On October 31, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule (MPFS) final rule and fact sheet for CY 2026 (CMS-1832-F). This rule updates payment policies and payment rates for Part B services furnished under the MPFS, as well as makes changes to the Quality Payment Program (QPP). The addenda, including Addendum B, which lists the final relative value units (RVUs) for each CPT^® and HCPCS code can be found here. The list of codes subject to the negative 2.5% efficiency adjustment is included in the data files.  

CMS finalized significant policy changes that align with the administration’s efforts to curb fraud, waste, and abuse, and advance the agency’s Make American Healthy Again initiative. Some of the changes include new payment policy to negatively adjust work RVUs account for efficiency gains over time, creation of policy to cut practice expense amounts for services performed in the facility setting, expansion of behavioral health initiatives, and making permanent changes to some telehealth provisions.

Note that the page numbers listed in this document refer to the of the display copy final rule. Also, new CPT codes now have final code numbers assigned.

• CY 2026 MPFS Impacts on Urology Codes Compared with CY 2024 Rates (Facility and Non-Facility Rates)
• CY 2026 MPFS Impacts on Evaluation & Management Codes Compared with CY 2024 Rates (Facility and Non-Facility Rates)
• The AUA submitted comments on the proposed rule on September 12, 2025

Regulatory Impact Analysis

Conversion Factor for 2026

2026 marks the first year that there are two separate conversion factors: one for practitioners working in a qualifying advanced alternative payment model (APM) and the other for those not in a qualifying APM. The conversion factor for the former will increase to $33.57, an increase of 3.77%, and the latter to $33.40, an increase of 3.62%. These increases reflect the 2.5% increase to the conversion factor included in the reconciliation package adopted by Congress in July, and a 0.49% positive update to account for the redistributive effects of the finalized changes to work RVUs.

Specialty Level Impact of the Final Policy Changes – p. 1,738

CMS finalized two policies, an indirect practice expense calculation which creates a site of service payment differential and an efficiency adjustment, which place downward pressure on physician payment, even though Congress passed a 2.5% positive update to the conversion factor in 2026. Additionally, CMS has chosen to not use the new American Medical Association (AMA) Physician Practice Information Survey (PPIS) data for 2026 rate setting. The final policies lead to substantial variations in the impact percentages for both facility and non-facility (office) sites of service, with the office setting seeing positive changes to payment for certain physician services, while payment for physician services provided in the inpatient setting is reduced.

Table D-B7 of the rule (Appendix A of this summary) estimates the specialty level impacts of the policies included in the final rule and includes impacts of rate-setting changes and changes to RVUs within the budget neutral system. The impact of the final rule’s policies on group practices and individual physicians varies based on practice type, site of service, and the mix of patients and services provided.

Development of Strategies for Updates to Practice Expense Data Collection and Methodology – p. 53

Highlight: CMS thanks commenters for information on the AMA PPIS data for rate setting and remains interested in collecting data and cost shares information.

CMS is not using the AMA’s Physician Practice Information Survey (PPIS) survey data for rate setting calculations. Instead, the agency will maintain the current practice expense per hour (PE/HR) data and cost shares for 2026 rate setting. The agency reiterated reasons for not incorporating the updated PPIS data including low survey response rates and lack of representativeness, small sample size, lack of comparability to previous survey data, and missing or incomplete survey submissions.

As background, the PE/HR is the estimated cost per hour of operating a medical practice and varies from specialty to specialty. The PE/HR includes direct practice expenses like clinical staff wages, medical supplies, equipment and indirect expenses like rent, utilities, and administrative costs. The AMA RUC uses the PPIS to inform their recommendations to CMS regarding the practice expense component of a service’s total RVUs. Given that CMS will not use updated AMA PPIS data to update the PE/HR rates for each physician specialty, the PE/HR will remain at 2017 levels.

Updates to Practice Expense (PE) Methodology – Site of Service Payment Differential – p. 68

Highlight: Indirect practice expense RVUs for physician services performed in the facility setting will be cut by 50% under final policy.

