Here are 10 things to know about the proposed changes to CMS payments for physicians:
1. Beginning in 2026, CMS will have two separate conversation factors in its physician fee schedule. The first will be for qualifying alternative payment model participants, and the second for physicians and practitioners who are not QPs. QPs meet certain thresholds for participation in Advanced APM, a payment model with built-in features to ensure accountability for quality and cost of care.
2. The proposed update to the APM conversion factor for 2026 is a 0.25% increase.
3. The proposed update to the 2026 physician fee schedule includes these updates, as well as a one-time 2.5% statutory increase.
4. The proposal also includes an estimated 0.55% adjustment to account for proposed changes in work RVUs for some services.
5. The proposed APM conversion factor for 2026 is $33.59, representing a projected increase of $1.24 or 3.83% from the current conversion factor of $32.35.
6. The proposed conversion factor for non-APM participants is $33.42, representing a projected increase of $1.17, or 3.62% from the current conversion factor of $32.35.
7. CMS is also considering updates to geographic practice cost indices and malpractice RVUs.
8. CMS cited research that reportedly demonstrates that the time assumptions built into the valuation of many physician services are “very likely overinflated,” as it has historically relied on data provided primarily by the American Medical Association’s Relative Value Scale Update Committee. Under this model, very few codes are considered for revaluation annually, and the data used is often subjective and collected from surveys with low response rates. As a result, CMS is now proposing an efficiency adjustment to the work RVU and corresponding intraservice portion of physician non-time-based services.
9. This would periodically apply to all codes except those that are time-based.
10. CMS is now proposing to use a sum of the past five years of the Medicare Economic Index productivity adjustment percentage to calculate this efficiency adjustment.
“The MEI productivity adjustment is calculated by the CMS Office of the Actuary each year, and we are proposing a look-back period of five years, which would result in a proposed efficiency adjustment of -2.5% for CY 2026,” CMS said in the policy update. “We are also proposing that, going forward, CMS may give preference to empiric studies of time to incorporate into service valuation, compared to low-response rate survey data, and solicit comment on the types of empiric data that CMS should consider. CMS expects that moving away from survey data would lead to more accurate valuation of services over time and help address some of the distortions that have occurred in the PFS historically.”
