Final Medicare Physician Fee Schedule Provides Favorable Changes for Primary Care Physicians

Still, ACP continues to call on Congress to address budget neutrality requirements and make telehealth flexibilities permanent

Nov. 21, 2025 (ACP) -- The final 2026 Medicare Physician Fee Schedule was released on Oct. 31 and includes several changes that the American College of Physicians believes value the primary and comprehensive care delivered by internal medicine physicians.

“ACP was encouraged to see that the Centers for Medicare & Medicaid Services finalized many of the proposed changes in the rule they released earlier this year,” said Dr. Jason M. Goldman, president of ACP.

There is still more work to be done regarding an “efficiency adjustment,” he noted, and federal budgetary policy will force some physicians to face payment cuts. Goldman also cautioned that telehealth flexibilities remain under threat.

Still, overall, “ACP is supportive” of the fee schedule, said Dejaih Johnson, ACP manager of regulatory affairs, and sees it as an important step in strengthening seniors' access to primary care.

Here is a look at aspects of the fee schedule that ACP is monitoring:

• Efficiency adjustment
  CMS introduced a 2.5 percent efficiency adjustment to work relative value units for most non-time-based services. “CMS is recognizing productivity gains and correcting longstanding overvaluations of non-time-based procedures,” Johnson said. “E/M (evaluation and management) services and time-based codes, commonly used in primary care, are excluded.”
  As she explained, “the new efficiency adjustment helps align payment with how care delivery has evolved. It boosts reimbursement for primary care, an area that's long been undervalued despite its importance in prevention and chronic disease management.”
  In addition, “CMS also updated its practice expense methodology to better reflect costs for office-based physicians,” she said. “This is especially helpful for independent practices and early-career physicians starting their own practices.”
  However, Johnson noted that “ACP remains concerned about the potential impact on some subspecialties and has urged CMS to phase in these changes.”
• Update of assignable primary care services under the Advanced Primary Care Management (APCM) model
  “CMS adopted new APCM add-on codes for behavioral health integration and Collaborative Care Model services, removing time-based requirements and easing documentation burdens,” Johnson said. “ACP supports these changes and continues to advocate for cost-sharing removal so patients aren't deterred by out-of-pocket costs. We also encourage CMS to fully integrate behavioral health services into broader value-based care arrangements.”
• Updated practice expense determination methodology
  “CMS is reducing the facility practice expense allocation to correct overvaluations that have disadvantaged primary care and independent practices,” Johnson said. “Redirecting resources toward more accurate reimbursement improves practice sustainability and supports greater equity across the system. ACP is urging CMS to continue working closely with physicians, especially independent practices, to ensure future refinements are transparent, data-driven and avoid unintended consequences.”

Despite these positive changes, budget neutrality, a requirement that increases in Medicare physician fee schedule spending must be balanced by reductions, “remains a core structural problem,” Johnson said.

“While Congress has provided short-term relief in recent years, long-term reforms are essential to stabilize Medicare physician payment,” she explained. “ACP continues to urge Congress to establish predictable annual updates and enact statutory reforms to address budget neutrality so physicians can continue providing high-quality care.”

Additionally, now that the federal government shutdown has ended, telehealth flexibilities -- including the removal of geographic restrictions -- have been reinstated through Jan. 30, 2026. Services provided during the shutdown will be paid retroactively.

However, “ACP's position is clear: Short-term extensions are not sustainable,” Johnson said. “Telehealth is now a core part of how care is delivered, and Medicare policy must reflect that. We need long-term, bipartisan legislation to provide stability for physicians and patients.”

The ACP Legislative Action Center is now featuring an action alert urging Congress to support the new efficiency adjustment and oppose efforts to block it. “Members can easily send a personalized message to their lawmakers,” Johnson said. “We strongly encourage all ACP members to participate in this important effort.”

Back to the November 21, 2025 issue of ACP Advocate