2026 Medicare physician payment schedule
The AMA has developed a detailed summary (PDF) of the 2026 Medicare Physician Payment Schedule final rule. The AMA has also developed a new RUC infographic (PDF) and a two-pager (PDF) to explain the problematic efficiency adjustment and practice expense payment policies in the 2026 Medicare physician payment schedule final rule. CMS provided impact analyses (PDF) that relate to the efficiency adjustment and practice expense adjustment. Notably, the impact analyses do not include the 2026 Medicare conversion factor (CF) increases. The first chart includes all physicians and other qualified health care professionals, even low volume practitioners; the second chart is weighted by relative value units.
All physicians will benefit from the positive conversion factor updates for 2026, including a 3.77 percent increase for advanced alternative payment model (APM) qualifying participants (QPs) and a 3.26 percent increase for all other physicians. The conversion factor increases reflect:
- A temporary 2.5 percent pay bump passed by Congress in H.R. 1;
- Small, permanent updates to the baseline as required under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2025, including a 0.75 percent increase for QPs and a 0.25 percent increase for all other physicians; and
- A positive 0.49 percent budget neutrality adjustment.
The Social Security Act (the Act) requires the Centers for Medicare & Medicaid Services (CMS) to establish payments under the Medicare Physician Payment Schedule based on national uniform relative value units (RVUs) that account for the relative resources used in furnishing a service. The Act requires that RVUs be established for 3 categories of resources:
- Physician work
- Practice expense (PE)
- Malpractice (MP) expense
CMS is also required to establish by regulation each year’s payment amounts for all physician services paid under the Medicare Physician Payment Schedule, incorporating geographic adjustments to reflect the variations in the costs of furnishing services in different geographic areas.
The Medicare Physician Payment Schedule’s impact on a physician’s Medicare payments is primarily a function of 3 key factors:
- The resource-based relative value scale (RBRVS)
- The geographic practice cost indexes (GPCI)
- The monetary conversion factor
Calculating the payment schedule
The Omnibus Budget Reconciliation Act of 1989 (OBRA 89) geographic adjustment provision requires all 3 components of the relative value for a service—physician work relative value units (RVUs), practice expense RVUs and professional liability insurance (PLI) RVUs—to be adjusted by the corresponding GPCI for the locality. In effect, this provision increases the number of components in the payment schedule from 3 to the following 6:
- Physician work RVUs
- Physician work GPCI
- Practice expense RVUs
- Practice expense GPCI
- PLI RVUs
- PLI GPCI
The formula for calculating payment schedule amounts entails adjusting RVUs, which correspond to services, by the GPCIs, which correspond to payment localities.
Calculating total RVU
Work RVU* x Work GPCI** + Practice Expense (PE) RVU x PE GPCI + Malpractice (PLI) RVU x PLI GPCI = Total RVU
Additional background
View the History of Medicare conversion factors (PDF).
View the History of Budget Neutrality (PDF).
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