By: Barbara Rubel, MBA, FRBMA, MSN Sr. VP, Marketing and Client Services
Past President, FRBMA
Marissa S. Pearce, MHS, Executive Director of Quality Payment Programs
MSN QCDR | MIPit Consulting Services
Medicare payments have been made under the Medicare Physician Fee Schedule (MPFS) for the services of qualified healthcare professionals for 35 years. Payments are based on the relative resources used to furnish these services, and both relative value units (RVUs) and geographic practice cost indices (GPCIs), which account for cost variations by geographic area, are applied to each service for work, practice expense, and malpractice. Allowed payments are then calculated by multiplying the total RVUs by a conversion factor (see Illustration I).
Illustration I: Calculating Medicare Payments
The Centers for Medicare and Medicaid Services (CMS) published the 2026 Medicare Physician Fee Schedule Final Rule on October 31st, 2025 with a subsequent publication in the November 5th Federal Register titled “Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program.”
2026 Conversion Factors and Their Impact on QPs vs. Non-QPs
CMS has finalized two separate conversion factors, this being the first year it has done so. The qualifying Alternative Payment Model (APM) Conversion Factor (CF) is for services furnished by qualifying APM participants (QPs) and will be $33.57 (+$1.24 or 3.83 percent higher than the 2025 CF of $32.35). The non-qualifying APM CF is finalized at $33.40 (+$1.07 or 3.3 percent higher than the 2025 CF). Variables included in calculating these conversion factors include a 0.49 percent positive budget neutrality adjustment, 0.75 percent (QP CF), and 0.25 percent (non-QP CF) update adjustment factors per the Medicare Access and CHIP Reauthorization Act (MACRA), and a one-time 2.5 percent increase, per H.R. 1, the One Big Beautiful Bill Act.
Illustration II: Conversion Factor Calculations
A Qualifying Participant (QP) in the Quality Payment Program (QPP) is an eligible clinician who participates in an Advanced Alternative Payment Model (APM) and who meets specific thresholds for the number of Medicare beneficiaries and volume of Medicare payments that come through the APM. QPs will receive a higher physician fee schedule conversion factor than non-QPs. The 2025 thresholds for APM participants to qualify as QPs are 75 percent of their Medicare Part B payments, and 50 percent of their Medicare beneficiaries must come from the APM. These same percentages will hold true in 2026.
The estimated impacts by specialty from RVU changes are shown in Illustration III, and these percentages do not include CF impacts. Individual practice volumes and service mix will determine the effect on a group’s Medicare revenues, and this information is found in Table D-B7 in the Final Rule. The estimated impacts for specialties in the hospital-based setting are driven primarily by the adjustment to indirect PE allocation in the facility setting and the efficiency adjustment.
Illustration III: Estimated Impacts by Specialty
Recalibrating Work RVUs for Imaging, Testing, and Other Procedures
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. CMS conducted a pilot project by the Urban Institute in 2016, which compared data from electronic health records with direct observation, and the ratios of fee schedule time to empirical time were often inflated, with the largest discrepancies in imaging and other test interpretations.
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.
Note: The intraservice portion of physician time inputs refers to the time a physician spends directly performing a medical service or procedure, excluding time before or after the procedure; also called face-to-face time or direct service time.
CMS will implement a -2.5 percent efficiency adjustment for certain non-time-based codes and will continue to apply it every 3 years. The codes that are being considered can be downloaded from the CMS website in Excel format. An analysis of 47 CPT codes commonly performed in a diagnostic radiology practice shows an unweighted average reduction of -2.15 percent, and Illustration IV shows the average for these 47 codes by modality.
Illustration IV: Efficiency Adjustment Analysis by Modality
CMS will continue to explore additional efficiencies for services that require less time to perform, and if efficiencies are gained in services performed many times per day, such as cataract extractions, skin biopsies, and CT scans. They are also interested in whether the introduction of new artificial intelligence tools has or will lead to otherwise unaccounted-for efficiency gains in specific services.
Updating Practice Expense Methodology for 2026
CMS typically establishes two separate PE RVUs, one for services furnished in a non-facility setting, such as a physician’s office, and one for services provided in a facility setting, such as a hospital or an Ambulatory Surgery Center (ASC). The current PE methodology relies on the AMA’s Physician Practice Information Survey (PPIS) data from 2008, measuring specialty-specific practice costs.
