Medicare Payment Proposal Faces Pushback: What Physicians and Healthcare Groups Are Saying
Teh Centers for Medicare & Medicaid Services (CMS) recently proposed changes to the 2026 Physician Fee Schedule (PFS), sparking meaningful concern and opposition from across the healthcare industry. These proposed adjustments, impacting everything from reimbursement rates to value-based care participation, could have far-reaching consequences for physicians, hospitals, and ultimately, patient care.
Here’s a breakdown of the key proposals and the responses from leading healthcare organizations.
Proposed Changes: A closer look
CMS is aiming to refine how Medicare pays for physician services, focusing on efficiency and cost containment. Two major components of the proposal are drawing criticism:
* 5% Efficiency Adjustment to wRVUs: CMS believes certain services can be delivered more efficiently. This translates to a reduction in the work relative value units (wRVUs) assigned to those services, directly impacting reimbursement. wRVUs are essential to Medicare’s payment calculations, meaning even a small adjustment can have a substantial financial effect.
* Reduced Indirect Practice Expense Payments: The agency proposes lowering payments for indirect practice expenses – overhead costs – for services delivered in hospital facilities. The rationale is that hospital-based providers generally have lower overhead than those in autonomous offices. This would shift payments, slightly increasing those for office-based care while decreasing those for facility-based services.
Industry Response: Strong Opposition and concerns
The proposed changes have been met with strong resistance from physician groups and industry associations. The deadline for submitting comments was September 12th, and the feedback reveals deep concerns about the potential impact.
MGMA Voices Concerns Over Cuts and Budget Neutrality
The Medical Group Management Association (MGMA) expressed significant opposition to the proposed payment rates. While acknowledging CMS’s intention to increase conversion factors for two new services, the MGMA argues this doesn’t offset previous cuts or address potential future reductions driven by budget neutrality requirements.
The MGMA specifically criticized the efficiency adjustment to wRVUs and cuts to indirect practice expenses. They believe these changes will unfairly penalize providers and accelerate the trend of healthcare consolidation, potentially limiting patient access to care.
NAACOS Raises Alarm Over Mandatory Value-Based Care Participation
The National Association of acos (NAACOS) focused its criticism on CMS’s plan to mandate participation in the new ambulatory specialty model. This value-based care program aims to integrate specialists into Medicare payment models for chronic conditions like heart failure and back pain.
NAACOS argues that mandatory participation will create excessive administrative burden, duplicate reporting requirements, and discourage specialists from participating in other advanced Alternative Payment Models (APMs), such as the Medicare Shared savings Program (MSSP). They suggest excluding providers with qualified provider status or allowing voluntary opt-in.
Data Utilization: A Call for smarter decision-Making
Beyond structural and payment concerns, healthcare groups are urging CMS to leverage data more effectively. Premier, a leading healthcare betterment company, called on the agency to utilize data from performance-based contracting arrangements to inform coverage and reimbursement decisions for new digital health tools.
Premier advocates for CMS to collaborate with Software-as-a-Service (SaaS) vendors and providers to evaluate the impact of these tools on quality and cost-effectiveness. This data-driven approach could lead to more informed and beneficial coverage decisions.
What’s Next?
Healthcare stakeholders are now awaiting CMS’s response to the submitted comments. The final rule, expected in the coming months, will determine whether the agency addresses the concerns raised by the industry.
The outcome of this process will substantially shape the future of Medicare reimbursement and the delivery of healthcare services for years to come. It’s a critical moment for physicians, hospitals, and patients alike, as the proposed changes have the potential to reshape the healthcare landscape.
Key Takeaways:
* CMS is proposing changes to the 2026 PFS aimed at increasing efficiency and controlling costs.
* These changes include a 5% wRVU adjustment and reduced indirect practice expense payments.
* Industry groups like MGMA and NAACOS have voiced strong opposition, citing concerns about unfair penalties, administrative burden, and potential impacts on patient access.
* There’s a growing call for CMS to utilize data more effectively in its coverage and reimbursement decisions.
This is a developing story, and we will continue to provide updates as they become available.
