CMS Proposes 2.5% Medicare Physician Pay Increase, New Chronic Care Model

The Centers for Medicare & Medicaid Services (CMS) has proposed a 2.5% base pay increase for physicians under Medicare in 2026, alongside a new payment model targeting chronic disease management and telehealth flexibilities. For the first time, CMS plans to implement two separate conversion factors: one for qualifying participants in Advanced Alternative Payment Models (APMs), who will receive a 3.83% increase, and another for non-qualifying providers, who will see a 3.62% increase. The proposed rule also includes a 0.55% adjustment for changes in work relative value units (RVUs) and an efficiency adjustment to certain service valuations to better reflect current medical practices. Additional proposed changes include updates to geographic practice cost indices, malpractice RVUs, and permanent adoption of virtual direct supervision and telehealth waivers for federally qualified health centers and rural clinics. CMS aims to enhance primary care, reduce unnecessary spending, and simplify quality scoring for accountable care organizations, including removing a health equity adjustment from quality scores starting in 2025. These reforms align with the Trump administration's focus on data-driven policy improvements to promote high-quality, efficient care and better health outcomes for Medicare beneficiaries.