The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Physician Fee Schedule, introducing several changes that will affect physician payments and telehealth policies.
The conversion factor, which determines how much physicians are paid under Medicare, will see an increase in 2026. For physicians not participating in an advanced alternative payment model (A-APM), the conversion factor will rise from $32.34 to $33.40. Those participating in an A-APM will see it increase to $33.56. These adjustments reflect budget neutrality requirements, efficiency considerations, and a one-year 2.5% update passed by Congress to address inflation.
There is growing agreement among policy organizations that these updates may not be enough to maintain a robust Medicare program. The American Medical Association (AMA) highlighted concerns raised by the Medicare Payment Advisory Commission (MedPAC) in its June 2025 report to Congress: “In their June 2025 Report to Congress, the Medicare Payment Advisory Commission (MedPAC) expressed concerns about the growing gap between physicians’ input costs and Medicare payment, warning: ‘[t]his larger gap could create incentives for clinicians to reduce the number of Medicare beneficiaries they treat, stop participating in Medicare entirely, or vertically consolidate with hospitals, which could increase spending for beneficiaries and the Medicare program.’” MedPAC recommended that Congress replace current law updates with annual increases tied to the Medicare Economic Index (MEI).
The 2025 Medicare Trustees Report also noted ongoing issues regarding patient access under current payment laws: “the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term.”
According to the Florida Medical Association (FMA), advocacy efforts will continue: “At every available opportunity, the FMA will continue advocating for our long-standing goal of increasing Medicare payments for physicians.”
Telehealth policies have also changed as some flexibilities expired during a prolonged federal government shutdown. Exceptions remain for patients with mental health and substance abuse disorders. CMS has lifted frequency limits on telehealth services provided in hospitals and skilled nursing facilities and made virtual direct supervision permanent for most services requiring supervision.
Regarding the Merit-based Incentive Payment System (MIPS), FMA maintains its position against payment penalties associated with MIPS, stating these penalties do not help improve patient care. CMS did not raise the performance threshold needed to avoid a penalty in Performance Year 2026, which means fewer physicians are likely to face penalties in 2028.
Further details can be found through official CMS resources such as their press release and fact sheets on both physician payment schedules and the Medicare Shared Savings Program.