CMS finalized payment methodology reducing indirect practice expenses (PE) by 50% within the physician payment formula. The policy states that for each service valued in the facility setting under the MPFS, the agency will reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to nonfacility PE RVUs beginning in CY 2026. According to the agency, this new policy reflects the current state of clinical practice with fewer physicians working in private practice settings, and therefore, “the allocation of indirect costs for PE RVUs in the facility setting at the same rate as the non-facility setting may no longer reflect contemporary clinical practice.”

This policy reallocates Medicare payments away from physicians who deliver services in facility-based settings and toward those who provide care in office or outpatient settings. Knowing how Medicare defines a “place of service” is critical for understanding how this policy will affect a physician’s reimbursement.

Examples of facility-based settings include inpatient hospitals, on-campus and off-campus outpatient departments, hospital emergency rooms, and ambulatory surgical centers. Examples of non-facility settings include physician offices, patients’ homes or private residences, assisted living facilities, pharmacies, and urgent care centers. A full list of place-of-service codes is available in the Medicare Claims Processing Manual, Chapter 12, Section 20.4.2.

The rule notes that an increasing number of physicians do not own their practices and are employed by hospitals, and therefore the indirect costs should not be the same in both the facility and non-facility setting. The agency does recognize that there are some indirect costs for physicians who are solely based in the facility setting like coding, billing, and scheduling activities. However, the agency does not believe that these indirect PE costs are the same for facility and non-facility-based physicians, and therefore, believes that cutting the indirect PE amounts in the facility setting by 50% will more accurately account for the costs incurred in each setting of care. The agency does agree that physicians do incur some indirect costs for services provided in the facility setting stating that “this is why we retained allocating significant amounts of indirect PE RVUs per work RVUs in the facility setting.” The agency believes that 50% is an overpayment for the indirect costs incurred in facility settings.

Finally, this change will not be phased-in over a four-year period as the agency has done for prior significant changes to the practice expense methodology. The agency notes that phasing in the policy would only allow distortions of site-of-service payments to continue, and delay increases to payments made for non-facility services.

Efficiency Adjustment – p. 182

Highlight: CMS finalizes controversial efficiency adjustment (i.e., payment cut) for nearly all services on the physician fee schedule and continues to take aim at the AMA RUC process.

CMS finalized the efficiency adjustment aimed at improving the accuracy of work RVUs and intraservice physician time estimates for non-time-based services. Specifically, CMS will apply an efficiency adjustment of –2.5% to the work RVUs and intraservice time for nearly all services on the MPFS including procedures, radiology services, and diagnostic tests. The adjustment will not apply to time-based services, including evaluation and management (E/M) visits, behavioral health services, maternity global codes, and care management services. In response to comments from stakeholders, new CPT codes (i.e., those effective January 1) will not be subject to the efficiency adjustment in 2026. Table 1 illustrates an example as to how the work RVUs and procedure time of surgical procedures are reduced through the efficiency adjustment. Although the reductions may appear small for each individual code, the cumulative impact over the course of a year will significantly affect overall reimbursement. Other services subject to the efficiency adjustment are listed here: Code List 2026.

Table 1. Effects of the Efficiency Adjustment Policy

CPT Code	Descriptor	Current Work RVU	Adjusted Work RVU	Current Time	Adjusted Time
52000	Cystourethroscopy (separate procedure)	1.53	1.49	40.00	39.75
52356	Cystourethroscopy, with ureteroscopy and/or pyeloscopy; with lithotripsy including insertion of indwelling ureteral stent (eg, Gibbons or double-J type)	8.00	7.80	133.00	131.50

Per CMS, the efficiency adjustment is meant to account for efficiency gains over time as practitioners become more skilled at performing procedures, and therefore, are performing those procedures faster than the intraservice times recommended by the RUC and used by CMS in rate setting. The agency continues to believe that the RUC survey process is flawed due to low response rates and the perceived conflicts of interest of those who take RUC surveys and reiterated this stance in the final rule. Additionally, throughout the responses to comments, CMS repeats that they welcome empiric data to support the value of physician services, which is yet another indication that CMS does not want to rely solely on RUC survey data to set payment rates. CMS states “we believe that robust empiric data is important to avoid some of the shortcomings of survey data in accounting for efficiencies over time.”

