The Centers for Medicare & Medicaid Services (CMS) has announced a new initiative aimed at enhancing the quality of care for Medicare beneficiaries while reducing unnecessary spending. The 2026 Medicare Physician Fee Schedule (PFS) final rule introduces several changes, including a focus on primary care management and chronic disease management.
Health and Human Services Secretary Robert F. Kennedy, Jr. said, "The new Medicare fee schedule delivers a major win for seniors, protects hometown doctors, and safeguards American taxpayers." He emphasized that the changes are designed to shift the system from "sick-care" to true healthcare.
CMS Administrator Dr. Mehmet Oz added, "The actions we are taking will improve seniors’ access to high-quality, preventive care that will help them to live longer, healthier lives."
A key aspect of the final rule is a -2.5% efficiency adjustment targeting services like surgical procedures and diagnostic imaging interpretation. This adjustment aims to reflect technological advancements that have made these services more efficient over time.
Chris Klomp, CMS Deputy Administrator and Director of the Center for Medicare, explained that CMS is reinforcing primary care as the foundation of a better healthcare system while ensuring Medicare dollars support real value for patients.
Another significant change involves reducing spending on skin substitutes used in wound care. According to CMS data, spending on these products increased from $256 million in 2019 to over $10 billion in 2024 due to abusive pricing practices. In response, CMS plans to pay for skin substitutes under the PFS as incident-to supplies starting in 2026, potentially reducing program spending by $19.6 billion.
In alignment with Health and Human Services Secretary Robert F. Kennedy Jr.’s agenda, CMS is also focusing on prevention and wellness by repurposing risk assessment codes and introducing new outcomes measures aimed at preventing chronic diseases.
Additionally, CMS is launching the Ambulatory Specialty Model in January 2027. This mandatory payment model focuses on specialty care for heart failure and low back pain patients and aims to enhance care quality while reducing low-value care.
For further details on these initiatives: [CY 2026 Physician Fee Schedule final rule](https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f), [Medicare Shared Savings Program changes](https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f-medicare-shared-savings), [Ambulatory Specialty Model](https://www.cms.gov/priorities/innovation/innovation-models/asm), [CY 2026 PFS final rule](https://www.federalregister.gov/d/2025-19787).
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