The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Physician Fee Schedule, introducing several changes that will affect physician payments and telehealth services.
The conversion factor, which determines payment rates under Medicare’s fee schedule, will see an increase. For physicians not participating in an advanced alternative payment model (A-APM), the conversion factor will rise from $32.34 to $33.40. Those participating in an A-APM will see a slightly higher increase to $33.56. These adjustments reflect budget neutrality requirements, efficiency considerations, and a one-year 2.5% update approved by Congress to address inflation.
Policy groups have voiced concerns about the adequacy of these updates. The American Medical Association (AMA) highlighted MedPAC’s warnings in its comments to Congress: “In their June 2025 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the growing gap between physicians’ input costs and Medicare payment, warning: ‘[t]his larger gap could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat, stop participating in Medicare entirely, or vertically consolidate with hospitals, which could increase spending for beneficiaries and the Medicare program.’” MedPAC has recommended replacing current law updates with annual increases tied to the Medicare Economic Index (MEI). The 2025 Medicare Trustees Report also warned that patient access could become a significant issue if current trends continue.
The Florida Medical Association (FMA) stated its commitment to advocating for increased Medicare payments for physicians: “At every available opportunity, the FMA will continue advocating for our long-standing goal of increasing Medicare payments for physicians.”
Telehealth policies are also changing as some flexibilities have expired during the ongoing federal government shutdown, except those related to mental health and substance abuse disorders. While CMS cannot restore all expired flexibilities through rulemaking alone, it has removed frequency limits on telehealth services provided in hospitals and skilled nursing facilities and made virtual direct supervision permanent for most services requiring supervision.
Regarding quality reporting under the Merit-based Incentive Payment System (MIPS), CMS did not raise the performance threshold required to avoid penalties in Performance Year 2026. This decision aligns with FMA policy calling for repeal of MIPS penalties due to questions about their effectiveness in improving patient care outcomes. As a result of this unchanged threshold, fewer physicians are expected to face penalties when results are assessed in Performance Year 2028.
Further details can be found on CMS’s official press release and related fact sheets:
– CMS Press Release
– Physician Payment Schedule Fact Sheet
– Medicare Shared Savings Program Fact Sheet
