The nearly 2,000-page proposed Medicare physician payment rule from the Centers for Medicare & Medicaid Services (CMS) for 2026 includes faulty proposed changes to how physicians and other health professionals are paid for Medicare services—changes that could negatively affect the quality, accessibility and sustainability of health care for millions of older-adult patients.
Physician pay, after adjusting for practice-cost inflation, has plummeted since 2001 and that is why the AMA is leading the charge to reform the Medicare payment system.
The AMA’s expert staff has developed a detailed summary of proposed 2026 Medicare Physician Fee Schedule (PDF) and is highlighting the problematic efficiency-adjustment and practice-expense payment proposals (PDF) in the CMS rule.
Here is what doctors need to know about these Medicare payment proposals and how they could affect physician practices and patient care unless they are modified substantially in the final regulation.
Efficiency adjustment
In this area, CMS is proposing a 2.5% cut in work relative-value units (RVUs, which measure a physician’s time, technical skill, mental effort, decision-making and stress) and physician intraservice time for most services.
This arbitrary reduction would affect more than 7,000 physician services—that is, 95% of the services that doctors provide. As the AMA’s analysis notes, the cut is based on an assumption of greater efficiency and less time involved in each service—an assumption that is not grounded in new data or physician input. Even brand-new services are included in this cut, and CMS proposes to continue imposing additional cuts every three years.
This proposal is not supported by empirical surgical time data. For a study published in the Journal of American College of Surgeons, researchers analyzed intraservice times from 1.7 million surgeries across 249 CPT codes and 11 physician specialties. They found that overall operative times actually rose by 3.1% from 2019 to 2023, with 90% of CPT codes having longer or similar operative times in 2023 compared with 2019.
This proposed CMS efficiency adjustment could intensify barriers to care, meaning longer wait times and challenges in patient access to care.
Indirect practice-expense adjustment
CMS also proposes a reduction in practice-expense RVUs (which are the costs of running a practice, such as staff, equipment, supplies, utilities and overhead) used in physician payment for services performed in facilities such as hospitals or ambulatory surgical centers.
The problem is that the CMS proposal does not accurately reflect physician-resource costs incurred by practices in the facility setting, and it creates dramatic, unsustainable impacts to many individual physicians and other health professionals.
This adjustment could threaten physician private practices, reduce competition by encouraging further health care consolidation, and it overlooks administrative costs incurred by physicians when they provide services in facility settings. The bottom line is that physician payment for services performed in a facility will drop overall by 7%.
Many specialties affected
In its analysis, the AMA has estimated that a range of physician specialties and the patients they care for will be affected by these CMS proposals.
The specialties facing notable cuts include:
- 80% of infectious-disease physicians, who face cuts of 5% or more.
- Over 56% of internists also face cuts of 5% or more.
- 49% of ophthalmologists.
- 37% of oncologists, with cuts of 10–20%.
- 37% of ob-gyns.
There are other paths to pursue. Instead of applying these extremely disruptive, across-the-board policies, CMS should work with physicians and other health professionals to address shared policy objectives by reviewing efficiency gains or practice-expense adjustments for individual services.
“The established payment policies and processes are grounded in real-world clinical experience,” says the AMA explainer. “It is imperative that practicing physicians and other health care professionals, those who provide services to Medicare patients, continue to advise Medicare payment policy based on their experience. Their valuable expertise makes them an indispensable source of survey information that ensures fair, accurate and consistent payment and supports innovation and high-quality care.”
CMS is accepting comments on its proposed rule until Sept. 12.
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