In 2024, the American Medical Association (AMA) conducted updated survey efforts and submitted data to CMS in early 2025 for consideration in CY 2026 rate setting. However, CMS expressed concerns about the data and will not use the PE/HR data in setting the 2026 rates. Their concerns included small sample sizes and sampling variation, low response rates, potential measurement errors, and incomplete data submission.
CMS is, however, proposing significant updates to its PE methodology to better reflect current clinical practice. Their original methodologies assumed physicians maintained separate practice locations even when some services were furnished in a facility. Given a steady decline in the number of physicians who are working in private practice and a corresponding rise in physician employment by hospitals and health systems, CMS will recognize higher indirect costs for clinicians in office-based settings versus in facility settings. They believe allocating indirect costs for PE RVUs in the facility setting at the same rate as the non-facility setting no longer reflects current clinical practice and have reduced the indirect portion of the facility PE RVUs allocated based on work RVUs to 50 percent of the amount allocated to non-facility PE RVUs.
Specialties that practice primarily in non-facility settings will see an increase in PE RVUs, and specialties that perform services primarily in the facility setting will see a decrease in PE RVUs because of this reduction. This methodology change to indirect PE allocation will not affect the conversion factor, as the changes in valuation would be within the development of PE RVUs and would redistribute PE RVUs from the facility to the non-facility setting.
That said, CMS has confirmed the PE RVUs will remain the same for codes with a 26 modifier in the facility and non-facility settings. Codes with 26 modifiers have historically always had the same PE RVUs in both sites of service, and this relationship will be maintained for CY 2026. Interventional radiology, however, will be impacted by this change.
Direct Supervision via Use of Two-Way Audio/Video Communications Technology
Under Medicare Part B, some diagnostic tests and “incident-to” services require direct (level 2) supervision. Historically, providers have had to be present in the office suite and immediately available to furnish assistance and direction throughout the performance of the service; however, they do not have to be present in the room.
In March of 2020, the definition of “direct supervision” was amended to include a “virtual” presence using two-way, real-time audio/visual (video) communications technology. Providers were not required to have a real-time presence or observation of the service throughout the performance of the service, and this policy was extended in the CY 2021, 2024, and 2025 MPFS Final Rules through December 31, 2025.
CMS is permanently adopting a definition of direct supervision that allows “immediate availability” of the supervising practitioner using audio/video real-time communications technology (excluding audio-only) for all services described under § 410.26, except for services that have a global surgery indicator of 010 or 090.
Procedures that are excluded include:
- Minor procedures with preoperative relative values on the day of the procedure and postoperative relative values during a 10-day postoperative period are included in the fee schedule amount.
- Evaluation and management services on the day of the procedure and during the 10-day postoperative period.
- Major surgery with a one-day preoperative period and a 90-day postoperative period is included in the fee schedule payment.
CMS is also seeking comments on whether services with a 000 global surgery indicator should also be excluded.
Incident To Services
“Incident To” services are submitted under the physician’s NPI but are performed by a non-physician practitioner (NPP) or mid-level and are most commonly provided in a physician’s office. These services cannot be rendered on the patient’s first visit, or if a change to the plan of care occurs; however, after the encounter where the physician establishes a diagnosis and initiates the plan of care, an NPP or mid-level may provide follow-up care under the “direct supervision” of a qualified provider.
2026 CPT® Code Changes
CTA Head and Neck
New codes for CTA head & neck have been created:
- CPT® 70471 (CTA head/neck w/contrast)
0042T is being replaced by:
- CPT® 70472 (CT cerebral perfusion analysis w/contrast w/concurrent CT or CTA)
- CPT® 70473 (CT cerebral perfusion analysis w/o concurrent CT or CTA)
Stand-alone codes (CTA head 70496 and CTA neck 70498) will be treated similarly to CTA abdomen/pelvis in that both are still available but should only be used in the rare circumstance when a single anatomic region is studied.
Thoracic Branch Endograft Services
The CPT® Editorial Panel approved endovascular repair of thoracic aortic aneurysms (TEVAR*) coding changes at their September 2024 meeting with the inclusion of two new codes:
- CPT® 33882: Endovascular repair of the thoracic aorta by deployment of a branched endograft multipiece system involving an aorto-aortic tube device with a fenestration for the left subclavian artery stent graft(s) and all aortic tube endograft extension(s) placed from the level of the left common carotid artery to the celiac artery, including preprocedural sizing and device selection, all target zone angioplasty, all nonselective catheterization(s) and left subclavian artery selective catheterization(s), all associated radiological supervision and interpretation.
