Industry Groups Warn CMS’ 2026 Fee Schedule Could Undermine Value-Based Care

Healthcare groups are reacting to CMS’ proposed 2026 Physician Fee Schedule mainly with concern, arguing that it needs significant revisions in order to avoid destabilizing providers and undermining value-based care momentum.

The proposal, issued in July, seeks to establish two new conversion factors — one for physicians in advanced alternative payment models (APMs) and another for those who aren’t. CMS plans to increase the APM rate by 3.83% in 2026, while the non-APM rate would go up by 3.62%. 

These increases reflect several factors — a small statutory bump (0.75% for APM participants and 0.25% for others), an across-the-board 2.5% increase required by recent legislation, and an additional 0.55% adjustment tied to CMS’ proposed changes in physician work relative value units (wRVUs). 

For 2026, CMS is also proposing to trim payments by applying a 2.5% “efficiency adjustment” to certain wRVUs. Essentially, CMS believes some services can be delivered more efficiently, so it is lowering the amount of physician work credited for those services — wRVUs are central to how Medicare sets payment rates, so this adjustment would effectively reduce reimbursement for many affected codes.

In addition, the agency’s plan seeks to lower the indirect practice expense payments for services performed in hospital facilities, arguing that providers in those settings face lower overhead costs than office-based practices. This change would reduce reimbursement for many facility-based services while slightly boosting payments for care delivered in physician offices.

CMS’ deadline for healthcare organizations to submit their comments was September 12. 

In its letter, the Medical Group Management Association (MGMA) voiced strong opposition to the payment rates included in the proposal. While the organization appreciates that CMS is proposing to increase the two newly introduced conversion factors, “this does not remedy previous cuts that physician groups have had to absorb due to flawed policy, nor does it address potential future cuts due to budget neutrality,” MGMA wrote.

The group also pushed back on the efficiency adjustment to wRVUs and the cuts to indirect practice expenses, saying both changes would unfairly penalize providers and accelerate consolidation. 

Another industry group — the National Association of ACOs (NAACOS) — criticized CMS’ plan to mandate participation in its ambulatory specialty model, which is a value-based care program aimed at integrating specialists into Medicare payment models for conditions like heart failure and back pain. 

In its proposal, CMS said participation would be mandatory, with specialists’ payments tied to performance and patient outcomes, overlapping with other programs like the Medicare Shared Savings Program (MSSP).

“Requiring specialists in an ACO to participate will exponentially increase  administrative burden, create duplicative reporting requirements, and more importantly, unintentionally discourage specialists from remaining in and joining advanced APM arrangements. At a minimum, providers that have qualified provider/partial qualified provider status should be excluded from the model or allowed to voluntarily opt-in to [the ambulatory specialty model],” NAACOS wrote in its letter.

In addition to structural and payment concerns, healthcare groups are pressing CMS to make better use of data. 

Premier called on the agency to utilize data from performance-based contracting arrangements to better inform coverage and reimbursement decisions for new digital health tools.

“Premier encourages CMS to engage with SaaS vendors and provider end users who are already collecting and evaluating evidence of the tool’s impact on quality improvement and cost effectiveness,” the company wrote.

Healthcare stakeholders will now wait to see how the agency responds to these comments and whether the final rule will address the concerns they raised.

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