The Centers for Medicare and Medicaid Services has released the calendar year 2026 Medicare Physician Fee Schedule Proposed Rule aimed at payment policies and other outpatient services covered under Medicare Part B. The WSMA is currently working to review these proposals. Stakeholders have until Sept. 12 to provide comments on the proposed rule. Proposed changes can be reviewed in detail at the proposed rule webpage and associated fact sheet. The American Medical Association’s proposed rule summary can be accessed here.

Notable provisions include:

• CMS proposes four conversion factors. The conversion factors reflect two different small permanent updates to the baseline beginning Jan. 1, 2026, as required under the Medicare Access and CHIP Reauthorization Act of 2015. Under MACRA, physicians who are qualifying participants in advanced alternative payment models will receive a slightly higher conversion factor update and, thus, slightly higher Medicare payments in 2026 compared to physicians who are not qualifying participants. Each conversion factor also reflects the temporary, one-year 2.5% update enacted in H.R. 1 recently signed into law. These conversion factors are outlined in a table starting on page 1 of the AMA’s summary.
• CMS is proposing its first-ever efficiency adjustment. The adjustment would apply to the work Relative Value Unit and corresponding intraservice portion of physician time of non-time-based services. This would apply to all codes except time-based codes, such as evaluation and management services, care management services, behavioral health services, and services on the Medicare telehealth list. Specialties that rely more heavily on time-based codes, such as family medicine and psychiatry, could see small RVU increases, while procedural or diagnostic specialties, such as radiology and some surgical fields, may see slight reductions. CMS anticipates that most specialties would see no more than a 1% change in total RVUs.
• CMS proposes a reduction in indirect practice expense RVUs for all services provided in the facility setting. The mechanism for the reduction is highly technical as CMS would reduce the portion of facility practice expense RVUs allocated based on work RVUs to half the amount allocated to non-facility practice expense RVUs. CMS cites AMA and MedPAC studies showing the growing number of employed physicians and physicians in hospital-owned practices and the shrinking number of private practices as its rationale for this proposal. CMS believes that physicians who provide services in the facility no longer maintain a separate office and receive “duplicative payments” under the MPFS and the facility fees under the outpatient or the ASC payment schedules. While CMS proposes no exceptions, it seeks comment on the impact of this proposal on maternity care.

With questions and comments on the proposed fee schedule, please contact WSMA Director of Policy Jeb Shepard.