Why providers are not satisfied with CMS’s outpatient medical insurance physician payment advice
The Medicare & Medicaid Service Center has launched a proposed rule that will increase Medicare outpatient payments next year and introduce key changes to how physicians are reimbursed. However, provider groups do not believe that these changes will benefit them in the long run.
The rules released last week will increase the Medicare payment rate for hospital outpatient services by 2.4% in 2026. This increase reflects a 3.2% market basket update, with CMS partially offsetting CMS with a 0.8% productivity adjustment.
The agency also proposed to pay a 2.4% payment for outpatient surgery centers in 2026.
The CMS proposal also introduces two different conversion factors for physician payments – one for clinicians participating in alternative payment models and the other for clinicians who do not. This change stems from the long-term provisions of the 2015 Medicare Access and CHIP Reauthorization Act (MACRA), which aims to transfer Medicare from reimbursement and value-based care for paid services to value-based care by encouraging providers to participate in the risk-based payment model.
In other words, if the rules proposed by the CMS take effect, the institution will use two separate conversion factors when calculating the physician’s payment rate on its involvement in value-based care arrangements. The proposal had a conversion factor for doctors in the alternative payment model at $33.59, which is a year-on-year increase of 3.8%, while the conversion factor for doctors in these models was $33.42, which is a 3.6% hike.
The American Academy of Family Physicians says the increase in payments makes it exciting — but worrying that it is not enough to help providers improve their profit margins in the long run.
“We also encourage CMS to propose an increase in conversion factor of 3.8% in 2026, with a conversion factor of 3.6% for qualified alternative payment models. However, most of the increase in 2026 is attributable to temporary adjustments to HR 1, which will be attributed to HR 1, which will expire at the end of the year. At the end of 2027, the practice will be with a little payment to make the effort of another group.
The American Medical Group Association also expressed concern that these incremental increases are associated with increased inflation and practice costs, which would lead to a decline in physician reimbursement over the years.
The team stressed that emergency solutions were not enough and advocated a basic overhaul of the Medicare physician fee program.
“Health systems and healthcare groups continue to bear the brunt of the repayment model,” AMGA CEO Jerry Penso said in a statement. “Without systematic reforms, Medicare’s current service fee framework will be missed by the shift to high-value care.”
Unless CMS implements comprehensive reforms, physician groups warn that temporary payment solutions will not be sufficient to protect the financial sustainability of health care or providers.
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