The Centers for Medicare & Medicaid Services (CMS) has released a proposed rule on July 14, 2025, outlining potential changes to the Medicare Physician Fee Schedule (PFS) and other Medicare Part B issues, effective January 1, 2026. This proposal is part of a broader strategy to enhance healthcare quality and efficiency for Medicare beneficiaries.
Since 1992, payments under the PFS have been made for services provided by physicians and other professionals in various settings. These payments are determined using relative value units (RVUs), which consider work, practice expense, and malpractice expense. For CY 2026, CMS plans to implement two separate conversion factors: one for qualifying alternative payment model participants with a +0.75% update and another for non-qualifying participants with a +0.25% update.
An efficiency adjustment of -2.5% is proposed to address overinflated time assumptions in service valuations. CMS also intends to refine practice expense methodologies by recognizing greater indirect costs for office-based practitioners compared to those in facility settings.
Telehealth services may see streamlined processes for adding new services and removing frequency limitations on certain visits. CMS proposes virtual direct supervision through real-time audio-visual communication for some services.
For chronic illness and behavioral health needs, CMS aims to create optional add-on codes for Advanced Primary Care Management services that integrate behavioral health care. Feedback is sought on enhancing support management of chronic diseases.
Regarding skin substitutes, CMS proposes aligning categorization with FDA regulatory status and implementing single payment rates across different settings to encourage innovation while saving costs.
Additionally, policies are proposed concerning drug pricing under Medicare Part B and D, including defining bundled arrangements and revising definitions related to price concessions.
Public comments are invited on these proposals as part of an effort to improve global surgery payment accuracy and streamline regulations within the Medicare program.
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