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CMS issues CY 2026 physician fee schedule proposed rule

By American Hospital Association  
   July 15, 2025

Beginning in CY 2026, CMS proposes to implement two separate conversion factors: one for qualifying alternative payment model participants and one for physicians and practitioners who are not qualified participants. The rule would increase the APM conversion factor by 3.83% in CY 2026 as compared to CY 2025. It would increase the non-conversion factor by 3.62% in CY 2026 as compared to CY 2025. These updates include statutory updates of 0.75% and 0.25% for the APM and non-factors, respectively, another update of 2.5% as required under the One Big Beautiful Bill Act, and 0.55% that CMS states is necessary to account for proposed changes in work relative value units.

CMS also proposes that, for CY 2026, it would make an efficiency adjustment to certain work RVUs of -2.5%. In addition, the agency is proposing significant updates to its practice expense methodology that it says will recognize greater indirect costs for practitioners in office-based settings compared to facility settings. It also proposes to utilize data from auditable, routinely updated hospital data to set relative rates and inform cost assumptions for some technical services paid under PFS. Specifically, for CY 2026, it proposes to use this data in setting rates for radiation treatment services, and for some remote monitoring services.

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