Introduced
August 28, 2025
January 1, 2026
CY 2026 Physician Fee Schedule: Medicare and Medicaid Programs
Policy Type: Rule

A legally binding directive issued by a federal agency to implement, interpret, or enforce laws passed by Congress. Rules go through a formal rulemaking process, including public notice and comment, before taking effect.
Who It Impacts: Businesses, organizations, and individuals subject to federal agency oversight. For example, a new environmental regulation could impact manufacturing companies, or a healthcare rule could affect providers and insurers.
Who Is Not Impacted: People or entities not subject to the agency’s jurisdiction. For example, a rule by the Environmental Protection Agency (EPA) regulating industrial emissions would not directly impact a restaurant owner unless they operate in an affected industry.
Last Updated
January 1, 2026
Policy Type
CMS released the CY2026 Physician Fee Schedule (PFS) proposed rule on July 14, 2025. It proposes four conversion factors and would overall increase physician payments for the first time in six years. However, new efficiency adjustments would reduce the code values for thousands of non-timed codes (with exceptions for evaluation, care management, behavioral health, and maternity codes) and changes to practice expense allocations for clinicians working in facilities will offset the conversion factor increases and lead to lower reimbursement for some physicians. Other proposals impact telehealth flexibilities, specialty care models, the Medicare Shared Savings Program (MSSP), and the Quality Payment Program (QPP). In terms of telehealth, it proposes that federally quality health centers (FQHCs) and rural health clinics can bill for telehealth through 2026, but also proposes to not extend billing flexibility for virtually present teaching physicians. CMS proposes to mandate the Ambulatory Specialty Model (ASM) which intends to improve chronic disease management for beneficiaries with heart failure and low back pain. ASM would hold individual specialists responsible for performance on targets for quality, cost, care coordination, and use of electronic health records. CMS also proposes optional add-on codes for Advanced Primary Care services which would enable practitioners to bill complementary behavioral health integration and psychiatric Collaborative Care Model services. The proposals for MSSP which change quality performance standards and requirements for the 477 participating ACOs, including: limiting the time an ACO is able to participate in the BASIC model, modifying beneficiary-related eligibility requirements, removing the health equity adjustment scoring for ACOs, removing the Screening for Social Drivers of Health measure, and allowing for web-based administration of Consumer Assessment of Healthcare Providers and Systems (CAHPS) surveys. In terms of the QPP, strategies are proposed to simplify and transform the Merit-based Incentive Payment System. Five new measures, the removal of 10 measures, and significant changes to 32 proposed measures are proposed for the APP Plus quality measure set. Additionally, a new improvement activity section for “Advancing Health and Wellness” is suggested and the “Achieving Health Equity” section eliminated.
Healthcare Delivery, Services & Quality