Last week, we provided a summary of key takeaways coming out of the 2026 Medicare Physician Fee Schedule (PFS) final rule. Today’s article is dedicated to dishing the dirt on the rest of the rule’s highlights that may be of some interest to many of our readers. Again, much of the below is based on a fact sheet provided by the Centers for Medicare & Medicaid Services (CMS) relative to the 2026 final rule.
Drugs and Biologicals
Average Sales Price: Price Concessions and Bona Fide Service Fees
For purposes of calculating the manufacturer’s average sales price (ASP), CMS is finalizing a new policy regarding pricing concessions and bona fide service fees (BFSFs), as follows:
- The term “bundled arrangement” is now defined, and clarity to manufacturers on how to account for bundled price concessions when calculating the manufacturer’s ASP is provided.
- Reasonable assumptions for the calculation of the manufacturer’s ASP will be required as a part of the quarterly ASP data submissions to CMS, including documentation of the methodology used to determine fair market value (FMV) for current, new and renewed BFSF contracts. However, CMS is not finalizing a revised definition of BFSF nor the standards and methodology that manufacturers should use to determine FMV.
- Third, we are finalizing to require verification from manufacturers that a BFSF is not passed on to a client, or customer of an entity for new and renewed BFSF contracts.
Average Sales Price: Units Sold at Maximum Fair Price
Pursuant to the final rule, units of selected drugs sold at the maximum fair price (MFP) are included in the calculation of the manufacturer’s ASP described in section 1847A(c) of the Social Security Act (the Act), effective January 1, 2026. For quarters in which Medicare payment is based on MFP, the Medicare Part B Drug Payment Limit File will display the MFP-based payment limit.
Autologous Cell-based Immunotherapy and Gene Therapy Payment
The final rule continues the existing bundled payment policy for CAR T-cell therapies and extends it to autologous cell-based immunotherapy and gene therapy, such that preparatory procedures for patient-specific cell or tissue procurement required for manufacturing are included in the product payment. However, CMS is not finalizing the proposal to prevent these payments from qualifying as BFSFs or to require their inclusion in ASP beginning January 1, 2026. Instead, manufacturer-paid preparatory services may be treated as BFSFs when the four-part test in 42 CFR 414.802 is satisfied and thus excluded from ASP.
Rural Health Clinics and Health Centers
The final rule adopts the optional add-on codes finalized under the PFS for APCM that would facilitate billing for BHI and Psychiatric Collaborative Care Model (CoCM) services when Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) are providing advanced primary care. Effective January 1, 2026, RHCs and FQHCs are required to report individual codes that make up both the CoCM and the Communications Technology-Based Services (CTBS) and Remote Evaluation Services, HCPCS codes G0512 and G0071, respectively.
The final rule contains a policy to pay for services that are established and paid under the PFS and designated as care management services as care coordination services for purposes of separate payment for RHCs and FQHCs. This policy better aligns Medicare policy across settings of care and improves transparency and predictability for RHCs and FQHCs. In addition, CMS is finalizing a policy for RHC and FQHC services requiring direct supervision, to permanently adopt a definition of direct supervision that allows the physician or supervising practitioner to provide such supervision through real-time audio and visual interactive telecommunications (excluding audio-only).
The final rule also finalizes policies for non-behavioral health visits furnished via telecommunication technology that allow RHCs and FQHCs to bill for RHC and FQHC services furnished using telecommunication technology by reporting HCPCS code G2025 on the claim, including services furnished using audio-only communications technology through December 31, 2026.
Medicare Prescription Drug Inflation Rebate Program
The Inflation Reduction Act of 2022 (IRA) (Pub. L. 117–169, enacted August 16, 2022) established requirements under which drug manufacturers must pay inflation rebates if they raise their prices for certain drugs payable under Part B and/or covered under Part D faster than the rate of inflation. CMS is finalizing new policies for the Medicare Part B Drug Inflation Rebate Program and Medicare Part D Drug Inflation Rebate Program (collectively referred to as the “Medicare Prescription Drug Inflation Rebate Program”) that include, but are not limited to, establishing a claims-based methodology to remove 340B units from Part D rebate calculations, starting on January 1, 2026. Additionally, CMS is establishing a Medicare Part D Claims Data 340B Repository (hereinafter, “340B repository”) for voluntary submissions by covered entities for Part D claims with dates of service on or after January 1, 2026, to allow CMS to begin usability testing for the 340B repository.
To view the entire 2026 PFS final rule, visit: https://www.federalregister.gov/public-inspection/current