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Breaking: CMS finalizes fee disparity between facility and non-facility, sets two conversion factors

Effective Nov 3, 2025
Published Nov 3, 2025
Last Reviewed Nov 3, 2025
Your providers will see higher conversion factors (CF) in 2026, with a 3.8% boost to those participating in qualifying alternative payment models (APM) and a 3.3% increase for everyone else. Yet a yawning gap in reimbursement levels will confront practices in 2026, depending on whether your providers deliver care in the non-facility or facility setting.
 
CMS finalized many of its around-the-edges payment changes, including an efficiency adjustment and revisions to how the agency calculates the practice expense (PE) portion of relative value units (RVU), which help to finalize total payment rates, according to the final 2026 Medicare physician fee schedule released on Oct. 31.
 
New in 2026: 2 conversion factors
 
CMS will implement a two-tier conversion factor (CF) system in 2026 based on whether a provider participated in a qualifying APM. Those who participated in an APM in 2024 will net a 3.8% boost to their CF, which will land at $33.57, up from $32.35 in 2025.
 
Going forward, CMS will continue to base its CF attributions on the two-year-prior performance benchmark. Providers who did not participate in a qualifying APM will still see a boost to their CF, with a 3.3% increase year-to-year. The following chart shows the final conversion factors for physician fee schedule and anesthesia services, with a year-to-year adjustment between 2025 and 2026 rates.
 
Calculating the final CY 2026 PFS conversion factor (CF)
CY 2026 non-APM CF (final) CY 2025 non-APM CF YTY % change
$33.4009 $32.3465 +3.3%
CY 2026 Qualifying APM CF (final) CY 2025 Qualifying APM CF YTY % change
$33.5675 $32.3465 +3.8%
CY 2026 non-APM anesthesia CF (final) CY 2025 anesthesia CF YTY % change
$20.4976 $20.3178 +0.9%
CY 2026 Qualifying APM anesthesia CF (final) CY 2025 anesthesia CF YTY % change
$20.5998 $20.3178 +1.4%
 
There was a slight reduction in the final CF for 2026 compared to the proposed rates that CMS floated in July. The following chart shows how the final conversion factor compares to the rates in the proposed rule CMS issued earlier this year:
 
2026 Conversion Factors Final PFS Proposed PFS Final Anesthesia Proposed Anesthesia
Non-qualifying APM $33.4009 $33.4209 $20.4976 $20.5728
Qualifying APM $33.5675 $33.5875 $20.5998 $20.6754
 
But watch the RVU inputs
 
CMS also intends to go forward with an "efficiency adjustment" that will trim the work RVUs of thousands of codes and to reduce practice expense RVUs in the facility setting.
 
"The estimated impacts for specialties in the hospital-based setting are driven primarily by the proposed adjustment to indirect PE allocation in the facility setting and the proposed efficiency adjustment," CMS states in the final rule. "We note that several specialties appear on the specialty impacts table with both the largest projected increases in payment as well as the largest projected decreases in payment, split across the site of service differential."
 
Table D-B7 on page 1,738 of the 2,375-page rule provides stark proof of the fluctuating fee forecast for 2026. Internal medicine, the specialty with the largest amount of allowed charges at more than $9 billion, faces a dichotomous future: in the non-facility setting, internal medicine providers are projected for a +6% pay boost based primarily around PE RVU revaluations; yet internal medicine providers furnishing care in the facility setting are on track for a -8% pay cut for those encounters, again attributed to PE RVU cuts.
 
The efficiency adjustment is one of the more impactful factors on 2026 fees. It applies to all codes that are not based on time. "Included code families represent the procedures, diagnostic tests, and radiology services that CMS expects to accrue efficiencies over time as changes in medical practice occur, including changes in clinician expertise, workflows, and technology," the agency states in the final rule.
 
CMS offers further projections on the Part B fee picture in 2026. The following chart shows high-volume services and the year-to-year fee expectations per service, per setting.
 
