Medicare in 2026: What You Need to Know
This overview for physicians, nurse practitioners, and other qualified healthcare professionals outlines key Medicare payment policies, programs, and initiatives for 2026.
2026 Medicare Conversion Factor (CF) and Other Payment Adjustments
Medicare CF
For the first time in five years, the Centers for Medicare and Medicaid Services (CMS) increased the CF. As required by law, CMS is releasing two CFs. Clinicians who meet participation thresholds in Advanced Payment Models (APMs) will receive a higher annual update (0.75%), while most others will receive a 0.25% update. The annual update to the CF is also affected by budget neutrality adjustments and a short-term patch approved by Congress.
For most clinicians, CMS finalized a CY 2026 CF of $33.4009, an increase from the CY 2025 CF of $32.3465.
For clinicians who met APM participation thresholds, CMS finalized a CY 2026 CF of $33.5675, up from $32.3465 in CY 2025.
For more information: CY 2026 Medicare Physician Fee Schedule Final Rule Press Release
Merit-based Incentive Payment System (MIPS) Adjustments
By statute, MIPS-eligible clinicians are subject to a +/-9% adjustment to their Part B claims based on their 2024 performance. In 2026, due to budget neutrality and other factors, the maximum positive adjustment is 1.05% - far belowthe +9% allowed by statute. The 2026 update is the lowest positive adjustment in program history.
For more information: Quality Payment Program (QPP) Website
Sequestration
All Medicare claims with dates of service or discharge on or after April 1, 2013, incur a 2% reduction in Medicare payment. This budget control tool, established by Congress, is currently set to continue through 2031. The reduction is applied to the Medicare payment amount after deductibles, coinsurance, and secondary payer adjustments are calculated. The reduction will continue in 2026 and appears on the remittance advice as adjustment code C0-253.
For more information: Medicare and Budget Sequestration
Geographic Practice Cost Index (GPCI) Floor for Physician Work
The 1.0 work GPCI floor is a temporary measure that prevents payment cuts in lower-cost-of-living areas that would otherwise receive a GPCI value below 1.0. This primarily affects rural providers. Congress has extended this floor until January 30, 2026.
For more information: 2026 Continued Appropriations Act
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Telehealth
Telehealth Flexibilities
Telehealth flexibilities that allow clinicians to provide remote services remain in place until January 30, 2026. Congress must extend these flexibilities, or Medicare beneficiaries will lose access to these services.
For more information: Telehealth.HHS.gov
Virtual Supervision
Effective January 1, 2026, supervising physicians and non-physician practitioners may permanently meet the “presence” and “immediate availability” requirements for direct supervision through real-time, two-way audio and video communication. This applies to supervising diagnostic tests, incident-to services, and other services. CMS also made permanent its policy allowing teaching physicians to use real-time, two-way audio and video to meet the presence requirement for resident-furnished telehealth services. These policies were made permanent in the CY 2026 Medicare PFS Final Rule.
For more information: CY 2026 Medicare Physician Fee Schedule Final Rule Press Release
E-Prescribing Flexibilities
Flexibilities that allow patients to receive prescriptions for controlled medications without a prior in-person visit have been extended through December 31, 2026. The Department of Health and Human Services (HHS) and the Drug Enforcement Administration are developing permanent policies.
For more information: HHS Press Release
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Payment Models
Models to Begin in 2026
These models are scheduled to begin in 2026.
WISeR (Wasteful and Inappropriate Service Reduction) Model: WISeR was created to address waste, fraud, and abuse in the Medicare program. CMS hired contractors to manage a prior authorization program for select services (e.g., skin and tissue substitutes, electrical nerve stimulator implants, and knee arthroscopy for knee osteoarthritis) under the Medicare fee-for-service program. These contractors will use technology, including artificial intelligence (AI), to run the program. WISeR will run from January 1, 2026, to December 31, 2031, in six states: New Jersey, Ohio, Oklahoma, Texas, Arizona, and Washington. The application period opened on June 27, 2025. More information is available HERE.
ACCESS (Advancing Chronic Care with Effective, Scalable Solutions) Model: ACCESS is a voluntary model that tests a new payment approach to expand access to technology-supported care for people with common chronic conditions, including hypertension, obesity, prediabetes, diabetes, chronic kidney disease, cardiovascular disease, chronic musculoskeletal pain, and depression or anxiety. ACCESS will begin on July 5, 2026, and run through June 30, 2036. CMS began accepting applications this month. On December 5, 2025, as part of an ACCESS collaboration, the Food and Drug Administration (FDA) announced the Technology-Enabled Meaningful Patient Outcomes (TEMPO) for Digital Health Devices Pilot. More information on ACCESS is available HERE. More information on TEMPO is available HERE.
