2026 Medicare Reimbursement & Policy Changes
A detailed breakdown of the Physician Fee Schedule (PFS), Part B premiums, and the shift in facility vs. office-based payments.
For 2026, the Centers for Medicare & Medicaid Services (CMS) and regulatory changes, including the 2026 Medicare Physician Fee Schedule Final Rule, introduce significant shifts in provider reimbursement and patient costs. [1]
Quick Summary
- Part B Premium: Increases to $202.90 monthly.
- Physician Pay: Conversion factor increases by 2.5% to 3.26%.
- Facility Services: Reduced reimbursement to align closer with office-based rates (Site-Neutral).
Physician Fee Schedule (PFS)
The 2026 updates bring a statutory 2.5% increase, which, when combined with other budget neutrality adjustments, results in a net positive conversion factor update.
This marks a pivot in CMS strategy to bolster independent physician practices while controlling facility-fee spending.
The Inflation Gap: MEI vs. PFS
While the +3.26% update is positive, it still lags behind the actual cost of running a practice. The Medicare Economic Index (MEI), which measures medical practice cost inflation, is projected closer to 3.6-4.0%.
The "Gap" represents the continued erosion of physician purchasing power, despite the nominal increase.
Site-Neutral Payments
Major Shift: Facility vs. Office
CMS is aggressively moving towards site-neutrality. New rules cut reimbursement for certain off-campus provider-based departments to just 40% of the standard OPPS rate.
Additionally, indirect practice cost allocations are shifting. This results in an estimated 7% reduction for facility-based services, while office-based physician payments see a corresponding 4% increase/stabilization. This rewards independent practices and penalizes hospital-owned outpatient monitoring.
Telehealth Permanency
APA Services notes that CMS has moved many "provisional" telehealth services to the permanent list.
- Group Psychotherapy: Now permanently reimbursable via telehealth.
- Obesity Counseling: Added as a permanently covered telehealth service.
The "G2211" Code Controversy
What is it?
G2211 is an "add-on" code for complex, longitudinal patient care. It is designed to pay primary care docs more for the extra time spent coordinating care for serious conditions.
Why it matters: Because Medicare must remain "budget neutral," the money to pay for G2211 comes from reducing the base conversion factor for everyone.
This redistribution effect means Primary Care docs who use the code see a net raise, while Surgical Specialists (who rarely use it) effectively pay for it through conversion factor cuts.
MIPS & MACRA 2026
The Merit-based Incentive Payment System (MIPS) continues to raise the bar. The maximum penalty for non-participation or poor performance remains -9%.
MIPS Value Pathways (MVPs)
CMS is pushing mandatory adoption of MVPs—specialty-specific sets of measures—to replace traditional MIPS. 2026 is likely one of the last years for "Traditional MIPS" reporting.
Performance Threshold
The point threshold to avoid a penalty remains high (75 points). Scoring below this directly reduces your 2028 reimbursement.
Accountable Care (ACOs)
The Medicare Shared Savings Program (MSSP) sees updates to encourage participation.
- Pre-paid Savings: Eligible ACOs can now receive a portion of shared savings in advance to invest in infrastructure.
- Health Equity Adjustment: Bonus points for treating underserved populations, impacting the final quality score.
Impact Analysis: Winners & Losers
Positive Impact
- Primary Care Providers
- Independent, Office-Based Specialists
- Telepsychiatry & Counseling
Negative Impact
- Home Health Agencies
- Hospital Outpatient Departments (HOPD)
- Skilled Nursing Facilities (SNF)
Frequently Asked Questions
When do these 2026 updates take effect?
Most changes, including the new conversion factor and Part B premiums, are effective January 1, 2026. Telehealth flexibility extensions also align with the calendar year.
Can I opt out of MIPS to avoid penalties?
Only if you meet specific Low-Volume Thresholds (LVT) regarding Medicare Part B billing charges or patient counts. Otherwise, non-participation results in an automatic -9% payment adjustment.
How does the G2211 code affect valid specialists?
Because of budget neutrality, the funds for G2211 payments are taken from the base conversion factor. This effectively reduces reimbursement for specialties that do not bill for longitudinal primary care services.
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J.R. Dunigan, DO
•Family Medicine Physician & FounderI founded MedMoneyGuide to provide physicians with the unbiased, specialty-specific financial guidance I wish I had when starting my own career. As a practicing physician, my mission is to cut through the industry noise and empower healthcare professionals to negotiate better contracts, eliminate debt, and build lasting wealth with confidence.
Sources & Methodology
References used in this guide:
[1] CMS.gov. (2025). 2026 Medicare Physician Fee Schedule Final Rule.
Methodology: This guide summarizes key provisions of the CMS Final Rule impacting independent physician practices, aggregating data from federal publications and policy analyses.
Disclaimer: This guide is for educational purposes only and does not constitute financial, legal, or tax advice. Please consult with a professional advisor regarding your specific situation.