- CPT® 35602: Bypass graft, with other than vein; carotid- contralateral carotid.
CPT® codes 33880, 33881, 33883, and 33886 have been revised to align with current practice and coding standards for the TEVAR code family. These changes will be important for clinicians who perform high-end interventional procedures.
Lower Extremity Revascularization Codes
The Lower Extremity Revascularization section has been completely revised with the deletion of the 16 current codes and the addition of 46 new codes (Table A-E5 in the Final Rule). Coding changes include expanding the regions to include the inframalleolar region in addition to the iliac, femoral-popliteal, and tibial-peroneal regions, and the codes differentiate between the treatment of straightforward and complex lesions. The 2026 CPT® manual will include extensive Section Notes on how to determine straightforward vs. complex lesions, and coders are warned not to accept a statement such as, ‘all of our complex lesions’ to choose an appropriate code.
Endovascular Therapy Coding
The Endovascular Therapy codes are revised to include RS&I so imaging guidance (CPT® 75894) will no longer be separately billable. However, at this point, follow-up angiography will remain separately billable (CPT® 75898), a topic that will be addressed at the CPT® Symposium in Chicago. CPT® codes 61624 and 61626 are revised to include all RS&I guidance necessary to complete the intervention. The Vascular Embolization and Occlusion guidelines are revised, with new guidelines added to the Endovascular Therapy subsection.
Radiation Therapy Delivery Codes
There are revisions to the radiation therapy delivery codes, so those who perform radiation therapy will want to review Tables A-E7, A-E8, and A-E9 in the Final Rule for additional information.
The Quality Payment Program
The Merit-based Incentive Payment System (MIPS) will remain much the same as it is in 2025 to (a) facilitate a transition to MIPS Value Pathways (MVPs) and (b) accommodate a smooth re-entry for clinicians who have filed for exemptions due to Extreme and Uncontrollable Circumstances (EUC). MVPs will likely be the next “landing spot” for MIPS, with fewer choices and more competition defining the future of the Quality Payment Program.
There will be continued emphasis on data extraction for reporting, as evidenced by Fast Healthcare Interoperability Resources (FHIR), a standard developed by HL7 for exchanging healthcare information electronically. Patient outcomes will remain a focus, and efforts are underway to (a) compare “like” specialty to “like” specialty and (b) include as many clinicians in the program as possible.
Quality Measure Deletions
- #185: Colonoscopy Interval for Patients with a History of Adenomatous Polyps
- #264: Sentinel Lymph Node Biopsy for Invasive Breast Cancer
- #290: Assessment of Mood Disorders and Psychosis for Patients with Parkinson’s
- #322: Cardiac Stress Imaging Not Meeting Appropriate Use Criteria (standard of care (Radiology)
- #419: Overuse of Imaging for the Evaluation of Primary Headache
- #424: Perioperative Temperature Management (standard of care) (Anesthesia)
- #443: Non-Recommended Cervical Cancer Screening in Adolescent Females
- #487: Screening for Social Drivers of Health (process no longer a priority area) (Radiology)
- #498: Connection to Community Service Provider
- #508: Adult COVID-19 Vaccination Status
Quality Measure Changes
Topped Out Quality Measures with 10-Point Benchmarks: Radiology
- #360: Optimizing Patient Exposure to Ionizing Radiation: Count of Potential High Dose Radiation Imaging Studies: Computed Tomography (CT) & Cardiac Nuclear Medicine Studies
- #364: Optimizing Patient Exposure to Ionizing Radiation: Appropriateness: Follow-up CT Imaging for Incidentally Detected Pulmonary Nodules According to Recommended Guidelines
- #405: Appropriate Follow-up Imaging for Incidental Abdominal Lesions
- #406: Appropriate Follow-up Imaging for Incidental Thyroid Nodules in Patients
Topped Out Quality Measures with 10-Point Benchmarks: Pathology
- #249: Barrett’s Esophagus:
- #395: Lung Cancer Reporting (Biopsy/Cytology Specimens)
- #396: Lung Cancer Reporting (Resection Specimens)
- #397: Melanoma Reporting
- #440: Skin Cancer: Biopsy Reporting Time – Pathologist to Clinician
- #250: Radical Prostatectomy Pathology Reporting
Topped Out Quality Measures with 10-Point Benchmarks: Anesthesiology
- #430: Prevention of Post-Operative Nausea and Vomiting (PONV) – Combination Therapy
- #463: Prevention of Post-Operative Vomiting (POV) – Combination Therapy (Pediatrics)
- #477: Multimodal Pain Management
Improvement Activities
