On Monday, July 14, the Centers for Medicare & Medicaid Services (CMS) released the 2026 Medicare physician fee schedule proposed rule, which includes potential revisions to payment policies under the physician fee schedule, the Quality Payment Program, and other Medicare Part B payment policies.
Several key proposal highlights include:
Payment and reimbursement
Beginning in 2026, there will be two separate conversion factors.
| Conversion Factor A | Conversion Factor B |
|---|---|
| Qualifying alternative payment model participants | Physicians and practitioners who are not qualifying alternative payment model participants |
| $33.59 | $33.42 |
- CMS is proposing to use a sum of the past five years of the Medicare Economic Index (MEI) productivity adjustment percentage to calculate the efficiency adjustment of -2.5% for 2026.
- CMS is not proposing to implement the practice expense data or cost shares from the American Medical Association’s Physician Practice Information (PPI) and Clinician Practice Information (CPI) survey data for 2026 rate setting. The agency is still, however, proposing significant updates to the practice expense methodology to better reflect current clinical practice.
- CMS is also proposing to utilize data from auditable, routinely updated hospital data to set relative rates and inform costs assumptions for some technical services paid under the physician fee schedule.
Telehealth
After years of ongoing advocacy from AASM regarding telehealth policies, CMS is proposing to permanently adopt a definition of direct supervision, for services that are required to be performed under the direct supervision of a physician or other supervising practitioner, that allows the physician or supervising practitioner to provide such supervision through real-time audio and visual interactive telecommunications (excluding audio-only). This excludes services that have a global surgery indicator.
CMS is also proposing to transition back to their pre-COVID-19 public health emergency policy, which requires that, for services provided within metropolitan statistical areas, teaching physicians must maintain physical presence during critical portions of resident-furnished services to qualify for Medicare payment.
CMS will maintain the rural exception established in the 2021 physician fee schedule final rule metropolitan statistical area.
Policies to improve care for chronic illness and behavioral health needs
CMS is soliciting feedback to better understand how to enhance support management of the prevention and management of chronic disease.
The agency is proposing to create optional add-on billing codes for advanced primary care management that would facilitate providing complementary behavioral health integration or psychiatric collaborative care model services. This would include three new G-codes to be billed as add-on services with the advanced primary care management services (APCMS) base code reported by the same practitioner in the same month.
The complete 2026 proposed rule and fact sheet are currently available for review. The rule will be reviewed in its entirety and a comment letter will be developed on behalf of the AASM membership. Members are encouraged to submit individual comments as well.
Members may send questions about the proposed rule to the AASM Quality & Health Policy Team at coding@aasm.org.
