Medicare Physician Fee Schedule (PFS) Proposed Rule for Calendar Year 2026: A Comprehensive Summary

On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released a proposed rule for the Medicare Physician Fee Schedule (PFS) for Calendar Year 2026. The proposed rule outlines changes to the Medicare payment policies and rates for physicians and other healthcare professionals who participate in the Medicare program.

Key Changes to the Proposed Rule

The CMS proposes several significant changes to the PFS, including:

1. Merit-Based Incentive Payment System (MIPS)

• The proposed rule retains the current MIPS payment adjustment methodology, with modifications to the performance categories and weightings.
• The CMS proposes to introduce a new performance category, "Value-based Primary Care," which would focus on primary care services.

2. Advancing Value Through Quality (AVVQ)

• AVVQ continues to be a significant component of the PFS, with the proposed rule maintaining its existing structure and requirements.
• The CMS proposes to expand the scope of AVVQ to include more types of clinical practices.

3. Quality Payment Program (QPP)

• The QPP continues to be a key component of the PFS, with the proposed rule introducing new quality performance categories.
• The CMS also proposes changes to the Cost measure, including the introduction of a new cost-measuring methodology.

4. Physician Fee Scales

• The CMS proposes several changes to the physician fee scales, including increases to certain specialty services.
• The proposed rule also includes changes to the payment rates for various medical procedures.

5. Rural and Underserved Areas

• The CMS proposes new requirements for reporting rural and underserved area (RUA) data under the PFS.
• These changes aim to ensure that Medicare payments more accurately reflect the needs of these areas.

Other Notable Changes

The proposed rule includes several other notable changes, including:

• Updates to the Physician Self-Referral Law: The CMS proposes changes to the law's provisions related to physician referrals and compensation.
• Clarifications on the Meaningful Use Program: The proposed rule provides additional guidance on the Medicare Incentives Payment System (MIPS) and other payment programs.
• Changes to the Hospital Value-Based Purchasing (VBP) Program: The CMS proposes changes to the VBP program, including updates to its quality performance categories.

Stakeholder Impact

The proposed rule is expected to have significant implications for healthcare providers, payers, and other stakeholders. Some of the key impacts include:

• Increased Complexity: The proposed rule introduces several new concepts, including AVVQ and Value-based Primary Care.
• Changes to Payment Rates: The CMS proposes changes to payment rates for various services, which may affect provider reimbursement.
• New Requirements for Reporting Data: The proposed rule requires healthcare providers to report additional data, including RUA information.

Implementation Timeline

The implementation timeline for the PFS proposed rule is as follows:

• Comment Period: Stakeholders have until November 17, 2025, to comment on the proposed rule.
• Final Rule: The CMS plans to release a final rule in June or July 2026.
• Effective Date: The final rule will take effect on January 1, 2027.

Conclusion

The Medicare Physician Fee Schedule (PFS) proposed rule for Calendar Year 2026 introduces several significant changes to the Medicare payment policies and rates. These changes aim to promote value-based care, improve quality performance, and address issues related to rural and underserved areas. Stakeholders are encouraged to carefully review the proposed rule and provide comments during the comment period to ensure that their interests are represented in the final rule.