CMS Released the 2026 Fee Schedule, and Small Practices Need to Pay Attention
CMS released the CY 2026 Physician Fee Schedule Final Rule on October 31, 2025. Most provisions took effect January 1, 2026. For small practices, the changes worth reviewing first are the two conversion factors, the efficiency adjustment, MIPS reporting options, and updated telehealth policies.
In 2025, average Medicare Physician Fee Schedule payment rates decreased by 2.93%, while the conversion factor fell 2.83%, from $33.29 to $32.35. The effect on an individual practice depends on its specialty, service mix, geographic adjustments, and billed codes.
The 2026 final rule also includes changes to the Quality Payment Program. However, not every small practice has the same reporting requirements. Practices should first confirm which clinicians are MIPS eligible, whether an exception applies, and which reporting option best fits their specialty and patient population.
In this blog, we’ll break down what you need to know about the 2026 updates, how they’ll impact your practice, and what steps you can take to stay compliant, protect your revenue, and get ahead of the changes before they take effect.
2025 and 2026 Physician Fee Schedule Comparison
| Payment item | 2025 | 2026 |
|---|---|---|
| Standard conversion factor | $32.35 | $33.40 for clinicians who are not qualifying APM participants |
| Qualifying APM conversion factor | One general conversion factor applied | $33.57 |
| Efficiency adjustment | Not applicable | A 2.5% reduction applies to the work RVU and related intraservice time for certain non-time-based services |
| Individual practice impact | Depends on codes, specialty and locality | Depends on codes, specialty, locality, APM status and policy changes |
A higher national conversion factor does not mean every code or practice will receive the same percentage increase. Practices should compare their most frequently billed codes using the CMS fee schedule for their Medicare locality.
Key Takeaways from 2025 CMS Updates for Small Practices
- 2025 Conversion Factor Cut
The finalized 2025 Physician Fee Schedule conversion factor was $32.35, compared with $33.29 for most of 2024. Small practices should review the effect at the code level because changes in RVUs, geographic adjustments, and service volume can produce a different result for each practice. - Expanding Telehealth Opportunities
Medicare telehealth coverage should not be described as a general permanent expansion. Coverage depends on the service, practitioner type, patient location, and current law. Behavioral health telehealth services have separate geographic and location protections. Before billing, practices should confirm that the service appears on the current Medicare Telehealth Services List and that all patient-location, technology, documentation, and place-of-service requirements are met.
Looking Ahead: Major CMS Changes for 2026
The 2026 Physician Fee Schedule Final Rule, which came out on Oct. 31, 2025, outlines the new payment adjustments, quality measures, and telehealth regulations that small practices should prepare for. Let’s dive into what’s changing in 2026 and how it impacts your practice.
Two Conversion Factors Apply in 2026
CMS established two Physician Fee Schedule conversion factors for 2026. The qualifying APM conversion factor is $33.57, an increase of 3.77% from the 2025 conversion factor. The conversion factor for clinicians who are not qualifying APM participants is $33.40, an increase of 3.26%. Practices should confirm which factor applies before estimating the effect on Medicare revenue.
1. Value-Based Care: Transition to MIPS Value Pathways (MVPs)
MIPS Value Pathways are available as a reporting option for the 2026 performance year, but MVP reporting is not currently required. Eligible clinicians may still have other reporting options, including traditional MIPS and the APM Performance Pathway when applicable. A practice choosing an MVP must select a pathway that fits its specialty and register before the QPP deadline.
Before registering, small practices should confirm clinician eligibility, review available MVPs, select measures that match their patient population, and confirm that their EHR, registry, or billing workflow can collect the required information.
2. Work RVU and Efficiency Adjustments
CMS finalized a 2.5% efficiency adjustment for certain non-time-based services in 2026. The adjustment applies to the work RVU and the corresponding intraservice portion of physician time for affected services.
Time-based services are generally exempt. CMS identifies evaluation and management visits, care management services, behavioral health services, services on the Medicare Telehealth Services List, and certain maternity services among the exemptions. Practices should review CMS’s final affected-code list rather than assuming all office visits or procedural services receive the same adjustment.
3. Confirm the Current Telehealth Rules Before Billing
Medicare telehealth requirements depend on the service, practitioner type, patient location, and applicable legislation. Practices should verify that each service appears on the CY 2026 Medicare Telehealth Services List and confirm whether any geographic or originating-site restrictions apply.
Use POS 10 when the patient receives the telehealth service at home. Use POS 02 when the patient receives the service at an eligible location other than home. These place-of-service codes were not newly created for 2026.
Because Congress can extend or change telehealth policies during the year, staff should use the current CMS guidance rather than relying only on the original final-rule summary.
Steps Small Practices Should Take Now
With the 2026 rules now in effect, small practices should review the areas most likely to affect their Medicare billing and reporting. Here are the priorities worth checking now:
| Priority | What to Review | Action |
|---|---|---|
| 2026 Fee Schedule | High-volume Medicare codes | Compare 2025 and 2026 payment amounts using your Medicare locality |
| Efficiency Adjustment | Frequently billed non-time-based services | Check whether your codes are affected by the -2.5% adjustment |
| MIPS | Clinician eligibility and reporting options | Confirm eligibility before choosing traditional MIPS, an MVP, or another applicable pathway |
| Telehealth | Eligible services and POS requirements | Review telehealth claims for service eligibility, patient location and correct POS |
| Billing System | 2026 CPT/HCPCS and Medicare rates | Confirm current codes and payment data are loaded into your billing workflow |
How to Stay Updated on CMS Regulations
Keeping up with annual CMS changes takes time away from running the practice and caring for patients.
How to Monitor Future Changes
Assign one staff member or billing partner to review CMS and QPP updates each month. Subscribe to CMS and Medicare Administrative Contractor email alerts, check the QPP website during the performance year, and document any billing-rule changes that affect the practice.
Conclusion
The 2026 Physician Fee Schedule does not affect every practice or service in the same way. Start by identifying which conversion factor applies, comparing high-volume codes with their 2025 payment amounts, reviewing the efficiency-adjustment code list, checking MIPS eligibility, and confirming current telehealth requirements.
Staying current with CMS payment and reporting rules helps reduce avoidable billing errors and gives practices a clearer view of how policy changes may affect Medicare revenue. Dastify Solutions can help practices review affected codes, compare payment changes, and update billing workflows based on current CMS guidance.
