Payer Policy

CY 2026 Medicare Physician Fee Schedule Recap

Two Conversion Factors, a New Efficiency Adjustment, and What It Means for Every Part B Claim

Rcmaxis Billing & Policy Update  ·  Posted October 10, 2026  ·  Effective: January 01, 2026

CMS-1832-F set two separate CY2026 conversion factors: $33.57 for clinicians who are Qualifying Participants in an Advanced Alternative Payment Model, and $33.40 for everyone else, alongside a new -2.5% efficiency adjustment to work RVUs on certain non-time-based services.

Summary of the Rule

CMS finalized the Calendar Year 2026 Medicare Physician Fee Schedule final rule, CMS-1832-F, setting payment policy and rates for Part B services and making changes to the Quality Payment Program. For CY2026, CMS continues the two-track conversion factor structure created by recent legislation: a higher rate of $33.57 for practitioners who qualify as Advanced APM participants, a 3.77% increase over CY2025, and $33.40 for non-qualifying practitioners, a 3.26% increase. Every Part B claim's payment traces back to one of these two numbers, multiplied against the service's relative value units and the locality's geographic practice cost index.

The rule also introduced an efficiency adjustment of -2.5% to the work RVUs for certain non-time-based services, reflecting CMS's view that clinical efficiency has improved for those services since they were last valued. Time-based services, the care management and behavioral health codes among them, are generally excluded from this specific adjustment. The rule's broader themes included expanded behavioral health integration codes, continued telehealth flexibilities, and changes to MIPS scoring for the 2026 performance year.

Two conversion factors means your practice's effective payment rate now depends partly on whether your billing practitioners are Qualifying Participants in an Advanced Alternative Payment Model. Confirm QP status for each billing NPI before assuming which conversion factor applies to a given claim.

Action Required for Billing Teams

Verify which conversion factor applies to each billing provider in your practice management system before year-end reconciliation, since mixing QP and non-QP conversion factors across different providers in the same group is normal and not an error. For any non-time-based service affected by the -2.5% efficiency adjustment, expect a modest reduction in the work RVU component even where the conversion factor itself increased.

  • Confirm QP status per NPI. Check your Advanced APM participation status for CY2026 against CMS's QP determination.
  • Reconcile fee schedules in your PM system. Confirm both conversion factors are loaded correctly if your group has a mix of QP and non-QP billers.
  • Flag time-based care management codes separately. PCM, CCM, APCM and RTM codes are generally not subject to the -2.5% efficiency adjustment the same way procedural codes are.

For the time-based care management codes specifically, our guide to Principal Care Management billing in 2026 walks through how the CY2026 conversion factors apply to PCM's four CPT codes.

Verifiable References

  1. Centers for Medicare & Medicaid Services. Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule (CMS-1832-F) Fact Sheet. cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f
  2. Centers for Medicare & Medicaid Services. Physician Fee Schedule Look-Up Tool. cms.gov/medicare/payment/fee-schedules/physician
  3. Centers for Medicare & Medicaid Services. Quality Payment Program. qpp.cms.gov

Related Resources

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