CMS Releases Physician Fee Schedule Rule for 2026 that Includes Policy Proposals that Will Cut Payment

On July 14, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule (MPFS) proposed rule and fact sheet for CY 2026 (CMS-1832-P). This rule updates payment policies and payment rates for Part B services furnished under the MPFS, as well as makes changes to the Quality Payment Program (QPP). The rule in its entirety and the addenda, including Addendum B, which lists the proposed RVUs for each CPT® code can be found here. Comments are due September 12.

CMS provides information on several significant policy changes that align with the Trump administration’s efforts to curb fraud, waste, and abuse. Some of the changes include new payment policy to adjust work RVUs downward to account for efficiency gains over time and creation of policy to cut practice expenses amounts for services performed in the facility setting.

The full summary can be found here and the following are highlights of major policy updates included in the rule.

2026 Conversion Factor

2026 marks the first year that there are two separate conversion factors: one for practitioners working in a qualifying advanced APM and the other for those not participating in a qualifying advanced APM. The conversion factor for the former will increase to $33.59, an increase of 3.83%, and the latter to $33.42, an increase of 3.62%. These increases reflect the 2.5% increase to the 2026 conversion factor included in the reconciliation package recently adopted by Congress.

Proposed Efficiency Adjustment

For the first time, CMS proposes a -2.5% efficiency adjustment to work RVUs and intraservice time for most non-time-based services under the Medicare Physician Fee Schedule (MPFS). This would apply to procedures, radiology services, and diagnostic tests, but exclude time-based services like evaluation and management visits, behavioral health, and maternity care. CMS cites concerns with the accuracy of AMA RUC survey data, including low response rates and the perceived failure to capture time savings that may accrue stemming from experience gained performing a procedure over time or when using technology.

The efficiency adjustment is tied to productivity gains in the Medicare Economic Index and will be updated every three years. CMS is also seeking comment on shifting toward empirical data sources, such as operative time stamps, to better align payments with actual resource use.

Updates to Practice Expense Methodology

The agency proposes a methodological change in the formula used to pay for physician services provided in the facility setting. As outlined in the rule, the agency will reduce by half the portion of facility practice expense (PE) RVUs allocated to non-facility PE RVUs. The proposed change creates a site of service payment differential, by shifting money from payment amounts for facility-based physician services to the payment amounts for office-based services.

Payment for Global Surgical Packages

CMS establishes valuation and payment for global surgical packages that include a surgical procedure defined by the HCPCS code as well as related services, such as pre- and immediate post-operative care on the day of the procedure, care related to complications, discharge services, and post-operative evaluation and management (E/M) services provided during the global periods. In this rule, CMS continues to explore options for accurately paying for services captured under the global payment policy as the agency believes that many post-operative visits considered during the valuation of global surgical packages are not actually provided to Medicare beneficiaries.