Impact on CY 2026 Payment for Selected Procedures
CPT/ HCPCS MOD Short Descriptor Facility Non Facility
CY 2025 2 CY 2026 3 % Change CY 2025 2 CY 2026 3 % Change
11721   Debride nail 6 or more $22.97 $21.38 -7% $43.67 $45.09 3%
17000   Destruct premalg lesion $53.70 $48.10 -10% $66.31 $66.80 1%
27130   Total hip arthroplasty $1,259.25 $1,161.68 -8% NA NA NA
27244   Treat thigh fracture $1,206.52 $1,121.27 -7% NA NA NA
27447   Total knee arthroplasty $1,257.63 $1,159.68 -8% NA NA NA
33533   Cabg arterial single $1,789.08 $1,757.56 -2% NA NA NA
35301   Rechanneling of artery $1,071.32 $1,025.07 -4% NA NA NA
43239   Egd biopsy single/multiple $132.62 $123.58 -7% $357.11 $418.85 17%
66821   After cataract laser surgery $298.88 $275.56 -8% $319.91 $335.68 5%
66984   Xcapsl ctrc rmvl w/o ecp $521.75 $462.94 -11% NA NA NA
67210   Treatment of retinal lesion $478.40 $428.20 -10% $494.25 $517.38 5%
77427   Radiation tx management x5 $187.93 $196.73 5% $187.93 $196.73 5%
88305 26 Tissue exam by pathologist $34.93 $35.07 0% $34.93 $35.07 0%
90471   Immunization admin NA NA NA $20.05 $22.04 10%
90935   Hemodialysis one evaluation $67.93 $61.46 -10% NA NA NA
92012   Eye exam establish patient $47.87 $41.42 -13% $85.39 $90.52 6%
92014   Eye exam&tx estab pt 1/>vst $72.13 $62.13 -14% $120.98 $127.26 5%
93000   Electrocardiogram complete NA NA NA $13.91 $15.36 10%
93010   Electrocardiogram report $7.76 $8.35 8% $7.76 $8.35 8%
93015   Cardiovascular stress test NA NA NA $70.84 $73.48 4%
93307 26 Tte w/o doppler complete $41.40 $43.09 4% $41.40 $43.09 4%
93458 26 L hrt artery/ventricle angio $277.53 $287.25 4% $277.53 $287.25 4%
98941   Chiropract manj 3-4 regions $32.67 $28.06 -14% $38.49 $38.41 0%
99203   Office o/p new low 30-44 min $79.25 $71.48 -10% $109.01 $117.57 8%
99213   Office o/p est low 20-29 min $63.72 $57.45 -10% $88.95 $95.19 7%
99214   Office o/p est mod 30-39 min $93.80 $84.50 -10% $125.18 $135.61 8%
99222   1st hosp ip/obs moderate 55 $125.50 $116.90 -7% NA NA NA
99223   1st hosp ip/obs high 75 $167.23 $156.32 -7% NA NA NA
99231   Sbsq hosp ip/obs sf/low 25 $47.23 $44.09 -7% NA NA NA
99232   Sbsq hosp ip/obs moderate 35 $76.34 $70.48 -8% NA NA NA
99233   Sbsq hosp ip/obs high 50 $113.86 $106.88 -6% NA NA NA
99236   Hosp ip/obs same date hi 85 $199.58 $189.72 -5% NA NA NA
99239   Hosp ip/obs dschrg mgmt >30 $110.63 $106.55 -4% NA NA NA
99283   Emergency dept visit low mdm $68.25 $69.47 2% NA NA NA
99284   Emergency dept visit mod mdm $116.45 $118.24 2% NA NA NA
99291   Critical care first hour $205.72 $199.07 -3% $265.56 $308.96 16%
99292   Critical care addl 30 min $102.86 $100.20 -3% $115.48 $133.94 16%
99348   Home/res vst est low mdm 30 NA NA NA $74.07 $78.83 6%
99350   Home/res vst est high mdm 60 NA NA NA $177.91 $193.06 9%
G0008   Admin influenza virus vac NA NA NA NA NA NA
 
QPP, Shared Savings changes mostly intact from proposed
 
Most of the significant changes to the Medicare Shared Savings Program (MSSP) have been finalized in the rule, with a major emphasis on making it easier for new and slow-to-advance entrants to take on risk.
 
