CMS finalizes 2026 Medicare physician payment updates
On Oct. 31, the Centers for Medicare & Medicaid Services (CMS) released the final 2026 Medicare physician fee schedule (MPFS) rule. After a 2025 reduction, the AMA is pleased CMS implemented positive conversion factor updates for 2026, including a 3.77% increase for advanced alternative payment model qualifying participants and a 3.26% increase for all other physicians. These increases are due in part to a temporary 2.5% pay bump passed by Congress in H.R. 1. The AMA continues advocating for permanent updates that reflect rising costs.
The 2026 conversion factors are also affected by a positive 0.49% budget neutrality adjustment resulting from misvalued code changes and a -2.5% “efficiency adjustment.” Although AMA comments (PDF) raised several questions about the efficiency adjustment and recommended alternative approaches to achieve CMS’ objectives, the agency will apply the negative adjustment to work relative value units (RVUs) and the corresponding intra-service portion of physician time of existing, non-time-based services that CMS believes accrue efficiencies over time.
The AMA is disappointed that CMS did not use the Physician Practice Information (PPI) Survey information. CMS states that they intend to work with interested parties, including the AMA, to understand whether and how such data should be used in MPFS rate setting in future rulemaking. Instead, CMS finalized its proposed modification to the indirect practice expense methodology, redistributing indirect practice costs from facility-based services to non-facility-based services. This change in practice expense methodology, only recognizing 50% of the physician's work of facility-based services in the indirect cost method, results in a 7% payment decrease for facility-based physician services while non-facility-based payment to physicians will increase by 4%.
The AMA is pleased that CMS accepted 91% of the AMA/Specialty Society RVS Update Committee (RUC)’s recommendations.