BALANCE (Better Approaches to Lifestyle and Nutrition for Comprehensive Health) Model: The model aims to increase access to select glucagon-like peptide-1 (GLP-1) medications. CMS will negotiate drug pricing and coverage terms with manufacturers of GLP-1 medications on behalf of state Medicaid agencies and Medicare Part D plan sponsors. State Medicaid agencies can join the model in May 2026, and Part D plans can join in January 2027. Model testing will conclude in December 2031. More information is available HERE.
MAHA ELEVATE (Make America Healthy Again: Enhancing Lifestyle and Evaluating Value-based Approaches Through Evidence) Model: The model aims to address the chronic disease epidemic. It will focus on proactive, holistic, patient-centered functional or lifestyle medicine approaches to care, including nutrition, physical activity, sleep, stress management, avoidance of harmful substances, and social connections. The model will provide approximately $100 million to fund 3-year cooperative agreements for up to 30 proposals that promote health and prevention for Original Medicare beneficiaries. The model will launch on September 1, 2026. More information is available HERE.
GLOBE (Global Benchmark for Efficient Drug Pricing) Model:The GLOBE Model is a proposed mandatory model that would assess a rebate for certain drugs payable under Medicare Part B when prices exceed those paid in economically comparable countries. A proposed rule is open for comment until February 23, 2026. As proposed, GLOBE would be a 5-year model, launching on October 1, 2026, and running through 2031, with rebate invoicing and reconciliation continuing through 2033. More information is available HERE.
Medicare CBD Pilot Program Model: Through an executive order, President Trump announced a program under which Medicare will cover physician-recommended products containing hemp-derived compounds. Participants could receive up to $500 per year in coverage for these items at no charge if recommended by their doctor. The model is expected to last five to ten years and could begin as early as April 2026. More information is available HERE.
Models Announced but Not Scheduled to Begin Until 2027
These models have been announced but are not scheduled to begin until 2027. In 2026, CMS may make announcements, accept applications, or engage in other activities related to these models.
ASM (Ambulatory Specialty Model): The model is designed for specialists who treat low back pain or heart failure. It will run from January 1, 2027, to December 31, 2031. It will be mandatory in selected geographic areas. More information is available HERE.
GUARD (Guarding U.S. Medicare Against Rising Drug Costs) Model: The GUARD Model is a proposed mandatory model that would assess rebates for certain drugs payable under Medicare Part D if their prices exceed those paid in economically comparable countries. A proposed rule is open for comment until February 23, 2026. The GUARD Model would launch on January 1, 2027, and run through December 31, 2031, with rebate invoicing and reconciliation continuing into 2033. More information is available HERE.
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Policy Issues
Here are some key healthcare policy issues that are likely to dominate the discussion in 2026. Given the 2026 midterm elections and the current dysfunction and gridlock in Congress, most action is likely to occur at the regulatory and executive levels rather than through legislation.
Advancement of MAHA Priorities
In 2025, the Secretary of HHS advanced MAHA priorities through changes to vaccine panels, vaccine recommendations, dietary guidelines, project funding, and staffing at HHS agencies, among other actions. Assuming he continues to have President Trump’s support, his success in advancing MAHA priorities in 2025 suggests he will maintain this focus in 2026.
Payment Models
In 2025, the Trump Administration advanced its policy priorities by announcing several payment models through the Centers for Medicare and Medicaid Innovation. It is likely that the administration will continue to use payment models to drive policy changes and shift funding. Additional models could be announced in 2026.
AI Oversight
In 2026, the Administration will continue to focus on AI. Despite the President's objections, we will likely see more activity to advance regulations or standards at the state level rather than at the federal level. For clinicians, key issues will continue to include payment for AI technology, ensuring safety and efficacy, and liability protection. In 2025, the CPT Editorial Panel began discussing changes to the coding of AI-enabled medical services. As a result, we may see some changes here as well.
Ratesetting in the Medicare Physician Fee Schedule (PFS)
In the 2026 Medicare PFS Final Rule, CMS made significant changes to the ratesetting process by implementing an across-the-board 2.5% cut to the work RVUs of non-time-based codes and by rebalancing the practice expense (PE) formula, redistributing PE RVUs from facility-based to non-facility-based services. We may see more of these “big swings” to reform the PFS through the regulatory process in 2026.
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For more information and questions, please contact:
Sheila Madhani
Madhani Healthcare Consulting
Email: smadhani@madhani-health.com Tel:(202) 679-2977