News: CMS CY 2026 physician fee schedule final rule draws backlash from AHA

CMS issued its calendar year (CY) 2026 physician fee schedule final rule on October 31, according to the American Hospital Association (AHA).

In CY 2026, CMS is implementing two conversion factors, one for qualifying participants (QP) and those who do not qualify. According to CMS, when comparing CY 2025 to CY 2026, the QP conversion factor increased by 3.77% while the non-QP conversion factor increased by 3.26%.

According to CMS, additional modifications to the final rule include:

• An efficiency adjustment of -2.5% to work relative value units for non-time-based services
• An expansion of the definition “direct supervision” to include virtual presence (audio/video)
• A new claims-based methodology pertaining to 340B drug purchases
• The finalization of the “ambulatory specialty model,” which focuses on specialty care for patients with heart failure and low back pain
• The finalization of CMS “Medicare shared savings program”

Despite some of its positive aspects, the rule has drawn criticism from the AHA.

“The AHA is pleased that CMS, as directed by Congress, finalizes a positive payment update for physicians for CY 2026,” Ashley Thompson, AHA senior vice president of public policy analysis and development, said in a public statement. “However, we are disappointed that the agency also finalizes the proposed efficiency adjustment and changes to the practice expense methodology, which both redistribute payments and disadvantage certain providers, including hospital-based physicians. We remain concerned about the overall inadequacy of Medicare physician payments and its impact on access to and quality of care.”

Editor’s note: To read the final rule for CY 2026, click here. read the AHA coverage on the final rule, click here. To read the AHA statement on the final rule, click here.