Tag: physician fee schedule

CMS Releases CY 2026 Physician Fee Schedule Final Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a final rule to update the physician fee schedule for calendar year (CY) 2026.

Highlights of the final rule include:

  • Implementing the one-time 2.5% statutory increase included in H.R. 1.
  • Establishing two separate conversion factors: one for qualifying alternative payment model participants (QP) and another for non-qualifying physicians and practitioners.
    • The QP conversion factor would increase by 3.8% to $33.58.
    • The non-QP conversion factor would increase by 3.3% to $33.40.
  • Modifying several telehealth waivers, including:
    • Permanently removing the frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations.
    • Permanently adopting a definition of direct supervision to include virtual presence via audio/video real-time communications technology.
    • Permanently allow teaching physicians to have a virtual presence for services involving residents across all training locations when the service is performed virtually.
    • Extending the ability for federally qualified health centers and rural health clinics to bill telehealth services through Dec. 31, 2026.
  • Enhancing integration of behavioral health into primary care by:
    • Clarifying that marriage and family therapists, and mental health counselors, can bill Medicare directly for community health integration and principal illness navigation services.
    • Creating add-on codes for advanced primary care management services that complement previously established Behavioral Health Integration or psychiatric Collaborative Care Model services.
    • Retaining the Healthcare Common Procedure Coding System code that describes social determinants of health risk assessment and revising its descriptor to refer to “upstream drivers” of health rather than “social determinants.”
  • Creating a new claims-based methodology to remove units of drugs purchased under the 340B program for purposes of calculating Medicare drug inflation rebates starting Jan. 1, 2026. The claims-based methodology uses existing data files for these linkages and does not require 340B-covered entities to submit any additional data. The CMS also finalized its proposal to create a 340B claims data repository, allowing voluntary data submission by 340B providers for potential use in the same purpose.
  • Implementing the Ambulatory Specialty Model, a mandatory alternative payment model within selected core-based statistical areas, focused on specialists who care for beneficiaries with heart failure and low back pain, to begin Jan. 1, 2027, and run for five years through Dec. 31, 2031.
  • Establishing a merit-based incentive payment system (MIPS) performance threshold of 75 points for the 2026 performance period through the 2028 performance period, while also adopting six new MIPS Value Pathways (MVPs) and modifying performance categories under the Quality Payment Program. The new MVPs are for:
    • Diagnostic radiology
    • Interventional radiology
    • Neuropsychology
    • Pathology
    • Podiatry
    • Vascular surgery

The MHA will provide an updated impact analysis in the coming weeks. Members with questions should contact Vickie Kunz at the MHA.

CMS Releases CY 26 PFS Proposed Rule

Member News

The Centers for Medicare & Medicaid Services (CMS) recently released a proposed rule to update the physician fee schedule (PFS) for calendar year (CY) 2026.

Highlights of the proposal include:

  • Implementing the one-time 2.5% statutory increase included in the One Big Beautiful Bill Act.
  • Establishing two separate conversion factors: one for qualifying alternative payment model participants (QP) and another for non-qualifying physicians and practitioners.
    • The QP conversion factor would increase by 3.8% to $33.59.
    • The non-QP conversion factor would increase by 3.6% to $33.42.
  • Modifying several telehealth waivers, including:
    • Permanently removing the frequency limitations for subsequent inpatient visits, nursing facility visits and critical care consultations.
    • Permanently adopting a definition of direct supervision to include virtual presence via audio/video real-time communications technology.
      • Does not propose to continue allowing virtual supervision of residents when the service is performed virtually across all teaching settings; this would be allowed only for services provided in non-metropolitan statistical areas.
    • Extending the ability for federally qualified health centers and rural health clinics to bill telehealth services through Dec. 31, 2026.
  • Enhancing integration of behavioral health into primary care by:
    • Clarifying that marriage and family therapists and mental health counselors can bill Medicare directly for Community Health Integration and Principal Illness Navigation Services.
    • Creating add-on codes for Advanced Primary Care Management services that complement previously established Behavioral Health Integration or psychiatric Collaborative Care Model services.
    • Proposing deletion of the HCPCS code that describes social determinants of health risk assessment and altering language to refer to “upstream drivers” of health rather than “social determinants.”
  • Using new methodologies to calculate units of Medicare Part D drugs purchased under the 340B drug pricing program that must be excluded from the calculation of Medicare drug inflation rebates beginning Jan. 1, 2026, as required under the Inflation Reduction Act of 2022. The CMS proposes a claims-based methodology that would determine which Part D drug units are 340B eligible for exclusion. The CMS seeks comments on two methodologies: a prescriber-pharmacy methodology and a beneficiary-pharmacy methodology.
  • Implementing the Ambulatory Specialty Model, a mandatory payment model within selected core-based statistical areas, focused on specialists who frequently treat beneficiaries with congestive heart failure and low back pain, to begin Jan. 1, 2027, and run through Dec. 31, 2031.
  • Establishing a MIPS performance threshold of 75 points for the 2026 performance period through the 2028 performance period, as well as adopting six new MIPS Value Pathways (MVPs) and modifying performance categories under the Quality Payment Program. The new MVPs are proposed for the following:
    • Diagnostic radiology
    • Interventional radiology
    • Neuropsychology
    • Pathology
    • Podiatry
    • Vascular surgery
  • The CMS is seeking input on Executive Order 14192, “Unleashing Prosperity Through Deregulation.”

Hospitals are encouraged to contact Vickie Kunz by Sept. 2 regarding issues identified and submit comments to the CMS by Sept. 12. The MHA will provide an impact analysis in the coming weeks. A final rule is expected early November for the Jan. 1, 2026, effective date. Members with questions should contact Vickie Kunz at the MHA.