Many commenters stated that intraservice times are in fact increasing, contrary to CMS’s position, due to ever increasing patient complexity created by increased average body mass index and a higher number of chronic conditions per patient. To counter this comment, the agency reminds stakeholders that there are codes that may be used to report services for care management and care coordination for patients with complex health needs which could be used to account for increasingly complex patients. It may be inferred that the agency believes that the use of CPT codes associated with non-complex and complex care management (CCM) and principal care management (PCM) can fill the gap left by efficiency adjustment.

The agency was persuaded by comments to remove diagnostic, prophylactic, or therapeutic intravenous infusion services from the efficiency adjustment code list. Stakeholders noted that infusion rates are recommended on the required FDA labeling for chemotherapy and other infusion drugs, and therefore cannot become more efficient or delivered at faster rate. However, the agency did not say the codes would be removed permanently indicating in the rule that “we are removing time-based, drug administration codes from the list of codes to which the efficiency adjustment will apply in CY 2026. Stakeholders will need to remain vigilant to ensure the codes for these services are not added to the list for 2027.

To determine the percentage of the efficiency adjustment, the –2.5% was derived from the five-year cumulative productivity adjustment embedded in the Medicare Economic Index (MEI), which CMS believes reflects a reasonable approximation of the efficiency gains throughout services on the MPFS. The MEI is “a measure of inflation faced by physicians with respect to their practice costs and general wage levels, and includes inputs used in furnishing physicians’ services such as physician’s own time, non-physician employees’ compensation, rents, medical equipment, and more.” This is important to note because comments submitted specifically call out that it is unreasonable for CMS to use the MEI and productivity adjustment to determine if an efficiency adjustment is warranted when the physician fee schedule does not have associated yearly payment increases, quite unlike other payment systems in the Medicare program. CMS was again unmoved by these arguments and will finalize the policy.

CMS will use the MEI to revise the efficiency adjustment as needed and will update the adjustment amount every three years. That means the efficiency adjustment may not be -2.5% in three years’ time, it could be higher or lower.

Geographic Practice Cost Indices (GPCIs) – p. 560

Highlight: Updated GPCI data will be phased in over two years.

CMS finalized updates to the GPCIs using more current data on wages, rent, equipment, and insurance to better reflect local cost differences and will continue to use existing MEI cost share weights for practice expense calculations in 2026.CMS finalized new GPCIs as proposed, to be phased in over two years beginning in CY 2026. In addition, CMS finalized the geographic adjustment factor (GAF) for each PFS locality. Addenda D and E list the final CY 2026 GPCIs and GAFs by state and Medicare locality. For more information and a detailed explanation of the GPCIs, see page 560 of the final rule.

Payment for Medicare Telehealth Services under Section 1834(m) of the Act – p. 135

Highlight: CMS modified the process to add services to the telehealth list and made permanent direct supervision of incident-to services.

Modification of the Medicare Telehealth Services List and Review Process – p. 136

CMS finalized the proposal to simplify the telehealth review process by removing steps 4 and 5 of the review process and focusing on whether a service can be furnished using an interactive telecommunications system. Step 4 had previously assessed whether the elements of the requested service map to those of services on the list with permanent status, while step 5 had previously assessed whether there is evidence of clinical benefit analogous to the clinical benefit of the in-person service when the patient receives the service by telehealth. The agency believes that the complex professional judgment of the physician or practitioner is sufficient to ensure that a service can be safely furnished via telehealth and that the service will be clinically beneficial to the patient. Moving forward, services on the Medicare Telehealth Services List will be included on a permanent basis; there will no longer be a provisional basis for including services. The process and decision-making parameters that the agency uses to make determinations as to whether a code(s) may be placed on the telehealth service list is found on page 139 of the final rule.

Requests to Add Services to the Medicare Telehealth Services List for CY 2026

The agency received several requests to add services to the Medicare Telehealth Services List, which can be found in Table A-D1, page 143 in the final rule.

Telemedicine E/M Services – p. 151

CMS received a request to add the telemedicine E/M services (CPT 98000-98015) to the Medicare Telehealth Services List. Since these services are not separately payable under the Medicare PFS and are assigned service indicator I (not valid for Medicare purposes), the agency is not adding these services.

