The 2026 Medicare Physician Fee Schedule introduces a modification to the work Relative Value Unit (wRVU) that will impact payment calculations. An “efficiency adjustment” of -2.5 percent will be applied to the work RVU (wRVU) of non-timed services[1] and CMS intends to apply an efficiency adjustment every three years.
What is the wRVU Efficiency Adjustment?
CMS has historically relied on survey data from the AMA Specialty Society Relative Value Scale (RVS) Update Committee (RUC) to estimate practitioner time, work intensity, and practice expense to establish RVUs. They have longstanding concerns about the survey’s response rates, low total numbers of responses, and wide variation in responses. There is also a concern about including respondents who may have inherent conflicts of interest, i.e. their responses are used in setting their payment rates.
According to CMS, research shows that the time assumptions built into the valuation of many MPFS services are likely overinflated. Their studies demonstrate that most notably, non-time-based services are overvalued. Non-time-based codes describe procedures, radiology services, and diagnostic tests that CMS believes should become more efficient as their usage becomes more common, the providers who are administering the services gain more experience, the technology is improved, and other operational improvements are implemented such as enhancements in procedural workflows.
What This Means for Your Practice
To mitigate these effects and to account for changes in medical practice, CMS has finalized applying an efficiency adjustment to the work RVU and the corresponding intraservice portion of physician time for non-time-based services[2]. CMS will implement an efficiency adjustment of -2.5 percent for certain non-time-based codes and will continue to apply this efficiency adjustment every three years.
An analysis of 47 non-time-based CPT codes commonly performed in a diagnostic radiology practice shows an unweighted average reduction of -2.15 percent and the chart below shows the average impact by modality.
Illustration I: Efficiency Adjustment Analysis by Modality
CMS will continue to explore additional efficiencies for services that require less time to perform and whether efficiencies are gained in services that are performed many times per day such as cataract extractions, skin biopsies, and CT scans. They are also interested in if the introduction of new artificial intelligence tools has or will lead to otherwise unaccounted for efficiency gains in specific services.
Calculating the Impact on Collections
The two primary variables used by CMS in deriving its allowed payment rates are total RVUs (by CPT® code) and the conversion factor. Geographic Practice Cost Indices (GPCI) are also factored into the equation, and until the Medicare fee schedules are published, it is difficult to quantify the precise impact on collections. However, an estimate based on RVUs and the non-QP conversion factor ($33.40) only is a slight increase of approximately 0.58 percent. Practices with higher volumes of interventional procedures and/or evaluation and management services will likely see lower increases.
For a deeper dive into all changes finalized in the 2026 Medicare Physician Fee Schedule, including conversion factor updates, quality program changes, and the full set of RVU adjustments, visit our comprehensive summary: A Summary of the 2026 Medicare Physician Fee Schedule Final Rule
[1] Evaluation and management, behavioral health, and telehealth services are examples of time-based services.
[2] Intraservice portion of physician time inputs refers to the time a physician spends directly performing a medical service or procedure, not including time before or after the procedure; also called face-to-face time or direct service time.
Barbara Rubel
MBA, FRBMA
Senior Vice President, Marketing & Client Services
Barbara has been a leader with MSN Client Services since 1998. Her extensive background in strategic planning, market research, healthcare marketing and managed care negotiations provides a wealth of information to support MSN Clients.
Barbara has also been highly involved in industry organizations, serving as President of the Radiology Business Management Association (RBMA), the Georgia RBMA, and the Florida RBMA. In addition, she chaired the influential RBMA Federal Affairs Committee and the RBMA Technology Task force and was a member of the RBMA Data Committee. Her work on behalf of radiology has earned her the RBMA Special Recognition Award (2010), the RBMA Global Achievement Award (2013), and she is a Fellow of the RBMA.
