CMS issues CY 2026 physician fee schedule proposed rule
The Centers for Medicare & Medicaid Services 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 QP conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-QP 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 QP and non-QP 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.
Read the full story here.
CMS will accept comments on the proposed rule through Sept. 12.
American Hospital Association (AHA) members can read the AHA Regulatory Advisory with more details and the impacts, here.
CMS proposes increasing Medicare hospital outpatient department payment rates by 2.4% in CY 2026
The Centers for Medicare & Medicaid Services July 15 issued a proposed rule that would increase Medicare hospital outpatient prospective payment system rates by a net 2.4% in calendar year 2026 compared to 2025. This includes a proposed 3.2% market basket update, offset by a 0.8 percentage point cut for productivity.
In a statement shared with the media, Ashley Thompson, AHA senior vice president of public policy analysis and development, said the AHA was disappointed with the “inadequate” payment update “as many hospitals — especially those in rural and underserved communities — operate under challenging financial pressures.”
CMS proposes to pay for drug administration services furnished in grandfathered off-campus hospital outpatient departments at the site-neutral rate of 40% of the OPPS rate. The agency estimates this policy would cut OPPS spending by $280 million in CY 2026. It also requests comments on whether it should expand site-neutral payment to clinic visit services provided in on-campus HOPDs.
The agency also proposes phasing out the inpatient only (IPO) list over a 3-year period, beginning with removing 285 mostly musculoskeletal procedures for CY 2026. The IPO list details procedures that Medicare deems safe only in an inpatient setting.
“We oppose the proposal to expand ‘site-neutral’ cuts and eliminate the inpatient-only list, as both policies fail to account for the real and crucial differences between hospital outpatient departments and other sites of care,” Thompson said. “Studies show hospital outpatient departments are more likely to serve Medicare patients who are sicker, more clinically complex, and more likely to be disabled or living in poorer, rural communities than patients treated in independent physician offices.”
More information on these proposals can be found here.