Frequency Limitations on Medicare Telehealth Subsequent Care Services in Inpatient and Nursing Facility Settings, and Critical Care Consultations – p. 154

CMS will permanently remove frequency limitations on furnishing services via telehealth for the codes listed on page 156 of the final rule relating to subsequent inpatient visits, subsequent nursing facility visits, and critical care consultation services. The agency reiterates that physicians and practitioners can use their complex professional judgment to determine whether they can safely furnish a service by telehealth.

Direct Supervision via Use of Two-way Audio/Video Communications Technology – p. 158

CMS will permanently allow certain services to be furnished under direct supervision that allows the immediate availability of the supervising practitioner using audio/video real-time communications technology (excluding audio-only). This would apply to all services provided incident-to a physician services, except for services with a global surgery indicator of 010 or 090. The agency will apply this definition to the applicable cardiac, pulmonary, and intensive cardiac rehabilitation services.

Proposed Changes to Teaching Physicians’ Billing for Services Involving Residents with Virtual Presence – p. 165

CMS had proposed to transition back to the pre-Public Health Emergency (PHE) policy and to not extend the current policy that allows teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings. However, the agency received many comments in support of allowing teaching physicians to have a virtual presence, arguing that the policy has been effective, safe and educationally sound. The agency is finalizing to permanently allow teaching physicians to have a virtual presence in all teaching settings, only in clinical instances where the service is a telehealth visit (i.e., a 3-way telehealth visit, with the teaching physician, resident, and patient in separate locations). This will continue to allow teaching physicians to have a virtual presence during the key portion of the Medicare telehealth service3 for all residency training locations.

Telehealth Originating Site Facility Fee Payment Amount Update – p. 170

For CY 2026, the final payment amount for HCPCS code Q3014 (Telehealth originating site facility fee) is $31.85.

Distant Site Requirements – p. 162

CMS received comments requesting that the agency provide clarification on policies related to telehealth. Several commenters expressed concern with the expiration of the flexibility for telehealth practitioners to use their currently enrolled address instead of their home address. The agency issued a FAQ that provides additional information on how to suppress street address details as providers continue to use their currently enrolled practice location instead of their home address and does not believe that additional extensions are required through rulemaking. Any future updates to this policy will be made through subregulatory guidance.

Valuation of Specific Codes – p. 162

Each year, CMS receives work and practice expense RVU recommendations from the AMA RUC for new and revised CPT codes. The agency reviews these recommendations for inclusion in the fee schedule.

Temporary Female Intraurethral Valve-Pump (CPT codes 0596T and 0597T) – p. 218

Effective January 1, 2026, CMS three new supplies will be added to the practice expense database for services associated with the use of female intraurethral valve pumps, CPT codes 0596T (Temporary female intraurethral valve-pump (ie, voiding prosthesis); initial insertion, including urethral measurement) and 0597T (Temporary female intraurethral valve-pump (ie, voiding prosthesis); initial insertion, replacement). The new supplies are the inFlow Measuring Device, the inFlow Valve Pump Device, and the inFlow Activator Kit. The PE values for this service will now be more accurately reflected in the overall payment rate.

Irreversible Electroporation of Tumors (CPT codes 47384 and 55877) – p. 246

The CPT Editorial Panel created and the RUC subsequently surveyed CPT codes to report irreversible electroporation of tumors located in the liver and pancreas. The CPT code descriptors are

47384 (Ablation, irreversible electroporation, liver, 1 or more tumors, including imaging guidance, percutaneous and 55877 (Ablation, irreversible electroporation, prostate, 1 or more tumors, including imaging guidance, percutaneous). The AUA participated in the RUC survey for CPT code 55877. CMS finalized the work RVUs for both services: 9.41 wRVU for code 47384 and 13.50 for code 55877. Additionally, CMS accepted the RUC recommended direct PE inputs without modification.

