2026 Medicare Physician Fee Schedule proposes 3.6% pay bump, permanent remote imaging supervision

The federal government on Monday afternoon unveiled the 2026 Medicare Physician Fee Schedule, which includes a proposed 3.6% increase to the conversion factor used to calculate provider payments. In addition, CMS wants to permanently allow physicians to supervise certain imaging exams remotely—a big win for radiology and other specialties. 

CMS, formally the Centers for Medicare & Medicaid Services, is proposing to boost the conversion factor by $1.17 over the 2025 amount, up to $33.42. Meanwhile, physicians participating in Alternative Payment Models aimed at cutting costs will receive a 3.83% increase to the conversion factor (or $1.24), which will reach $33.59 next year. 

Experts noted Monday that this year’s proposal is “especially notable,” given its implementation of dual conversion factors. Linda Wilgus, co-executive director of the Radiology Business Management Association, believes this split and other proposals in the MPFS will “shape the future of radiology and physician reimbursement.” 

“This bifurcation reflects a broader shift toward value-based care and will have far-reaching implications for practice planning and financial forecasting,” Wilgus said in a statement July 14. 

More on pay changes

In its own analysis, the American College of Radiology reported this split is the result of the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The conversion factor increase for Alternative Payment Model participants includes a 0.75% annual update, while other physicians outside of these value-based care arrangements will gain 0.25%. However, both will benefit from another 2.5% increase on top of those figures, as spelled out in the reconciliation bill finalized July 4. 

If the proposed rule is implemented as is, CMS estimates an overall impact from the fee schedule changes at -1% for radiation oncology and nuclear medicine, -2% for diagnostic radiology and 2% for interventional rads, ACR noted. 

“Radiation oncology has experienced years of significant payment declines under the MPFS, and the field will undergo major changes in valuation and coding in 2026,” Vivek S. Kavadi, MD, MBA,  chief executive of the American Society for Radiation Oncology (ASTRO), told Radiology Business Monday. “ASTRO is concerned about any cuts to radiation therapy, but we are encouraged that CMS, in the proposed rule, is thinking about ways to ensure accurate reimbursement that reflects the costs of delivering high quality cancer care.”

Physicians have for years expressed concern that CMS estimates of practice expenses are based on outdated information tracing back to 2008. To address this, the American Medical Association recently conducted a survey of physicians to gather a more accurate picture of escalating expenses, with the ACR heavily promoting the initiative. However, Medicare has opted not to use information from the high-profile survey.

“Specifically, our concerns focus on small sample sizes and sampling variation, low response rates and representativeness, potential measurement error and incomplete data submission,” CMS said in a fact sheet shared Monday. 

CMS said it is still proposing “significant updates” to expense methodology, hoping to “better reflect current clinical practice.” The agency aims to recognize greater indirect costs for physicians in office-based settings when compared to hospital facilities. 

Previous calculations assumed physicians maintained separate practice locations even if they furnished some care in hospitals. However, since these methodologies were established decades ago, CMS said, there has been a steady decline in the number of physicians working in private practice—a trend amplified by a corresponding uptick in those working for hospitals and health systems. 

“Therefore, we believe that the allocation of indirect costs for [practice expense] [relative value units, or RVUs] in the facility setting at the same rate as the non-facility setting may no longer reflect contemporary clinical practice,” the agency said. 

For 2026, ACR noted, Medicare proposes to maintain the current practice expense per-hour data and cost shares. The agency will continue its contract with the RAND Corp. to analyze and develop alternative methods for measuring practice expenses and related inputs, which it would implement in future fee schedules. 

Virtual supervision made permanent

In 2020, amid the COVID-19 pandemic, CMS started letting physicians remotely supervise certain imaging exams. The agency had extended this temporary perk until Dec. 31, but it is now proposing to make it permanent. 

Radiology advocates who have lobbied for this change in recent months celebrated the proposal Monday. 

“RBMA is encouraged by CMS’s proposal to increase the Medicare Physician Fee Schedule conversion factor, a welcome shift after years of downward pressure on reimbursement,” RBMA Co-Executive Director Linda Wilgus said. “We also applaud CMS for proposing to make virtual direct supervision permanent for imaging studies involving contrast media. This is a critical step toward modernizing care delivery and expanding access, particularly in underserved and rural areas.”

Currently, CMS allows level 2 tests such as CT and MRI with contrast to be supervised by a physician or other advanced-practice provider, if permitted by state law. They can do so by remaining virtually present and available via two-way, real-time communication technology. The proposed 2026 fee schedule continues allowing radiologists and other providers to do so, excluding audio-only arrangements, ACR noted in its analysis. CMS is making certain exceptions, not allowing virtual supervision for services that have a global surgery indicator of 010 or 090. 

