The Trump administration is proposing a pay bump for physicians in 2026, alongside new reforms that align with the agency's Make America Healthy Again positioning.
The Centers for Medicare & Medicaid Services released the proposed physician fee schedule on Monday evening, which would set the conversion factor, or the amount that Medicare pays per work relative value unit, at $33.42, an increase of 3.62% over the 2025 rate of $32.35.
That increase accounts for a 2.5% payment adjustment required by the Big Beautiful Bill Act, and a bump of 0.55% to account for changes to some RVUs, per a fact sheet on the rule.
The agency also said it intends to set the conversion rate in qualifying alternative payment models at $33.59, an increase of 3.83%.
“This move reflects our continued shift toward smarter, data-informed policymaking,” said Chris Klomp, Deputy Administrator and Director of the Center for Medicare at CMS, in a press release. “We’re advancing technical improvements that reward high-quality, efficient care; addressing the root causes of unique health challenges; and aligning health care spending with value so that new innovations help to deliver better quality at a lower price.”
Ann Greiner, president and CEO of the Primary Care Collaborative (PCC), said she was pleased that CMS is examining underlying flaws in how Medicare pays for care in the 2026 Physician Fee Schedule proposed rule.
"After an initial review, we are encouraged CMS aims to tackle many of the core reasons Medicare—and the broader health system—has consistently underinvested in primary care and prevention. PCC will be reviewing the details of the NPRM with our members and responding by the September deadline," Greiner said in a statement. “Modernizing payment for Medicare primary care is vital, not just for seniors and disabled beneficiaries, but for all Americans. As the nation’s largest payer, Medicare’s payment priorities influence the payment policies of every other health care payer.”
"America clearly needs a reinvigorated national conversation about prioritizing preventing chronic disease and its complications, with whole-person primary care leading the way,” Greiner said.
The proposed rule also includes notable changes to the Medicare Shared Savings Program. For one, the rule makes adjustments to eligibility requirements that mandate accountable care organizations to have at least 5,000 assigned Medicare beneficiaries, offering greater flexibility.
These changes will be in place for agreements beginning on or after Jan. 1, 2027, CMS said.
The rule also takes aim at key performance measures for ACOs. The regulation would remove a health equity adjustment that plays a role in an accountable care organization's quality score starting in performance year 2025.
The goal, the agency said, is to "deduplicate scoring factors" and make quality scoring measures simpler.
MSSP ACOs are required to report data along the APP Plus quality measures as of 2025, and CMS is proposing changes to that metric set as well, including removing a measure related to screening for social drivers of health.
"The Trump Administration is committed to ensuring that participation in the Shared Savings Program will promote better chronic disease management and prevention, more efficient use of resources, promote innovation, and drive increased savings for the Medicare Trust Fund," per a fact sheet on the MSSP updates.
In addition to the payment-related proposals, the proposed rule puts an emphasis on "prevention and wellness." The agency said it will issue a request for information on ways to better improve prevention, wellness and chronic disease management, including approaches to nutrition and physical activity.
CMS said it will remove several program measures "that did not directly improve patient health outcomes" and instead add five new metrics centered on chronic conditions, including diabetes. The agency also proposed a new payment model called the Ambulatory Specialty Model that aims to better manage specialty care for beneficiaries who have heart failure or lower back pain.
The model aims to move "upstream" on these conditions to emphasize prevention, with participants held accountable for outcomes and savings.
The physician fee schedule also takes particular aim at an area of wasteful spending that CMS has identified around skin substitutes. The federal agency said Part B spending increased by nearly 40% from $252 million in 2019 to more than $10 billion in 2024.. Skin substitutes are increasingly a target for government officials. Medicare currently treats these therapies as "biologicals" for payment reasons, which can increase the payouts for them.
CMS instead is seeking to pay for skin substitutes as incident-to-supplies, which would likely reduce spending on these products by 90%.
“We are taking meaningful steps to modernize Medicare, cut waste, and improve patient care,” said CMS Administrator Mehmet Oz, M.D. in the press release. “We’re making it easier for seniors to access preventive services, incentivizing health care providers to deliver real results, and cracking down on abuse that drives up costs."
"This is how we protect Medicare for the next generation while helping Americans live longer, healthier lives," Oz said.
The proposed rule also addresses the Medicare Part B and Part D Drug Inflation Rebate Programs. It would create a "claims-based methodology to remove 340B units from Part D rebate calculations" at the start of next year.