Additions (3):
- Improving Detection of Cognitive Impairment in Primary Care
- Integrating Oral Health Care in Primary Care
- Patient Safety in Use of Artificial Intelligence (AI): Track attributable bad events, identify cause, document plan for future mitigation
Changes (1 substantial & 6 minor):
- IA_BMH_1: Diabetes Screening –Antipsychotic drug monitoring: expanding beyond Diabetes screening to full health screening
- Moving 6 existing activities to a new subcategory of Advancing Health and Wellness (no impact)
Deletions
- IA_AHE_5: MIPS Eligible Clinician Leadership in Clinical Trials or CBPR
- IA_AHE_8: Create & Implement an Anti-Racism Plan
- IA_AHE_9: Implement Food Insecurity & Nutrition Risk Identification & Treatment Protocols
- IA_AHE_11: Create & Implement a plan to improve care for LGBTQ+ patients
- IA_AHE_12: Practice improvements that engage community resources to address drivers of health
- IA_PM_26: Vaccine achievement for practice staff: COVID-19, Influenza, Hepatitis B
- IA_PM_6: Use of Toolsets or other resources to close health & health care inequities across communities
- IA_ERP_3: COVID-19 clinical data reporting with or without clinical trial
MIPS Value Pathways (MVPs)
Five new MVPs have been finalized for 2026 (see Appendix 3 in the Final Rule for a discussion about these new MVPs):
- Diagnostic Radiology MVP
- Interventional Radiology MVP
- Neuropsychology MVP
- Pathology MVP
- Vascular Surgery MVP
Clinicians must register to report through an MVP between April 1st and November 30th, 2026 via their QPP account. There is no penalty for registering for an MVP and then choosing to submit via Traditional MIPS only. Clinicians also have the option to report under both Traditional MIPS and an MVP, and CMS will award the higher of the two scores. MVPs are managed by CMS, and MVP measures can and may change annually.
Subgroup reporting is mandatory beginning in 2026, and clinicians are to define their subgroups at the time of registration. A subgroup may be defined as providers with a “single focus of care,” e.g., radiology.
The New Ambulatory Specialty Model (ASM)
The ASM is a mandatory, specialty-specific payment model under the QPP that changes how specialists are paid and creates direct competition between specialists. Payment adjustments are based on relative performance rather than meeting predetermined thresholds, and the goals are to improve chronic disease management, encourage prevention and care coordination, and reduce unnecessary spending.
This payment model will be launched on January 1, 2027, and the initial focus will be on Low-Back Pain and Heart Failure. The duration will be five years (2027–2031), and the performance metrics will be Quality, Cost, Improvement Activities, and Promoting Interoperability. The reporting framework will be built on MIPS & MVPs, but with a narrower focus.
Mandatory participants will be determined by services provided and geographic location, and eligible clinicians are exempt from participating in MIPS. Clinicians who are eligible for heart failure are cardiology, excluding proceduralists, surgeons, and interventional cardiologists. Anesthesiologists, Interventional pain management, neurosurgery, orthopedic surgery, pain management, and physical medicine and rehabilitation (PMR) are eligible for low back pain.
CMS believes this new payment model will bring more clinicians into the QPP, including those who are not currently MIPS-eligible, e.g., QPs, and those who meet the MIPS low volume threshold. Clinicians will report and be scored at the individual clinician level, and they will report on quality, improvement activities, and promoting interoperability (if applicable). CMS will calculate scores for the cost measures related to the conditions. CMS will retain a percentage of the payments rather than distributing all funds as clinicians’ payment adjustments.
How to Prepare for 2026
MIPS Strategies and Next Steps
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.
Marissa Pearce
MHS
Executive Director of Quality Payment Programs
Marissa is MSN’s Executive Director of Quality Payment Programs. She has over 20 years of experience in financial analytics, practice management, and reimbursement on both the provider and facility sides. Marissa earned her degree in Accounting from the University of Maryland and her Master’s in Healthcare Finance and Management from Johns Hopkins. She works to guide her clients through the intricacies of value-based purchasing models, allowing them to achieve program goals while preserving their time for what matters most – caring for patients.
