2026 Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) issued a final rule announcing policy changes for Medicare payments under the Physician Fee Schedule (PFS) and other Medicare Part B issues, effective on or after January 1, 2026. The rule increases payment rates for physicians by 3.77% for qualifying providers in advanced alternative payment models and 3.26% for other providers, while some specialty services will have an "efficiency adjustment" of -2.5%. Additionally, CMS is finalizing the new Ambulatory Specialty Model, a mandatory payment model focused on specialty care for beneficiaries with heart failure and low back pain. This model rewards specialists who detect early signs of worsening chronic conditions, enhance patients’ function, reduce avoidable hospitalizations, and use technology that enables them to communicate and share data electronically with patients and their primary care providers. The model will begin in January 2027.

Other updates include:
- simplifies telehealth supervision rules, allowing virtual oversight for certain services,
- finalizes optional add-on codes for Advanced Primary Care Management services that integrate behavioral health integration or psychiatric Collaborative Care Model services,
- updates how wound care products are paid as incident-to-supplies,
- updates how drugs are paid under Medicare Part B,
- replaces the term "social determinants of health (SDOH)" with the term "upstream driver(s)" for Community Health Integration (G0019), and,
- addition of three improvement activities to the merit-based incentive payment system, including cognitive impairment detection, oral health, and patient safety use of AI.