Major changes under the 2026 Physician Fee Schedule (PFS) Final Rule
- For calendar year(CY) 2026, CMS finalized a -2.5% efficiency adjustment for certain services (especially non-time-based services like surgeries, imaging interpretations, outpatient interventions). This means payment rates for many of these services will decrease or be adjusted downward to reflect assumed increased efficiency.
- CMS is also using more data (such as hospital outpatient prospective payment system data) to set relative values for certain technical services across settings, this may affect payments for services that cross between hospital/outpatient/physician office settings.
- For example, skin substitutes payment policy will change: for CY 2026 skin substitutes used in non-facility settings will be paid as incident-to supplies rather than as biologics under Part B, and a uniform payment rate is being finalised (~$127.28) for certain categories.
Implication for billing: Your team should check which services you provide may fall under these downward adjustments/efficiency edits, and ensure that any coding, setting (office vs hospital outpatient), and documentation reflects the correct site and service definitions.
Telehealth / Virtual Supervision Changes
- For CY 2026, CMS is finalizing changes to the telehealth services list: they will streamline the review process (removing distinction between provisional & permanent list), and simplify criteria (services furnished via two-way interactive audio-video).
- CMS is also permanently adopting a definition of “direct supervision” which allows the physician or supervising practitioner to provide supervision via real-time audio and visual interactive telecommunications (excluding audio-only) for certain incident-to, diagnostic test and rehab services.
Implication for billing: If your organization uses telehealth, remote supervision, or incident-to services under Medicare, you’ll want to document appropriately and ensure your billing reflects these updated definitions.
Medicare Advantage / Part D / Prescription Drug Changes
- CMS indicates that for 2026 the features of plan selection will be enhanced (for beneficiaries) via new tools: e.g., showing provider networks in the plan finder, supplemental benefit details, and an AI-powered prescription cost estimator.
- On the cost side: Average premiums for standalone Part D plans are expected to decrease (for some), but deductibles / out-of-pocket caps will shift. For example, the out-of-pocket cap for Part D drugs is projected to rise from ~$2,000 in 2025 to ~$2,100 in 2026.
- Also, fewer Medicare Advantage plan options in some counties: Several insurers are scaling back their offerings for 2026.
Implication for billing/coding: While these are more beneficiary-facing changes, they affect coverage landscapes (e.g., which plan, which network, which formulary) your billing team should monitor plan changes, network status and ensure eligibility verification is updated accordingly.
Drug Price Negotiation / Medicare Spending Controls
- Under the Inflation Reduction Act and related policies, Medicare will continue to expand its negotiated drug price programs. One source noted that by 2026, 10 high-cost prescriptions will have lower prices via Medicare negotiation.
- Also, CMS is placing greater focus on payment accuracy and reducing waste/abuse (e.g., in skin substitutes, wound care, high-growth supply categories).
Implication for billing: If your services involve Part B / Part D drugs, supply coding, or high-cost products, your team should stay aware of changes in how those items are reimbursed or categorized.
Eligibility/HEALTH PLAN Changes & Documentation Pressure
- With plan offerings shrinking in some markets, and more scrutiny on telehealth, supervision, product usage, etc., documentation and prior-authorization requirements may increase. For example, some sources note insurer pull-backs for MA plans may change provider networks and coverage.
- Also, open enrollment plan changes for 2026 may shift where beneficiaries are covered; it’s important to check eligibility and plan effective dates.
Implication for billing: Verification of coverage and the correct plan must be part of your claims process; changes in plan network status or coverage may increase denials if not addressed upfront.
If tracking, interpreting, and applying annual Medicare updates is stretching your internal staff thin, AMS can help. Let our experts manage the billing, so your team can focus on care.