On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) published the annual Medicare Physician Fee Schedule (MPFS) proposed rule. The rule describes proposed payment, policy, and quality program changes for 2026 including several proposals which impact physiatry. AAPM&R is currently reviewing the rule in detail and will provide further updates in the coming weeks.
CMS is proposing two conversion factors for 2026, reflective of requirements established under the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015:
- $33.5875 (3.84 percent increase over the 2025 conversion factor) for Qualifying APM Participants.
- $33.4209 (3.32 percent increase over the 2025 conversion factor) for all other providers.
These conversion factors reflect a 2.5 percent temporary increase for 2026 provided under the One Big Beautiful Bill Act. They also reflect a positive budget neutrality update of 0.55 percent as well as MACRA positive adjustments of either 0.75 percent for Qualifying APM participants, or 0.25 percent for all other providers.
CMS is also proposing a 2.5 percent efficiency adjustment (decrease) to many work relative value units (RVUs). Work RVUs are a significant component of the total RVUs used to calculate payment. Time-based services, including evaluation and management (E/M) codes, will not be reduced under this new efficiency adjustment.
Further, CMS is proposing changes to practice expense which will impact many physiatry services. Academy staff is still analyzing these changes, but the overall impact according to CMS is an increase to practice expense RVUs in the non-facility (office-based) setting and a decrease to practice expense RVUs in the facility setting.
As a result of these changes, physiatrists practicing in an office setting and performing more E/M services may see increases in payment in 2026, while those practicing in a facility and performing more procedures will likely see payment reductions. The impact of the proposed policies on individual physiatrists will vary. Overall, CMS estimates that proposed payment policies for 2026 will result in a 2 percent decrease in payment for physical medicine and rehabilitation specialists. However, this estimate does not include some of the positive updates to the conversion factor.
Many additional proposals are included in the rule, including changes to the Medicare Quality Payment Program, and a proposal to create a new mandatory Ambulatory Specialty Model (ASM), which includes low back pain care and will include clinicians specializing in physical medicine and rehabilitation and pain management. Starting January 1, 2027, the ASM would require participating clinicians in selected geographic regions to report on a set of clinically relevant measures and activities and would adjust future Medicare Part B payments based on performance.
More information about the rule can be found on the CMS website including:
Members can direct any specific questions to healthpolicy@aapmr.org.