Final Medicare Physician Fee Schedule Rule Displeases Doc Groups

It “does not go far enough” to address the last two decades of payment cuts, they say

https://www.medpagetoday.com/publichealthpolicy/medicare/118333

Physician groups were generally dissatisfied with the final 2026 Medicare Physician Fee Schedule rule released late last week by the Centers for Medicare & Medicaid Services (CMS).

“Decades of repeated Medicare cuts and rising costs have created an unsustainable situation that is pushing practices, many of whom are small businesses, to the brink of closure and threatening patients’ access to care,” William Harvey, MD, MSc, president of the American College of Rheumatology, said in a statement. “This final rule from CMS does not go far enough to address the 33% decline in reimbursement physicians have faced since 2001. Congress can no longer ignore the damage these chronic underpayments are causing.”

“While we appreciate the modest payment increase finalized by CMS for 2026, this temporary relief does not address the fundamental structural problems plaguing Medicare physician reimbursement,” Jerry Penso, MD, MBA, president and CEO of the American Medical Group Association (AMGA), said in a statement. “The conversion factor increase, driven by a one-time congressional intervention, provides a short-term reprieve, but the underlying erosion of physician payment continues to threaten access to care and the viability of high-value, team-based medicine.”

The new fee schedule gives doctors treating Medicare patients a 3.77% pay bump if they participate in alternative payment models (APMs), and a 3.26% increase for those not participating in APMs. The bulk of those percentages comes from a 2.5% 1-year increase Congress passed in its “One Big Beautiful Bill” in July, as well as a 0.49% adjustment CMS said was necessary to account for proposed changes in work relative value units (RVUs) for certain services. Without those additions, the conversion factor increases would be 0.75% for physicians participating in APMs and 0.25% for those not participating in them.

ATA Action, an advocacy group for telemedicine providers, said in a statement that although it was encouraged by the agency’s inclusion of provisions that expand telemedicine coverage and streamline processes related to it, “we have ongoing concerns that the issue of provider location and home address reporting has not yet been fully resolved, a change that could significantly impact providers across the country when the current flexibility expires on December 31.”

On the other hand, said ATA Action executive director Kyle Zebley, “CMS did finalize an important provision that was not included in the proposed rule that we advocated for, which permanently allows teaching physicians to supervise residents virtually, when the patient, resident, and supervising clinician are in separate locations, in all teaching settings.”

In contrast to the specialists’ groups, the primary care groups sounded more upbeat. The American Academy of Family Physicians (AAFP) said in a statement that it was “pleased by several provisions in the 2026 Medicare Physician Fee Schedule that strengthen the healthcare system and prioritize primary care.”

The provisions cited by AAFP include broadening the use of the G2211 add-on code, which will make it more feasible for doctors to provide care at home, and the introduction of optional add-on codes to support behavioral health integration services.

Unlike the AMGA, the AAFP was positive about the overall payment increases of 3.77% and 3.26%, depending on whether or not the physician is in an APM. “These updates reflect CMS’ commitment to supporting primary care,” the organization said. “However, most of the increases for 2026 are temporary adjustments … which will expire at the end of 2026. To sustain this progress, we urge Congress to take action to prevent another payment cliff, which would leave practices struggling to keep pace with inflation despite the promising direction set by CMS.”

The final rule also included a new “efficiency adjustment” — a 2.5% cut for clinical services that are not time-based — to reflect its opposition to the American Medical Association’s (AMA) longstanding method for recommending physician reimbursement rates using RVUs that are partly based on the amount of time it takes to provide a particular service.

“Research has demonstrated that the time assumptions built into the valuation of many [Physician Fee Schedule] services are … very likely overinflated,” CMS said in a fact sheet about the final rule. The AMA said the efficiency adjustment would reduce payment for 7,000 physician services, amounting to some 95% of all those provided by physicians.

The efficiency adjustment received mixed reviews. “Physicians are already stretched thin by increasingly complex patients and the escalating costs of running a practice,” Qihui “Jim” Zhai, MD, president of the College of American Pathologists, said in a statement. “These reductions to physician work ignore the realities of modern medicine, including rising patient complexity and evolving technologies that demand more from physicians, not less. A one-size-fits-all policy is unfairly targeting pathologists and other specialists.”

The American College of Emergency Physicians also expressed unhappiness. “Unfortunately, the efficiency adjustment for non-time-based services as finalized is a flawed and overly broad policy that fails to differentiate between services that can achieve further efficiencies and those that cannot, as well as those that have already been re-evaluated through existing processes recently,” the group said in a statement, adding that under the new schedule, “independent groups, especially smaller practices, will see shrinking reimbursement while costs remain the same — contracts become financially unsustainable, consolidation accelerates … and emergency department coverage and timely patient access to lifesaving care are put at risk.”

But the American College of Physicians (ACP) disagreed. “ACP is glad to see that the fee schedule finalized the introduction of an efficiency adjustment that will help account for how clinical practices and resource utilization patterns evolve and better align payments with those changes,” ACP President Jason Goldman, MD, said in a statement. He added that the ACP “appreciates CMS’s decision to exclude evaluation and management (E/M) services from the efficiency adjustment. The work associated with E/M services has become increasingly complex and intensive due to the need for comprehensive, person-centered, and relationship-based care.”

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