The agency also proposes extending its waiver that lets federally qualified health centers and rural health clinics bill for telehealth services through 2026, the American Hospital Association reported. However, CMS is not extending the waiver allowing physicians to virtually supervise services furnished by medical residents in teaching settings. 

Efficiency adjustments

In the past, CMS has relied on survey data provided primarily by the AMA Relative Value Scale Update Committee (RUC) to estimate physicians’ time spent on services, along with the intensity of their work. These figures are often reflected in the valuation of codes paid under the physician fee schedule. 

However, only a small number of codes are considered for revaluation annually, CMS said in its fact sheet. Often, these updates are influenced by “subjective information” from such surveys, which have “low response rates” with participants “who may have inherent conflicts of interest (since their responses are used in setting their payment rates).” 

“Research over time has demonstrated that the time assumptions built into the valuation of many [physician fee schedule] services are, as a result, very likely overinflated.[1],” the agency said. 

CMS is proposing to apply an “efficiency adjustment” to the intra-service times and work relative value units of nearly all non-time-based codes in the fee schedule. It plans to adjust these figures in the future—when physicians produce “gains in efficiency over time.” 

Examples include imaging exams or interventional procedures that might be delivered more quickly thanks to new technologies, allowing for quicker care delivery. These updates would periodically apply to virtually all codes. The only categorical exception will be for codes tied to service duration, such as those for evaluation and management, behavioral health and other services on the Medicare telehealth list. 

To determine this efficiency adjustment, CMS is proposing to use a sum of the past five years of the Medicare Economic Index productivity adjustment percentage, according to the fact sheet. The agency’s Office of the Actuary calculates the MEI productivity adjustment annually. In the new physician fee schedule, CMS is proposing a “look back period” of five years, resulting in a proposed efficiency adjustment of -2.5% for 2026. 

In addition, the agency may “give preference” to “empiric studies of time to incorporate into service valuation, compared to low-response rate survey data.” 

Medicare plans to solicit comments on the types of such data it should consider for these calculations.

“CMS expects that moving away from survey data would lead to more accurate valuation of services over time and help address some of the distortions that have occurred in the [physician fee schedule] historically,” the fact sheet states. 

A vote of no confidence? 

Physicians expressed concern about this proposed change on Monday. 

“CMS no longer trusts doctors to say how long it takes or how much work it takes to perform procedures and are intentionally hurting hospital-based physicians (surgeons, anesthesia, hospitalists, emergency medicine, etc.),” Adam Bruggeman, MD, chairman of the American Academy of Orthopedic Surgeons Council on Advocacy, told Radiology Business. “I’m tired of the medicine hunger games. Stop making us hurt each other to get paid. It helps no one. This will only accelerate doctors’ [desire] to leave practice.”

Orthopedics is predicted to have a 5% reduction in pay, Bruggeman continued, “after the sneaky reduction based on ‘efficiencies’ that only surgeons are making but office-based doctors aren’t. It’s absurd and uncalled for.”

The agency currently is proposing to make these efficiency adjustments every three years, ACR noted. CMS also is soliciting feedback on whether efficiencies should stop accruing for services after a predefined number of years. It’s additionally exploring whether the introduction of new artificial intelligence technologies will contribute to efficiencies, and how CMS should determine payment for procedures that gradually take less time to perform. 

Fears of a short-term solution now, long-term ‘catastrophe’ later 

Alaska-based radiologist Ned Holman highlighted impacted services in the fee schedule, such as combo CT angiography of the head and neck at 2.5 wRVUs, which represents a 28.6% cut. CT perfusion will be 0.77, and for CT H&N + perfusion, rads would see a 6.6% cut (since perfusion was unpaid previously). 

“The mention of an efficiency factor adjustment to non-time-based wRVU values by CMS going forward is giving me more pause than this one exam adjustment,” he added in a follow-up social media post. “I think it could be a catastrophic thing for us long term. More to be learned there.”

You can read more about the proposed rule in the CMS press release, corresponding fact sheet, 1,800-page propose rule, and the American College of Radiology’s seven-page analysis. 

RBMA, ASTRO, ACR and the Society of Interventional Radiology said Monday they continue to review the rule with plans to release a more thorough analysis in the coming days or weeks. AMA, mentioned numerous times in CMS communications about the fee schedule, had not publicly released a statement as of late Monday.