CMS proposes to reduce the length of time an ACO can participate in a one-sided model of the BASIC track from a maximum of seven performance years over two performance periods to five performance years in the first period starting in 2027. After that, the new ACO must sign up for Level E of the BASIC MSSP track for all performance years of the agreement period, or for the ENHANCED track.
 
Also, CMS will “increase flexibility” for these entrants regarding the minimum patient population of 5,000 assigned Medicare fee-for-service (FFS) beneficiaries required in MSSP benchmark years. In 2027, these ACOs can have fewer than 5,000 in their first two performance years, though they will lose some opportunities if they do. 
 
Risk-shy ACOs may also gain encouragement from a revised definition of primary care services used for purposes of beneficiary assignment. Starting in 2026, behavioral health integration and psychiatric collaborative care management add-on services will be added to the definition of primary care services.
 
Also, in a change from the proposed rule, CMS won’t pull the social determinants of health (SDOH) risk assessment code G0136 from its definition of “primary care services” used for the purposes of assignment, though its description will be revised from “Administration of a standardized, evidence-based social determinants of health risk assessment tool, 5-15 minutes” to “Administration of a standardized, evidence-based assessment of physical activity and nutrition, 5-15 minutes, not more often than every 6 months.”
 
The Alternative Payment Model (APM) Performance Pathway (APP) Plus quality measure set for Shared Savings Program ACOs will lose the Screening for Social Drivers of Health, and its Consumer Assessment of Healthcare Providers and Systems (CAHPS) for Merit-based Incentive Payment System (MIPS) Survey will change from a mail-phone administration protocol to a web-mail-phone administration protocol in 2027.
 
As in the proposed rule, CMS mandates big changes in the specialty-specific MIPS Value Pathways (MVP) model to which it hopes to transition the Quality Payment Program (QPP). The agency is adding six MVPs and also modifying all 21 of the existing MVPs. 
 
For the majority of participants who have yet to transfer to the MVP program, the Merit-Based Incentive Payment System (MIPS) threshold stays at 75 points through the CY 2028 performance period “to provide continuity and stability to program participants.” MIPS scoring weights and metrics for the 2026 period remain the same as in 2025.
 
A major shift is announced in the Advanced APM program: a modification of the methodology used to calculate QP status, which determines what clinicians can take part in that program and receive appropriate payment adjustments, will “include an individual calculation for all eligible clinicians in Advanced APMs.” Currently, CMS says, “an eligible clinician who has fully engaged with an Advanced APM may still be unable to earn QP status” due to the agency’s analysis of claims data, which may require a group to be registered as an APM entity, which may not meet program minimums even if an individual clinician within it does so.
 
In keeping with HHS’ wellness agenda, CMS is issuing “an RFI on well-being and nutrition measures in QPP.” It also authorizes other RFIs on the Prescription Drug Monitoring Program (PDMP) Measure and measures under the Public Health and Clinical Data Exchange objective (including on whether to change these from yes/no measures); on “how clinicians exchange health information”; and on digital quality measurement advances such as FHIR and how they affect electronic clinical quality measure (eCQM) reporting.
 
Advanced APM participants, defined as Qualifying APM Participants (QP) and non-QP clinicians in Advanced APMs, still have, respectively, 0.75% and 0.25% conversion factors.
 
This is a breaking news story. Stay tuned to future issues of Part B News for a comprehensive breakdown of the final 2026 Medicare physician fee schedule.
 

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