2026 Medicare Physician Fee Schedule: A policy ‘grab bag’ that hurts independent practice, telehealth regulations

The 2026 Medicare Physician Fee Schedule (MPFS) is far from perfect, according to responses from at least three medical organizations.

The U.S. Centers for Medicare & Medicaid Services (CMS) published the 2026 at the end of October. It’s “a grab bag of changes” that could have unintended consequences for U.S. health care next year, said the statement from American Medical Association President Bobby Mukkamala, MD.

“That physicians are not facing a reduction in reimbursements — as we have in the past — is a significant positive for 2026 and a win for patients’ access to care,” he said in a statement. “Yet, this one-time correction does not keep up with increasing costs, and private practices across the country are expressing concern this rule would further put them at a disadvantage merely for treating patients at a hospital or ambulatory surgery center.

“As the new rule is implemented and its changes are felt, we will share with CMS the real-world impacts — data and details not always easily available to policymakers in Washington,” he said. “This exchange and collaboration are vital to keeping practices open during a physician shortage.”

A blip up on a downward trajectory

The 2026 increase to physician reimbursement follows a year of dealing with a 2.83% cut, said Anders Gilberg, senior vice president, government affairs, of the Medical Group Management Association (MGMA).

“This does not remedy previous cuts that medical groups have absorbed due to flawed policy, nor does it address potential future cuts resulting from budget neutrality,” he said in a statement.

The 2026 MPFS also has cuts to work and practice expense relative value units. Those do not accurately reflect the cost of providing care and will affect certain specialties, Gilberg said.

“Taken together, these policies reflect systemic inadequacies in the payment structure,” he said. “Congress must intervene and pass legislation to provide an annual inflationary update to physician payments, ensuring Medicare is on a sustainable trajectory.”

Base it on inflation

AMA agreed physician pay changes should be adjusted based on inflation, such as the Medicare Economic Index. The association suggested two policies will hurt physicians in private practice.

An efficiency adjustment down — set at -2.5%, per CMS — will reduce physician payment for more than 7,000 services, or a full 95% of all services provided by doctors. Meanwhile, a cut to physician pay for services performed in hospitals and ambulatory surgical centers do not reflect the true costs of physician practices in a facility setting. That could reduce competition and encourage consolidation, two things that CMS has sought to avoid, according to AMA.

The combined results: 37% of oncologists could facing cuts up to 20%, while 37% of obstetricians and gynecologists would face reductions.

“The AMA urges CMS to base policy changes on verifiable data, including results from the Physician Practice Information Survey, to ensure that payment adjustments reflect the true costs of delivering care,” the AMA statement said.

Hurting independent practice?

The AMA noted that two CMS proposals that were finalized in the new rule will directly undercut private practice viability. Specifically, the efficiency adjustment would reduce payment for more than 7,000 physician services — 95 percent of all services provided by physicians. The AMA has proposed an alternative that strengthens primary care payment while improving the accuracy of time data used in payment determinations.

CMS also finalized a reduction in physician payment rates for services performed in facilities such as hospitals or ambulatory surgical centers. Because these cuts fail to reflect true resource costs incurred by physician practices in the facility setting, they risk reducing competition and encouraging consolidation, results that CMS itself has explicitly sought to avoid.

Together, as proposed, these policies were estimated to result in 37 percent of oncologists facing cuts between 10 and 20 percent. Also, 37 percent of obstetricians and gynecologists would face cuts. The AMA urges CMS to base policy changes on verifiable data, including results from the Physician Practice Information Survey, to ensure that payment adjustments reflect the true costs of delivering care.

“We’re concerned that, at a time of increasing consolidation in health care, this rule will make it harder for independent practices to remain viable parts of our health system. We look forward to working with CMS to address that concern, so Medicare patients can continue to see their physicians,” Mukkamala added.

Telehealth still on hold?

The 2026 MPFS has a telehealth policy that is the antithesis of providing streamlined regulation and simplified documentation, said a statement from telemedicine advocacy organization Alliance for Connected Care.

Since 2020, CMS has allowed telehealth practitioners to report and bill services using currently enrolled practice locations, even when offering services from home or another location.

CMS did not renew that policy — meaning services will end, or physicians must enroll and bill from each location where they deliver the service. An Alliance survey predicted a 40-fold increase in the number of billing addresses that CMS must track, and health systems will add millions to their operational costs.

The Alliance for Connected Care said the organization’s members share the vision of CMS Administrator Mehmet Oz, MD, MBA, for fewer administrative burdens and greater clinician empowerment.

“We strongly support efforts to streamline regulations, simplify documentation requirements, and modernize federal policies that no longer reflect how care is delivered in today’s connected environment,” the Alliance statement said. “This change is the antithesis of that vision and should be immediately corrected through sub-regulatory guidance.”