The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Physician Fee Schedule, introducing changes to payment rates and telehealth policies. The conversion factor, which determines physician payments under Medicare, will increase from $32.34 to $33.40 for physicians not participating in an advanced alternative payment model (A-APM). For those in an A-APM, the rate will rise to $33.56.
Several factors influence the conversion factor, including budget neutrality adjustments, an efficiency adjustment, and a one-year 2.5% update passed by Congress to address inflationary pressures.
Policy groups have expressed concern that these increases may not be enough to maintain access to care for Medicare beneficiaries. In comments submitted to Congress, the American Medical Association (AMA) referenced findings from the June 2025 Report to Congress by the Medicare Payment Advisory Commission (MedPAC): “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 updates tied to the Medicare Economic Index (MEI). The 2025 Medicare Trustees Report echoed these concerns about patient access: “the Trustees expect access to Medicare-participating physicians to become a significant issue in the long term.”
The Florida Medical Association stated it would continue its efforts toward increasing physician payments under Medicare.
Regarding telehealth services, some flexibilities have expired due to an ongoing federal government shutdown except for patients with mental health and substance abuse disorders. While CMS cannot resolve all issues through rulemaking alone, it has removed frequency limits on telehealth services provided in hospitals and skilled nursing facilities and made virtual direct supervision permanent for most supervised services.
On quality reporting programs such as MIPS (Merit-based Incentive Payment System), CMS decided not to raise performance thresholds needed to avoid penalties in Performance Year 2026. This decision is expected to result in fewer physicians facing penalties in Payment Year 2028. The Florida Medical Association continues its policy advocacy against MIPS-related payment penalties.
Additional details are available through official resources such as the CMS press release, the Physician Payment Schedule Fact Sheet, and the Medicare Shared Savings Program Fact Sheet.
