The Centers for Medicare & Medicaid Services (CMS) on Oct. 31 finalized the Calendar Year (CY) 2026 Physician Fee Schedule (PFS) Rule, including meaningful physician payment adjustments that will affect facilities. The rule also includes routine updates to physician payment, telehealth policies, and quality programs. America’s Essential Hospitals publicly commented on the proposed PFS rule in September.
Among other provisions, the rule establishes separate physician fee conversion factors: one for participants in qualifying alternative payment models (APMs), and one for practitioners who do not participate in qualifying APMs. For CY 2026, the conversion factor for qualifying APM participants will increase 3.77% over CY 2025, while the conversion factor will increase 3.26% for practitioners not participating in qualifying APMs.
In response to feedback from America’s Essential Hospitals and other stakeholders, CMS expanded its June proposal that allowed teaching physicians to virtually supervise residents providing telehealth services in rural settings to include all teaching settings.
Other policies on which America’s Essential Hospitals commented include:
- A -2.5% efficiency adjustment for services CMS has identified as having become more efficient over time
- Reduced indirect cost calculations for facility-based physician services
- An updated definition of “direct supervision” allowing telehealth for certain services, as well as routine updates to the telehealth services list
The association will publish further analysis of this rule in the coming days.
Contact Policy Analyst Evan Schweikert at eschweikert@essentialhospitals.org or 202.585.0124 with questions.
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