The Trump administration has proposed a sweeping physician payment rule for Medicare, rewriting the payment system to comply with recent tax and policy law changes. The proposed rule includes a base rate hike of 2.5% and introduces new conversion factors for doctors participating in alternative payment models.
Key changes include:
* A more significant increase in payments for doctors in alternative payment models (APMs) compared to those not participating
* A reduction in efficiency adjustments for certain work RVUs, which could lead to inflated payments
* Updates to practice expense allocation, recognizing larger indirect costs for doctors in office-based settings
* Reforms to how Medicare pays for skin substitutes, reducing spending by nearly 90%
* A new mandatory payment model focused on disease management for Medicare beneficiaries with heart failure
The proposed rule also includes a significant change in the calculation of health equity adjustments, eliminating these measures and shifting focus towards improving wellness. The CMS has opened comments on the rule until September 12, seeking feedback on how to further deregulate and improve chronic disease management.
Doctor groups have expressed mixed reactions, with some welcoming the boost but viewing it as underwhelming compared to previous years of underpayment. Others support updates to practice expense allocation, recognizing larger indirect costs for doctors in office-based settings.
The proposed rule is a significant step towards modernizing CMS payment systems, eliminating perverse incentives, and harnessing better data to improve care for patients with chronic disease. However, the impact on specialty payments and site neutrality remains uncertain due to the varying impacts based on specialty and location.
Source: https://www.healthcaredive.com/news/medicare-2026-physician-payment-proposed-big-beautiful-bill/753033