Transurethral Robotic-assisted Resection of Prostate (CPT codes 52500, 52601, 52630, 52648, 52649, and 52597) – p. 250

Effective January 1, there is a new CPT code to report services for the transurethral robotic-assisted waterjet resection of the prostate, including the use of ultrasound guidance. The new code 52597 (Transurethral robotic-assisted waterjet resection of prostate, including intraoperative planning, ultrasound guidance, control of postoperative bleeding, complete, including vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, and internal urethrotomy, when performed) was surveyed by the AUA along with other CPT codes with the family. Typically, the RUC requires that all codes in a family are surveyed when a new code is created or revised, and that was the case for CPT codes 52500, 52601, 52630, and 52649. CMS accepted the RUC recommended work RVU for the new code (52597) and for all but one of the resurveyed codes (52649).

The agency finalized a work RVU of 13.00, 1.36 RVUs lower than the RUC recommended value for CPT code 52649 (Laser enucleation of the prostate with morcellation, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed)). CMS disagreed with the RUC recommended work RVU of 14.56 and asserts that a lower value of 13.00, crosswalked from CPT code 53500 (Urethrolysis, transvaginal, secondary, open, including cystourethroscopy (eg, postsurgical obstruction, scarring) is more appropriate. CMS states in the rule “the RUC-recommended work RVU of 14.56 is too high and should be lowered due to the decrease in intraservice time of 30 minutes (from 120 minutes to 90 minutes), and the decrease in total time by 16 minutes (from 279 minutes to 263 minutes).”

The AUA submitted comments opposing the decrease in work RVUs for 52649, stating this procedure “involves laser enucleation to remove a majority of the patient’s prostate adenoma from the inside out, as opposed to the other procedures in this family. The concern for rectal injury caused by posterior perforation of the capsule is significantly higher, due to the inside-out approach that occurs with laser enucleation of the prostate. This approach allows a greater amount of prostate tissue be removed but significantly increases the difficulty and intensity required to perform this service compared to other services in the code family.” The agency did publish some of the AUA’s comments in the discussion of this code family which indicates that agency did indeed read the association’s comment letter. However, CMS did not agree with the AUA citing that the significant decrease in time should be reflected in a decrease to the work RVU and that maintaining the current RVU of 14.56 would place the code out alignment with the rest of the code family.

CMS accepted the RUC recommended practice expense inputs without refinement for all codes surveyed except for 52648 (Laser vaporization of prostate, including control of postoperative bleeding, complete (vasectomy, meatotomy, cystourethroscopy, urethral calibration and/or dilation, internal urethrotomy and transurethral resection of prostate are included if performed). CMS removed six minutes of clinical labor time associated with procedures/services not related to physician work time, therefore six minutes of equipment time was removed for use of an exam table. Finally, the agency removed the biopsy cup from the supply items since the service is performed only in the facility setting.

Cystourethroscopy (CPT code 52443) – p. 256

Category III CPT code 0619T was converted to Category I CPT code 52443 (Cystourethroscopy with initial transurethral anterior prostate commissurotomy with a non-drug-coated balloon catheter followed by therapeutic drug delivery into the prostate by a drug-coated balloon catheter, including transrectal ultrasound and fluoroscopy, when performed). CMS supported the RUC recommended work RVU of 3.62 for this service, but in the proposed rule did not accept all the practice expense inputs. The AUA submitted comments describing the need for the all the RUC recommended PE inputs. After reviewing the comments, CMS finalized refinements to the practice expense inputs for code 52443 will implement these additional practice inputs:

• Additional 5 minutes of non-multi-tasking monitoring by clinical staff.
• Additional 10 minutes of equipment cleaning time.
• Include an additional sanitizing wipe for cleaning the transrectal ultrasound probe.

Prostate Biopsy Services (CPT codes 55705, 55706, 55707, 55708, 55709, 55710, 55711, 55712, 55713, 55714, 55715, and 76872) – p. 262

The AUA was instrumental in revising the new prostate biopsy code set effective January 1 to reflect current clinical practice for prostate biopsy services after two codes, 55700 (Biopsy, prostate; needle or punch, single or multiple, any approach) and CPT code 76872 (Ultrasound, transrectal;) were referred to the CPT Editorial Panel for revisions. The CPT Editorial Panel deleted CPT code 55700, revised CPT code 55705, and created nine new CPT codes. The AUA surveyed the resultant code family. However, concerns remain as to the clarity of the code set and given these concerns, the AUA is collaborating with the CPT Editorial Panel to revise the code set yet again. For 2026, CMS accepted all the RUC recommended work and practice expense RVUs for prostate biopsy family, which AUA anticipates will only be in effect for one year.

