CY 2026 PFS final rule: conversion factors and billing changes
CMS issued the CY 2026 physician fee schedule final rule (CMS-1832-F) on October 31, 2025, and the Federal Register published it on November 5, 2025. It sets Medicare physician payment for services on or after January 1, 2026.
Written by Salman Saeed, CEO and Co-Founder · Reviewed by a Certified Medical Coder · 
In short: the CY 2026 PFS final rule (CMS-1832-F, 90 FR 49266) took effect January 1, 2026. It sets conversion factors of $33.57 for qualifying APM participants and $33.40 for everyone else, and applies a 2.5 percent efficiency adjustment to non-time-based codes.
What did CMS publish, and when does it apply?
CMS announced the final rule on October 31, 2025, and the Federal Register published it on November 5, 2025 at 90 FR 49266. The document is CMS-1832-F, RIN 0938-AV50, titled CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies.
The regulations are effective January 1, 2026. That makes this the rule that pays 2026 claims under the Medicare Physician Fee Schedule for physicians and other billing practitioners. The proposal for the next year is covered in CMS proposes the CY 2027 physician fee schedule.
What changed for billing in 2026?
| Change | What the rule says | Applies from |
|---|---|---|
| Two conversion factors | The conversion factor splits in two. The CMS fact sheet gives $33.57 for qualifying APM participants and $33.40 for practitioners who are not, projected increases of $1.22 (3.77 percent) and $1.05 (3.26 percent) from $32.35. | January 1, 2026 |
| Efficiency adjustment | A final adjustment of -2.5 percent to work RVUs and intraservice time for non-time-based services. Time-based codes such as E/M, care management and behavioral health, services on the Medicare telehealth list and maternity codes with a global period of MMM are exempt. | CY 2026 |
| Telehealth | The telehealth list review is simplified, and frequency limits for subsequent inpatient visits, subsequent nursing facility visits and critical care consultations are removed permanently. | CY 2026 |
| Virtual direct supervision | Direct supervision may be met by real-time audio and video, never audio-only, except for services with a global surgery indicator of 010 or 090. | CY 2026, permanent |
| Skin substitutes | Paid as incident-to supplies when used in a covered application procedure, at a single rate of approximately $127.28 for CY 2026. | CY 2026 |
| Advanced primary care add-ons | Three new G-codes bill as add-ons when the same practitioner reports the APCM base code in the same month, for behavioral health integration or psychiatric Collaborative Care. | CY 2026 |
Who does this affect?
Every practice and group that bills Medicare under the fee schedule, including hospital-employed and emergency department physician groups. The fact sheet notes that facility-setting rates reflect only the practitioner's share of resources, so the practice expense change moves facility and office rates differently.
Procedure-heavy specialties feel the efficiency adjustment most, because time-based codes are exempt. On a modifier 25 claim the E/M is time-based, while the procedure may carry the adjustment. Family medicine billing shows how primary care claims line up with these changes.
What should billing teams do now?
- Check which conversion factor your claims use: $33.57 for qualifying APM participants, $33.40 for everyone else.
- Compare 2026 and 2025 work RVUs on your top procedure codes. Non-time-based codes carry the 2.5 percent adjustment unless exempt.
- Update supervision policies: real-time audio and video can meet direct supervision, audio-only cannot, and services with a 010 or 090 global indicator are excluded.
- If you bill skin substitutes in an office, change the workflow so the product is paid as a supply with the application procedure. Hospital outpatient departments follow the matching OPPS and ASC final rule.
- Review NCCI edits alongside the new rates, so a payment drop is not mistaken for an edit.
What is still open?
Nothing in this rule is open for comment, because it is a final rule. CMS issued separate fact sheets for the Quality Payment Program and the Shared Savings Program, which this post does not cover.
CMS proposed the CY 2027 rule on July 16, 2026. See the Medicare billing guide and medical billing for how Nucleus Align handles fee schedule changes.
- Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies (CMS-1832-F), 90 FR 49266 · Federal Register
- Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule (CMS-1832-F) · CMS
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Common questions
Straight answers from the team that does the work.
Ask a billing lead directly. A 20-minute call, Monday to Friday, 9am to 5pm Eastern.
01What is the 2026 Medicare physician fee schedule conversion factor?
The CMS fact sheet for CMS-1832-F gives $33.57 for qualifying APM participants and $33.40 for practitioners who are not. CMS projects increases of $1.22 (3.77 percent) and $1.05 (3.26 percent) from the 2025 factor of $32.35. Both apply to services furnished on or after January 1, 2026.
02What is the efficiency adjustment in the CY 2026 PFS final rule?
It is a final adjustment of -2.5 percent to the work RVUs and intraservice time of non-time-based services. CMS set it using the MEI productivity adjustment over a five-year look-back. Time-based codes, including E/M, care management, behavioral health and telehealth list services, are exempt.
03When was the CY 2026 PFS final rule published, and when did it take effect?
CMS issued it on October 31, 2025, and the Federal Register published it on November 5, 2025 at 90 FR 49266. The regulations are effective January 1, 2026, so the rates and policies apply to services furnished on or after that date.
04Can audio-only be used for virtual direct supervision?
No. The rule permanently allows direct supervision through real-time audio and visual interactive telecommunications and excludes audio-only. It does not apply to services with a global surgery indicator of 010 or 090, and teaching physician virtual presence is limited to services furnished virtually.
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