CMS issues CY 2026 physician fee schedule proposed rule
The Centers for Medicare & Medicaid Services July 14 released its calendar year 2026 proposed rule for the physician fee schedule. As required by law, beginning in CY 2026, CMS proposes to implement two separate conversion factors: one for qualifying alternative payment model participants and one for physicians and practitioners who are not qualified participants. The rule would increase the APM conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM and non-factors, respectively, another update of 2.5% as required under the One Big Beautiful Bill Act, and 0.55% that CMS states is necessary to account for proposed changes in work relative value units.
CMS also proposes that, for CY 2026, it would make an efficiency adjustment to certain work RVUs of -2.5%. In addition, the agency is proposing significant updates to its practice expense methodology that it says will recognize greater indirect costs for practitioners in office-based settings compared to facility settings. It also proposes to utilize data from auditable, routinely updated hospital data to set relative rates and inform cost assumptions for some technical services paid under PFS. Specifically, for CY 2026, it proposes to use this data in setting rates for radiation treatment services, and for some remote monitoring services.
In addition, CMS proposes to permanently adopt its waiver defining direct supervision to include virtual presence via audio/video real-time communications technology. It also proposes to extend its waiver allowing federally qualified health centers and rural health clinics to bill for telehealth services through 2026. However, it does not propose to extend the waiver allowing teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings.
CMS also proposes a new claims-based methodology to remove units of drugs purchased under the 340B Drug Pricing Program for the purposes of calculating Medicare drug inflation rebates. The agency also proposes to create a 340B claims data repository allowing voluntary data submission by 340B providers to potentially use for the same purpose.
CMS also proposes to implement the Ambulatory Specialty Model, a mandatory payment model focused on specialty care for beneficiaries with heart failure and low back pain. It states that the model would include specialists who frequently treat low back pain or heart failure and aim to enhance the quality of care by improving upstream chronic disease management.
For the Quality Payment Program, CMS proposes to add a new Advancing Health and Wellness subcategory within the Improvement Activities category. The agency also proposes several updates to simplify and transform the Merit-based Incentive Payment System to facilitate a transition to mandatory participation in the MIPS Value Pathways in the future. CMS solicits comments on several topics, including ways to hone MVP coding and potential new and modified measures for the MIPS.
CMS also includes several proposals regarding the Medicare Shared Savings Program, including modifications to the eligibility and financial reconciliation requirements in order to increase the flexibility in the number of assigned beneficiaries in benchmark years. Among proposed changes to the quality performance standards and requirements, CMS would remove the health equity adjustment to the ACO quality score; expand the survey mode for the Consumer Assessment of Healthcare Providers and Systems survey to include web-based survey administration beginning in 2027; remove the Screening for Social Drivers of Health measure; and expand the Extreme and Uncontrollable Circumstances Exception to include cyberattacks.
CMS will accept comments on the proposed rule through Sept. 12. AHA members will receive a Regulatory Advisory with more details.