Laparoscopic Prostatectomy (CPT codes 55840, 55842, 55845, 55866, 55867, 55868, and 55869) – p. 263

Two new codes, effective January 1, 2026, were created to report services for laparoscopic prostatectomy. CPT codes 55868 (Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed; with lymph node biopsy(ies) (limited pelvic lymphadenectomy) and 55869 (Laparoscopy, surgical prostatectomy, retropubic radical, including nerve sparing, includes robotic assistance, when performed; with bilateral pelvic lymphadenectomy, including external iliac, hypogastric, and obturator nodes) were surveyed by the AUA. CMS finalized the RUC recommended practice expense inputs for all the codes except 55867 which was slightly refined by CMS and the AUA supported this change., which the AUA supported. However, CMS finalized a work RVU for code 55869 that is lower than the value recommended by the RUC and the AUA.

CMS finalized a work RVU of 27.41 for CPT code 55869, instead of 29.35 recommended by the RUC. The agency does not agree with the RUC recommended crosswalk to CPT code 27059 (Radical resection of tumor (for example, sarcoma), soft tissue of pelvis and hip area; 5 cm or greater) and instead have finalized a crosswalk to code 50543 (Laparoscopy, surgical; partial nephrectomy). The AUA submitted comments refuting this crosswalk noting that “55869 is a surgery that involves not only removal of an organ (prostatectomy), but it also involves a comprehensive lymph node dissection. This means additional efforts to dissect around the obturator nerve, iliac vessels, and along the aorta itself, to comprehensively remove these lymph node packets. These are different surgical spaces throughout the pelvis and lower abdomen, different form the deep pelvis for the site of prostatectomy.” CMS continues to support the work RVU as noted by its crosswalk code and will finalize 27.41 work RVUs for 55869.

Remote Monitoring (CPT codes 98975, 98976, 98977, 98978, 98980, 98981, 98984, 98985, 98986, 98979, 99091, 99453, 99454, 99457, 99458, 99473, 99474, 99445, and 99470) – p. 330

At the September 2024 CPT Editorial Panel meeting, several revisions were made to the remote monitoring services code set to increase flexibility in reporting these services and to better align with current clinical practice. These changes impact both remote physiologic monitoring (RPM) and remote therapeutic monitoring (RTM) services, and includes the creation of new codes, while clarifying descriptors and coding requirements for others. CMS finalized these services, associated RVUs and practice inputs and hence the codes will be ready for use beginning January 1, 2026. Appendix B of this summary provides final code numbers and descriptors for these services.

Social Determinants of Health Risk Assessment - HCPCS code G0136 - 460

Highlight: CMS does not delete G0136 but instead reframes the data to be captured by the code.

CMS proposed to delete HCPCS code G0136 (Administration of a standardized, evidence-based social determinants of health risk assessment tool, 5-15 minutes, not more often than every 6 months) created by the agency in 2024 to capture work and provide payment for services associated with the administration of a standardized, evidenced based social determinants of health risk assessment tool. The agency stated that the work associated with G0136 may already be accounted for in other types of services like evaluation and management visits.

However, after considering stakeholder comments, CMS has decided to keep HCPCS code G0136 and replace the terms evidenced-based social determinants of health risk assessment with physical activity and nutrition. The code’s descriptor now reads - Administration of a standardized, evidence-based assessment of physical activity and nutrition, 5-15 minutes, not more often than every 6 months. This change, per CMS, refocuses the goal of the type of assessment that must be conducted to report this service and is intended to support CMS’ efforts to address the root causes of chronic disease through the evaluation of essential lifestyle factors. Per the agency “while the root causes of chronic disease are often multi-factorial and holistic, tailored interventions may be optimal, and assessing risk related to the root causes of many chronic conditions begins with assessing essential, common behaviors such as physical activity levels and nutrition (that is, diet composition).”

CMS emphasizes that this assessment should be used to inform the diagnosis and treatment plan during an associated E/M or behavioral health visit, and practitioners are expected to incorporate the results into their medical decision-making and refer patients to relevant resources. The service has a work RVU of 0.18 and may be provided via telehealth.

