A summary of the 2026 Medicare Physician Fee Schedule Final Rule

On Oct. 31, the Centers for Medicare & Medicaid Services (CMS) issued the CY 2026 Medicare Physician Fee Schedule final rule, which includes updates to physician payment policies, the Medicare Shared Savings Program and the Quality Payment Program (QPP). The rule makes critical changes to payment of importance to osteopathic physicians across specialties.

The AOA has created a summary of the final rule that is available here (PDF).

The AOA Public Policy team will continue to review the final rule thoroughly and develop an in-depth summary and assessment, which will be available in the coming days.

Following are some highlights from the summary:

Most significantly, AOA’s strong advocacy secured enactment of legislation that includes a positive 2.5% increase to the 2026 conversion factor (CF), and successfully defended the .75% and .25% positive increase to the CF that was included in MACRA, which takes effect in 2026. CMS is implementing these changes, resulting in an overall increase to the conversion factors. Beginning in CY26, physicians who are qualifying participants (QPs) in advanced alternative payment models (AAPMs) under the Quality Payment Program (QPP) are subject to a different conversion factor than physicians who are not qualifying participants (i.e. Merit-Based Incentive Payment System participants). Both conversion factors will see an increase over 2025, with the qualifying APM CF increasing by 3.775% to 33.568, and the non-APM conversion factor increasing by 3.260% to 33.401. CMS has also adjusted the anesthesia conversion factors. The anesthesia qualifying APM CF will be 20.600 and the anesthesia non-APM CF will be 20.498. It is important to note that the increase to payment is only for CY 2026. The Medicare Economic Index, a measure of inflation for healthcare, is expected to increase 2.7% in the coming year, and AOA will continue to advocate with Congress for long-term reform to Medicare physician payment to ensure that payment keeps pace with the cost of practicing medicine.

The AOA is deeply disappointed that CMS chose to finalize policies imposing a new efficiency adjustment on non-time based services and modifying its approach to calculating indirect practice expense (PE) relative value units (RVUs). Together, these changes will mitigate the benefits of the improved conversion factor for many specialties. First, CMS finalized its proposal to impose a -2.5% efficiency adjustment to work RVUs for non-time based services, with some services exempted. Time-based services, including evaluation/management, care management services, maternity care services with an MMM global period, as well as several other services specified by CMS, will be exempted from the adjustment. Despite AOA advocacy, CMS chose not to exempt OMT codes from this adjustment. CMS also finalized changes to practice expense methodology, reducing the share of indirect PE RVUs assigned based on work RVUs by 50% for facility based services.

Telehealth

While CMS finalized policies intended to support continued access to telehealth, the agency is currently unable to make payment for most non-mental and behavioral telehealth services due to the expiration of telehealth flexibilities on Oct. 1, 2025. Because Congress did not extend the telehealth flexibilities established during the COVID-19 public health emergency, telehealth services rendered to patients in their homes and outside of rural settings can no longer be paid by Medicare until Congress enacts legislation extending these flexibilities. AOA is working with Congress to ensure Medicare patients can continue to access telehealth services.

Despite the status of statutory telehealth flexibilities, CMS still moved forward with its telehealth proposals, including simplifying the process for adding services to the Medicare telehealth list; and eliminating frequency limitations for subsequent inpatient visits, subsequent nursing facility visits and critical care consultations.

See the full summary

For more insights on the final rule, see the full AOA summary here (PDF).