payment cuts and rising patient costs. Coding accuracy, prior authorization readiness, and AI transparency aren't back-office details anymore; they're core to whether a practice stays compliant, gets paid, and keeps patient trust.