Community Health Integration (CHI) Services - HCPCS Code G0019 p. 465

Highlight: CMS removes the term “social determinants of health” from the code descriptor for G0019.

Effective January 1, 2026 CMS will replace the term “social determinants of health” with the term “upstream drivers of health” in the descriptor for HCPCS code G0019 (Community health integration services performed by certified or trained auxiliary personnel, including a community health worker, under the direction of a physician or other practitioner; 60 minutes per calendar month, in the following activities to address upstream driver(s) that are significantly limiting ability to diagnose or treat problem(s) addressed in an initiating visit). CMS believes the term upstream drivers “encompasses a wider range of root causes of the problems that practitioners are addressing through CHI services. This type of whole-person care can better address the upstream drivers that affect patient behaviors (such as smoking, poor nutrition, low physical activity, substance misuse, etc.) or potential dietary, behavioral, medical, and environmental drivers to lessen the impacts of the problem(s) addressed in the CHI initiating visit.”

Strategies for Improving Global Surgery Payment Accuracy – p. 540

Highlight: CMS maintains the status quo to collect data on the global surgical package concept.

A recent OIG report on the global surgical package coupled with the administration’s efforts to reduce fraud, waste, and abuse, put the global surgical payment concept back in the spotlight. With this rule, CMS reiterated its stance that not all post-operative visits included in the valuation of a surgical procedure are provided to patients during the global period, and therefore many surgical procedures are overvalued.

Given that the agency did not propose any changes to payment for surgeries valued as global surgery package procedures, the policy implemented last year to assist with data collection on the global surgical package remains as is. The agency will continue to collect data on when and by whom a post-operative service is provided using modifier -54 (surgical care only) and HCPCS code G0559 (postoperative care services furnished by a practitioner other than the one who performed the surgical procedure (or another practitioner in the same group practice).

Drugs and Biological Products Paid Under Medicare Part B – p. 589

Highlight: CMS finalized a definition of bundled arrangement and updated requirements for ASP data submissions.

Requiring Manufacturers of Certain Single-Dose Container or Single-Use Package Drugs to Provide Refunds with Respect to Discarded Amounts

Section 90004 of the Infrastructure Investment and Jobs Act requires manufacturers to provide a refund to CMS for certain discarded amounts from a refundable single-dose container or single-use package drug for each calendar quarter starting January 1, 2023. Manufacturers can apply for an increased applicable percentage for a drug when unique circumstances apply. The agency received two applications to be considered for increased applicable percentage for CY 2026: the manufacturer of Leukine® and Jelmyto®. CMS did not finalize an increase in the applicable percentage for either Leukine or Jelmyto in this cycle.

Average Sales Price: Price concessions and bona fide services fees

Drugs payable under Medicare Part B fall into three categories: 1) those furnished incident-to a physician’s services; 2) those furnished via a covered item of durable medical equipment; and 3) other drugs for which coverage is specified by statute, such as vaccines. For most drugs separately paid under Medicare Part B, payment is based on the average sales price (ASP) plus a 6% add-on.

As part of the calculation of the manufacturer’s ASP, the manufacturer must deduct price concessions such as volume discounts, prompt pay discounts, cash discounts, free goods that are contingent on any purchase requirement, chargebacks, and rebates. However, bona fide service fees (BFSFs) are not considered price concessions and are not deducted when calculating the manufacturer’s ASP. BSFS’s are defined as fees paid by a manufacturer to an entity that represents the fair market value for an itemized service performed on behalf of the manufacturer, and the fees are not passed on to the client.

CMS is concerned that there may be discrepancies in how manufacturers define BFSF’s and what is a concession. However, after receiving feedback from commenters, the agency did not move forward with regulatory text to specify when certain fees are considered price concessions, or the proposed revised definition of BFSFs. The agency will encourage manufacturers to document in their reasonable assumptions which service fees are tied to costs that do not depend on the drug’s price or volume, and which service fees do. The agency did not finalize the proposal to assess fair market value (FMV) methodology standards, reassessments, and independent third-party valuator requirements.

