CMS Issues 2026 Physician Fee Schedule Final Rule

On Oct. 31, the Centers for Medicare & Medicaid Services (CMS) released the CY 2026 Medicare Physician Fee Schedule Final Rule, which outlines payment and policy updates for services furnished on or after Jan. 1, 2026, under Medicare Part B. The rule was largely finalized as proposed with some modifications. In response to stakeholder concerns, CMS decided against changes to Bona Fide Service Fees and Fair Market Value definitions.

The agency finalized the proposed 340B changes with some modifications, including its proposal to create a voluntary claims data repository (with privacy safeguards). CMS also finalized Average Sales Price updates, such as inclusion of Maximum Fair Price units, bundled pricing guidance, and continuation of existing payment policies for autologous cell and gene therapies, while holding back proposals that would have reclassified certain payments.

CMS finalized an increase in physician fee schedule (PFS) payment rates for 2026 that reflects statutory updates. However, the agency finalized rate cuts for most specialists through an efficiency adjustment and site-of-service differential policy despite significant pushbacks. As widely expected, the agency also finalized a proposal to reduce payments for skin substitutes by roughly 90% using a flat fee model. The final rule includes several provisions that reaffirm CMS’ commitment to advancing digital and virtual care, broadening reimbursement pathways, making select flexibilities permanent, and simplifying administrative processes to support continued access and innovation.