The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Physician Fee Schedule, which includes changes to payment rates and telehealth policies.
For physicians not participating in an advanced alternative payment model (A-APM), the conversion factor will increase from $32.34 to $33.40. Physicians who do participate in an A-APM will see their conversion factor rise to $33.56. These adjustments are influenced by factors such as budget neutrality, efficiency modifications, and a one-year 2.5% update approved by Congress to address inflation.
There is growing agreement among policy organizations that more substantial updates are needed for the conversion factor to maintain a stable Medicare program. The American Medical Association commented: “In their June 2025 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the growing gap between physicians’ input costs and Medicare payment, warning: ‘[t]his larger gap could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat, stop participating in Medicare entirely, or vertically consolidate with hospitals, which could increase spending for beneficiaries and the Medicare program.’” MedPAC has suggested that Congress replace current law updates with annual increases tied to the Medicare Economic Index (MEI). The 2025 Medicare Trustees Report also warned that access to physicians may become a long-term problem if current laws remain unchanged.
The Florida Medical Association stated its ongoing commitment: “At every available opportunity, the FMA will continue advocating for our long-standing goal of increasing Medicare payments for physicians.”
Telehealth rules have also changed due to recent federal government shutdowns causing some flexibilities to expire except for patients with mental health and substance abuse disorders. CMS has removed frequency limits on telehealth services in hospitals and skilled nursing facilities and made virtual direct supervision permanent for most services needing supervision.
Regarding the Merit-based Incentive Payment System (MIPS), CMS did not raise the performance threshold required to avoid penalties in PY 2026. The Florida Medical Association supports repealing MIPS-related penalties because they have not demonstrated improvements in patient care. As a result of this decision, fewer physicians are expected to face penalties in PY 2028.
Additional information can be found through official CMS resources including their press release, fact sheets on physician payment schedules, and details on the Medicare Shared Savings Program.
