The Centers for Medicare & Medicaid Services (CMS) has released the final rule for the 2026 Physician Fee Schedule, which includes changes to the conversion factor affecting physician payments. The conversion factor for physicians not participating in an advanced alternative payment model (A-APM) will increase from $32.34 to $33.40, while those in an A-APM will see a rise to $33.56.
These adjustments are influenced by factors such as budget neutrality requirements, an efficiency adjustment, and a temporary 2.5% update passed by Congress to address inflation.
Policy groups have raised concerns that these updates may not be enough to support long-term sustainability of Medicare payments. The American Medical Association (AMA), referencing the June 2025 report from the Medicare Payment Advisory Commission (MedPAC), noted: “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). Similar concerns were echoed in the 2025 Medicare Trustees Report, which stated that patient access to physicians under current law could become a significant issue over time.
The Florida Medical Association (FMA) stated its continued commitment to advocating for higher Medicare payments for physicians: “At every available opportunity, the FMA will continue advocating for our long-standing goal of increasing Medicare payments for physicians.”
Regarding telehealth services, CMS has made some permanent changes despite certain flexibilities expiring due to ongoing federal government funding issues. The agency removed frequency limits on telehealth provided in hospitals and skilled nursing facilities and allowed virtual direct supervision permanently for most supervised services. However, exceptions remain primarily for patients with mental health and substance abuse disorders.
On Merit-based Incentive Payment System (MIPS) penalties, CMS decided not to raise the performance threshold needed to avoid penalties in Performance Year 2026. According to FMA policy positions calling for repeal of MIPS penalties—arguing they do not improve patient care—this decision likely means fewer physicians will face penalties in 2028.
For further details on these updates and related topics, CMS provides resources including a press release and fact sheets on both physician payment schedules and the Medicare Shared Savings Program.
