Conversion Factors
As required by statute, beginning in CY 2026, there will be two separate conversion factors: one for qualifying alternative payment model (APM) participants (QPs) and one for physicians and practitioners who are not QPs. By statute, QPs are those that meet certain thresholds for participation in an Advanced APM, which means generally that the payment model has features to ensure accountability for quality and cost of care.
The final CY 2026 qualifying APM conversion factor of $33.57 represents a projected increase of $1.22 (+3.77%) from the current conversion factor of $32.35. Similarly, the final CY 2026 nonqualifying APM conversion factor of $33.40 represents a projected increase of $1.05 (+3.26%) from the current conversion factor of $32.35. Per statutory requirements, we are also finalizing updates to the geographic practice cost indices (GPCIs) and malpractice RVUs.
Efficiency Adjustment
CMS is finalizing its proposal to use the Medicare Economic Index (MEI) productivity adjustment percentage. The MEI productivity adjustment is calculated by the CMS Office of the Actuary (OACT) each year, and we are finalizing a look-back period of five years, which would result in a final efficiency adjustment of -2.5% for CY 2026.
Telehealth Services
The rule permanently removes frequency limitations for subsequent inpatient visits, subsequent nursing facility visits and critical care consultations. For services that are required to be performed under direct supervision, CMS is permanently adopting a definition of direct supervision that allows the supervising clinician to provide such supervision through real-time audio and visual interactive telecommunications (excluding audio-only). Except for services that have a global surgery indicator of 010 or 090, a supervising practitioner may provide such virtual direct supervision for applicable incident-to services under § 410.26, diagnostic tests under § 410.32, pulmonary rehabilitation services under § 410.47, cardiac rehabilitation and intensive cardiac rehabilitation services under § 410.49.
CMS did not propose to extend its current policy to allow teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings, which had been in effect through December 31, 2025. However, the rule allows teaching physicians to have a virtual presence in all teaching settings, only in clinical instances when the service was furnished virtually, on a permanent basis.
Chronic Illness and Behavioral Health
The final rule creates optional add-on codes for Advanced Primary Care Management (APCM) services that would facilitate providing complementary behavioral health integration (BHI) or psychiatric Collaborative Care Model (CoCM) services. The rule also establishes three new G-codes to be billed as add-on services when the APCM base code is reported by the same practitioner in the same month. The services of the finalized add-on codes are meant to be directly comparable to existing CoCM and BHI codes.
To further support access to digital mental health treatment (DMHT) devices furnished incident to professional behavioral health services used in conjunction with ongoing behavioral health care treatment under a behavioral health treatment plan of care, the rule expands Medicare payment policies for DMHT services to also make payment for devices used in the treatment of Attention Deficit Hyperactivity Disorder (ADHD).
Skin Substitutes
The rule authorizes Medicare to pay for skin substitute products as incident-to supplies when they are used as part of a covered application procedure paid under the PFS in the non-facility setting or under the OPPS in the hospital outpatient department setting. CMS is also finalizing to align skin substitute categorization consistent with their FDA regulatory status, such as 361 Human Cells, Tissues, and Cellular and Tissue-Based Products (HCT/P) and the device types: Pre-Market Approvals (PMAs) and 510(k)s.