CMS finalized a proposal to require manufacturers to submit reasonable assumptions that they utilize for ASP calculations, as well as requiring manufacturers to submit a warranty or certification from the recipient of a fee that it is not passed on in whole or in part. The agency will provide a template of the reasonable assumptions letter for manufacturers to document FMV analyses.

CMS finalized a definition of the term “bundled arrangement” to state that “bundled arrangement means an arrangement regardless of physical packaging under which the rebate, discount, or other price concession is conditioned upon the purchase of the same drug or biological or other drugs or biologicals or another product or some other performance requirement (for example, the achievement of market share, inclusion of tier placement on a formulary), or where the resulting discounts or other price concessions are greater than those which would have been available had the bundled drugs or biologicals been purchased separately or outside the bundled arrangement.” To remain consistent with the Medicare Drug Rebate Program, the agency removed “purchasing patterns” and “prior purchases” from the definition in the proposed rule. CMS plans to further implement this policy area in rulemaking next year.

Medicare Prescription Drug Inflation Rebate Program – p. 1,146

Highlight: CMS finalizes policies to implement the Medicare Prescription Drug Inflation Rebate Program.

Overview of the Medicare Prescription Drug Inflation Rebate Program

Sections 11101 and 11102 of the Inflation Reduction Act established requirements that 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 finalized the proposal to describe how the agency would identify the payment amount in the benchmark quarter if data were unavailable to calculate the payment amount in that quarter. CMS also finalized policy to calculate the payment amount if there is no published payment limit and neither positive ASP nor positive Wholesale Acquisition Cost (WAC) data are available in the ASP Data Collection System.

Under Section 428.203(b)(2), for claims with dates of service on or after January 1, 2026, CMS will exclude from the total number of units used to calculate the total rebate amount for a Part D drug those units for which a manufacturer provided a discount under the 340B program. CMS finalized the proposal to use a claims-based methodology to implement this section.

CMS established a 340B repository to receive voluntary submissions from 340B covered entities of certain data elements from Part D 340B claims.

Drugs Covered as Additional Preventive Services (DCAPS)

Starting on September 30, 2024, CMS established coverage of Preexposure Prophylaxis (PrEP) using antiretroviral therapy to prevent HIV infection as an additional preventive service under the Social Security Act, which is referred to as DCAPS. CMS finalized the proposal to identify DCAPS as Part B rebatable drugs and will calculate rebates based on the current methodology.

Updates to the Quality Payment Program and Medicare Promoting Interoperability Program – pg. 1,431

CMS has revised the definition of MVP participant, subgroup reporting requirements, MVP registration, and performance category scoring. Additionally, the policies outlined in this final rule aim to support CMS’ goal of phasing out traditional MIPS and transitioning to MVP reporting. However, CMS has not determined an official date for the sunset of traditional MIPS. CMS also finalized the creation of a new “Advancing Health and Wellness” subcategory within the Improvement Activities performance category. This supports the agency’s goal of promoting preventive care and proactive health management.

Changes to MVP Reporting

• MVP Participant Definition (page 1,446): For the CY 2026 performance period/2028 MIPS payment year and future years, MVP Participant means an individual MIPS-eligible clinician, single-specialty group, multispecialty group that meets the requirements of a small practice, subgroup, or APM Entity that is assessed on an MVP for all MIPS performance categories.
• Subgroup Reporting Requirements (page 1,454): A multispecialty group that meets the requirements of a small practice (2 to 15 clinicians) is not required to report using subgroups, although it may do so voluntarily. To report an MVP as a group, CMS finalized that the group must attest to being either a single specialty group or a multispecialty group that qualifies as a small practice.
• MVP Registration (page 1,449): Subgroups must register under an MVP but need not attest to specialty composition. Registration timelines and procedures remain consistent with previous policy.

Requests for Information
CMS thanked commenters for their feedback on multiple RFIs, including those on (1) Core QPP and MVP design elements, (2) the use of Medicare procedural codes within MVPs, and (3) the potential development of well-being and nutrition-related measures. CMS stated it will consider this input in future policymaking and rulemaking activities.

Appendix A: CY 2026 PFS Estimated Impact on Total Allowed Charges by Specialty – p. 1,738