The Centers for Medicare & Medicaid Services (CMS) has issued the final rule for the 2026 Medicare Physician Fee Schedule, introducing several changes that will impact payment rates and telehealth services.
For physicians not participating in an advanced alternative payment model (A-APM), the conversion factor will increase from $32.34 to $33.40. Those participating in an A-APM will see the conversion factor rise to $33.56. These adjustments reflect budget neutrality requirements, an efficiency adjustment, and a one-year 2.5% update approved by Congress to address inflation.
Several policy organizations have expressed concern that these updates are insufficient for long-term sustainability of the Medicare program. The American Medical Association (AMA) commented 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 has recommended that Congress replace current law updates with annual increases tied to the Medicare Economic Index (MEI). The 2025 Medicare Trustees Report also noted potential issues with patient access if current trends continue, stating that under current law, “the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term.”
Telehealth policies have also changed as some flexibilities expired due to ongoing federal government shutdowns. Exceptions remain for patients with mental health and substance abuse disorders. While CMS cannot address all telehealth issues through rulemaking alone, it has removed frequency limits on telehealth services in hospitals and skilled nursing facilities and permanently allowed virtual direct supervision for most services requiring oversight.
Regarding the Merit-based Incentive Payment System (MIPS), CMS did not raise the performance threshold needed to avoid penalties for performance year 2026. This decision may result in fewer physicians being penalized in payment year 2028. The Florida Medical Association (FMA) continues its advocacy against MIPS penalties, arguing they do not contribute meaningfully to patient care.
At every available opportunity, the FMA will continue advocating for our long-standing goal of increasing Medicare payments for physicians.
Additional information can be found on CMS’s official website and fact sheets related to physician payments and shared savings programs.
