Industry groups warn CMS’s 2026 fee schedule could undermine value-based care
The health care team responded to the CMS’s proposed 2026 physician fee plan, primarily concerned that it would require substantial revisions to avoid disrupting providers and undermining value-based care momentum.
The proposal, released in July, aims to build two new conversion factors – one for doctors with advanced alternative payment models (APMs) and the other for those who don't. CMS plans to raise APM interest rates by 3.83% in 2026, while non-APM interest rates will rise by 3.62%.
These increases reflect several factors – a small legal bump (0.75% for APM participants and 0.25% for others), a 2.5% overall increase required by recent legislation, and a 0.55% adjustment related to the proposed changes in the CMS-related physician work relative value units (WRVUS).
For 2026, CMS also recommends trimming payments by making a 2.5% “efficiency adjustment” to certain WRVs. Essentially, CMS believes that certain services can be delivered more effectively, so it is reducing the number of physician jobs for those services – WRVU is crucial to the way Medicare sets payment rates, so this adjustment will effectively reduce reimbursement for many affected codes.
Additionally, the agency’s program aims to reduce payments for indirect practice expenses for services provided in hospital facilities, arguing that providers in these settings face less indirect expenses than office-based practices. This change will reduce reimbursement for many facility-based services, while slightly increasing payments for care provided by physician offices.
The deadline for CMS's medical institutions to submit comments is September 12.
The Medical Group Management Association (MGMA) expressed strong opposition to the payment rate in the proposal in its letter. Although the organization appreciates the CMS proposal to add two newly introduced conversion factors, “this does not remedy previous cuts, as the policy is flawed, the physician community must absorb and does not address future cuts due to budget neutrality,” the MGMA wrote.
The organization also delayed cuts to WRVUS efficiency adjustments and indirect practice costs, saying both changes would unfairly punish providers and accelerate mergers.
Another industry group – National ACOS (NAACOS) – criticized CMS for participating in its Amburatory Specialty model, a value-based care program designed to incorporate specialists into the Medicare payment model to accommodate conditions such as heart failure and back pain.
In its proposal, CMS said that participation will be necessary, with the expert payments related to performance and patient outcomes, overlapping with other programs such as the Medicare Shared Savings Program (MSSP).
“Require experts in the ACO to participate exponentially increase administrative burden, create duplicate reporting requirements, and more importantly, inadvertently discourage experts from being unwilling to maintain and join the Advanced APM arrangement. The minimum provider should exclude qualified providers/partial qualified providers from the model or permitted to make them excluded from the model or permitted. [the ambulatory specialty model],” Naacos wrote in the letter.
In addition to structural and payment issues, medical groups have urged CMS to make better use of data.
The Prime Minister called on the agency to use data from performance-based contract arrangements to better provide coverage and reimbursement decisions for new digital health tools.
“Premier encourages CMS to interact with SaaS vendors and providers end users, who have collected and evaluated the evidence of the tool's impact on quality improvement and cost-effectiveness,” the company wrote.
Healthcare stakeholders will now wait to see how the agency responds to these comments and whether the final rule will address the questions they raise.
Photo: Seksan Mongkhonkhamsao, Getty Images
