In July, the Centers for Medicare & Medicaid Services (CMS) released its Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) proposed rule, which includes proposals related to Medicare physician payment and the Quality Payment Program (QPP). Final regulations will be issued in November and, unless otherwise noted, policies will be effective on Jan. 1, 2026. The ACR provided comments on the following fee schedule provisions, among others.
Physician Reimbursement
The CMS is proposing separate updates for Qualifying Alternative Payment Model (APM) Participants (QP) and non-QP clinicians. This is the first year the CMS will implement separate conversion factors based on QP status. The CY 2026 qualifying APM conversion factor is projected to increase by $1.24, from the current $32.35 to $33.59. The CY 2026 nonqualifying APM conversion factor is projected to increase by $1.17, from $32.35 to $33.42.
The change to the conversion factors reflects the temporary one-year increase of 2.5% included in the budget reconciliation bill signed into law on July 4 by President Trump. The overall reimbursement for rheumatological services is projected to increase by 4% for 2025. The ACR urged the CMS to increase the conversion factor beyond the proposed amount to at least keep pace with the Medicare Economic Index (MEI) and to collaborate with Congress to enact a permanent inflationary update for physician payments.
Efficiency Adjustment
The CMS is proposing a -2.5% “efficiency adjustment,” which would apply to the work Relative Value Unit (RVU) and corresponding intraservice portion of physician time of non-time-based services.
This would apply to all codes that are not based on time, such as evaluation and management (E/M) services, care management services and services on the Medicare telehealth list. The efficiency adjustment would be applied every three years, with the next applied in CY 2029, reflecting efficiency gains measured from 2027 through 2029.
Because this adjustment is not being appropriately applied and is inconsistent with fairly reflecting the time and intensity physicians use in providing thousands of services, the ACR strongly implored the CMS to rescind this proposal and explore alternatives to blunt, across-the-board efficiency adjustments that unintentionally penalize cognitive care.
Telehealth
The CMS is not proposing to extend the geographic location telehealth flexibilities that originated during the COVID-19 pandemic and were extended through Sept. 30 by Congress. Starting Oct. 1, telehealth originating-site specifications would limit patient location to certain rural and underserved areas.
The ACR encouraged the CMS to work with Congress to permanently extend all regulatory flexibilities on telemedicine reimbursement. We also called for the CMS to remove all restrictions on payment parity and remove any barriers to interstate licensure that bar providers from treating beneficiaries across state lines.
Inclusion of Maximum Fair Price in Average Sales Price
The CMS is proposing to clarify and codify that units of drug sold or paid at the Maximum Fair Price (MFP) are to be included in the calculation of Average Sales Price (ASP). This aligns ASP treatment with Medicaid’s “best price” framework. Furthermore, under Medicare negotiation provisions, when a drug is under negotiation, MFP replaces ASP in quarterly payment files, meaning no ASP-based payment limit will be published for those negotiated drugs.
MFPs are likely to be lower than current ASPs for Part B drugs, which are currently calculated as a manufacturer’s ASP across a number of eligible entities, including providers, commercial insurers and Medicare Advantage plans. Inclusion of MFPs in the calculation of ASP is likely to pull ASPs downward.
Therefore, the ACR strongly encouraged the CMS to not move forward with this provision. If the CMS chooses to move forward with it, the ACR recommends that the CMS create a reimbursement floor so that ASP reductions from MFP do not push reimbursement below drug acquisition and administration costs.
Quality Payment Program
The following are some of the changes the CMS is proposing to MIPS for CY 2026:
- The CMS is proposing to maintain the performance threshold at 75 points for CY 2026. It are proposing to maintain this threshold through the CY 2028 performance period.
- The CMS is not proposing to change the weights for the performance categories. The quality performance category will be weighted at 30% and the cost performance category will be weighted by 30%. The promoting interoperability and improvement activities performance categories will maintain their respective 25% and 15% weights.
- The CMS is proposing to expand the portfolio of available MVPs and is revising the format of each MVP (including the ACR’s Advancing Rheumatology Care MVP) to categorize the quality measures by clinical conditions or episodes of care.
- The CMS will be introducing a new format of the MVP tables in 2026 to stratify quality measures by clinical conditions and/or episodes of care for each MVP, identified as “Clinical Groupings.”
- The CMS is proposing to require multispecialty groups to report MVPs either as subgroups or as individuals, rather than as a single group entity.
The ACR expressed support for the first four, but not the last. Maintaining the option for group-level MVP reporting, particularly for practices that can demonstrate meaningful quality improvement through aggregated data, would preserve flexibility and reduce unnecessary burden.
We will monitor the rule’s implementation and serve as an educational resource for members on its provisions and the impact they will have on rheumatology. For further information about the ACR’s regulatory advocacy efforts, ACR/ARP members should email the ACR’s advocacy team at [email protected]. ACR/ARP members can also schedule a time to meet directly with the ACR’s advocacy team to discuss issues and challenges you are facing.