CMS Finalizes 2026 Physician Fee Schedule With Two-Tier Rates and Efficiency Cut

Overview

• Medicare will use separate conversion factors in 2026: $33.57 for qualifying Advanced APM clinicians and $33.40 for others, reflecting the one-year 2.5% statutory update and finalized RVU changes.
• CMS finalized a −2.5% efficiency adjustment to work RVUs for most non‑time‑based services using a five‑year MEI lookback, with exemptions for time‑based codes such as evaluation and management, behavioral health, care management, telehealth, and maternity global services.
• The agency will draw on auditable OPPS hospital data to help set rates for certain technical services, including radiation therapy and some remote monitoring, and it will streamline how services are added to the Medicare telehealth list.
• Skin substitute products will be paid as incident‑to supplies in 2026 with categorization aligned to FDA regulatory status, a shift aimed at curbing rapid spending growth.
• The rule updates MSSP eligibility and reconciliation to allow more flexibility around the 5,000‑beneficiary minimum during benchmark years and establishes a mandatory Ambulatory Specialty Model launching January 2027 for heart failure and low back pain.