The Centers for Medicare & Medicaid Services (CMS) on Monday released the calendar year (CY) 2026 Medicare Physician Fee Schedule and Quality Payment Program (QPP) proposed rule that updates payment rates for physicians (PDF) and other health care professionals, addresses certain telehealth waivers and flexibilities, refines the Shared Savings Program for accountable care organizations, revises requirements under the QPP, creates a new mandatory Ambulatory Specialty Model, and changes other policies.
As required by statute, the CMS proposes to begin implementing two separate conversion factors: one for qualifying alternative payment model (APM) participants (QPs) and one for physicians and practitioners who are not QPs. The proposed CY 2026 conversion factor for QPs is $33.59, representing a 3.83% increase from CY 2025, and for non-QPs the proposed conversation factor is $33.42, representing a 3.62% increase from CY 2025. QP status in CY 2026 is based on meeting APM participation thresholds for the 2024 QPP performance year.
The CMS also proposes applying an efficiency adjustment of -2.5% to the work relative value units (RVU) and corresponding intraservice portion of physician time for non-time-based services, as the CMS expects these kinds of services to accrue efficiencies over time as “changes in medical practice” occur. This adjustment would generally apply to all codes except time-based codes, such as E/M services, care management services, behavioral health services, and services on the CMS telehealth list.
Citing the rising steady decline in the number of physicians working in private practice, with a corresponding rise in employment by hospitals and health systems, the CMS proposes to recognize greater indirect practice expense costs for practitioners in office-based settings compared to facility settings to better reflect current clinical practice.
The CMS proposes a new mandatory Ambulatory Specialty Model for specialists who treat low back pain or heart failure in an outpatient setting to be announced in a selected core-based statistical area or metropolitan division. Physicians would be assessed on an individual basis, and not at the practice level, on Quality, Cost, Care Improvement Activities, and Improving Interoperability to determine whether they will receive positive, neutral, or negative payment adjustments (-9% to +9%) on future Medicare Part B claims for covered services. The model is proposed to run from 2027 through 2031.
The CMS also released a Physician Fee Schedule fact sheet, Medicare Shared Savings Program fact sheet, Ambulatory Specialty Model fact sheet (PDF), and a Quality Payment Program fact sheet (PDF) along with the proposed rule.