Why this Newsletter

The Centers for Medicare & Medicaid Services (CMS) released the final 2026 Physician Fee Schedule effective January 1, 2026. It is important to understand that the Medicare Physician Fee Schedule is not exclusive to Medicare. The fee schedule is also used by the U.S commercial health insurance payers to inform or determine the reimbursement amounts paid to physicians in their health plans.
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The 2026 Centers for Medicare & Medicaid Services (CMS) physician schedule is particularly significant as it introduces the first physician payment increase in several years, alongside major structural changes to how “efficiency” and “practice expenses” are calculated. Below is several key highlights.

1. Split Conversion Factors (CF)
For the first time, as required by the Medicare Access and CHIP Reauthorization Act (MACRA), CMS has in the 2026 Schedule implemented two separate conversion factors based on participation in Physician Advanced Alternative Payment Models (APMs): one for qualifying participants (QPs) in alternative payment models and one for non-QPs. The 2026 schedule increases the conversion factor by 3.77% and 3.26% for QPs and non-QPs, respectively.

2) New Efficiency Adjustment
For nearly 7,700 non-time-based services the fee schedule includes a -2.5% reduction to the work Relative Value Units (RVUs). However, Evaluation and Management physician visits, behavioral health and most time-based services were exempt from this reduction.

3) Site-of-Service Practice Expense Shift
This rule significantly changes how indirect costs are allocated between physician offices and hospitals.

Office-Based reimbursement payment is expected to increase by ~4–6% as CMS recognizes higher indirect costs for independent practices. Hospital-Based reimbursement payments will decrease by ~7–11%.

4) Telehealth and Supervision Permanence
This rule made several permanent pandemic-era policies. Below is a summary of some of those policies.

  • Frequency Limits: Limitations on the frequency of subsequent inpatient visits, nursing facility visits, and critical care consultations via telehealth have been permanently removed.
  • The definition of “direct supervision” now permanently includes a supervising practitioner’s presence via real-time audio-video (excludes audio-only).
  • Teaching physicians can now permanently use audio-video technology to be “present” during the key portion of a telehealth service provided by a resident.

5) New Mandatory Physician Reimbursement Model
The final rule establishes a new mandatory physician five-year bundled payment program called the Ambulatory Specialty Model (ASM), which will launch in 2027. The new model aims to promote preventive care and early management of chronic conditions and will initially focus on lower back pain and heart failure.

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About Rowinski Group

2026 marks the 22nd year in business for Rowinski Group LLC. Rowinski Group is a global reimbursement and healthcare payer data analytics consultancy for medical devices, digital health and diagnostics companies who are developing and selling their medical technology for the U.S healthcare market.

Rowinski Group has offices in Silicon Valley – San Francisco Bay area and Chicago, Minneapolis, and Portland.

Rowinski Group has two core service offerings; securing codes and reimbursement on behalf of our company clients and using healthcare payer data analytics to help our companies solve their business issues like responding to questions from the FDA and Medicare, sales forecasting, building marketing models, Key Opinion Leader (KOL) identification.

Through these service offerings Rowinski Group helps companies from around the work to establish and build their U.S. market share.

For more information visit https://reimbursement.consulting  or contact Daniel Zimmerman d.zimmerman@reimbursement.consulting.