The Centers for Medicare & Medicaid Services (CMS) has issued the CY 2026 Medicare PFS Proposed Rule (CMS-1832-P), and it brings major updates to payment policies under Medicare Part B. Here’s what you need to know:
- Separate Conversion Factors: Beginning in 2026, two conversion factors will apply—one for qualifying alternative payment model (APM) participants and another for all other services. Both reflect modest increases from 2025.
- The qualifying APM proposed conversion factor = $33.59, an increase of $1.24 (3.83%)
- The proposed conversion factor for all others = $33.42, an increase of $1.17 (3.62%)
- Major Overhaul for Skin Substitute Payments: CMS proposes a “bundled” payment structure, reclassification of HCPCS codes, product specific pricing adjustments and additional utilization management policies
- New Physician Payment Rule: CMS aims to cut waste, improve quality care and improve chronic disease management with a new Ambulatory Specialty Model (ASM) payment model for specialty care of heart failure and low back pain, changes to quality measures that focus on prevention, and the above changes to payments for skin substitutes
- Telehealth Policy Updates: CMS proposes to extend several flexibilities, including continued coverage for select audio-only services, removing frequency limitation for subsequent inpatient/nursing facility visits and critical care consultations, and more clarity on direct supervision via virtual presence.
- Drug Pricing Reform: CMS outlines mechanisms for calculating rebates under the Medicare Prescription Drug Inflation Rebate Program, including 340B drug considerations.
- Behavioral Health & Enhanced Care Management: Expansion of services to increase access, including new digital mental health treatment options and support for complex patients.
Other Key Proposals:
- Practice expense methodology refinements
- Improvements to benchmarking and quality reporting to support ACO participation and performance
We recommend reviewing the proposed rule in its entirety to identify the issues pertinent to your organization and begin developing an implementation plan.
Learn more and read the full proposed rule here: https://public-inspection.federalregister.gov/2025-13271.pdf
The Fact Sheet can be accessed here: Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) Proposed Rule (CMS-1832-P) | CMS
The Fact Sheet on the Proposed Physician Payment Rule is here: CMS Proposes Physician Payment Rule to Significantly Cut Spending Waste, Enhance Quality Measures, and Improve Chronic Disease Management for People with Medicare | CMS
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