2026 Physician Fee Schedule Finalized
On October 31, 2025, the Centers for Medicare and Medicaid Services (CMS) issued the final rule for the 2026 Physician Fee Schedule (PFS). The final conversion factor for qualifying alternative payment model (APM) participants is $33.57, which is a 3.77% increase from 2025, while the nonqualifying APM conversation factor is $33.40, a 3.26% increase. These increases reflect the increases required by current law.
One of the more significant features in the 2026 PFS is the introduction of an "efficiency adjustment," which will reduce payments by 2.5% for most procedural codes; the final rule exempts all time-based codes, including evaluation and management codes, which support most palliative care services. In addition, major changes to the practice expense have been finalized, which effectively reduces pay for services delivered in a facility while boosting pay for services performed in private practice offices; according to the draft rule, the net reduction to facility-based services is 7%, with an average increase of 4% for office practices.
Regarding telehealth, remember that CMS does not have the authority to restore payment for services delivered remotely when the patient is not in a qualifying medical facility or in a qualifying geographic area. However, the 2026 rule does permanently remove frequency limitations for subsequent hospital, critical care, and nursing facility visits.
Other relevant rules include: payment for complexity add-on code G2211 for visits performed in the home or residence; adoption of the Ambulatory Specialty Model (ASM) for specialists who treat heart failure or low back pain in outpatient settings, beginning January 1, 2027 in selected regions; new billing codes for Advanced Primary Care Management; and updates to the Malpractice Premium RVUs using available data.