Academy Analysis: Medicare Physician Fee Schedule 2026

Final 2026 Medicare Pay Boost Masks Deep Cuts to Surgical Care

The Centers for Medicare & Medicaid Services (CMS) has released its final rule for the 2026 Medicare Physician Fee Schedule. Here are highlights based on the Academy’s early analysis. The Academy continues working with our advocacy partners to halt implementation of policies that will disproportionately cut reimbursement for surgical and specialty care.

• More than a 3% increase to Medicare Part B payments
• 2026 final conversion factors
• CPT code valuations
• Two significant policies for surgical care
• Reductions to practice expense for the facility setting
• -2.5% efficiency adjustment to nearly all procedures
• Quality Payment Program and Merit-Based Incentive Payment System (MIPS) changes

Office-Based Medicare Payments — Final (PDF)

Facility-based Medicare Payments — Final (PDF)

Under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), CMS must implement two conversion factors starting in 2026. The final 2026 fee schedule has an estimated 3.3% bump to Medicare payments for physicians who do not participate in Advanced Alternative Payment Models (APM). CMS finalized a 3.8% increase for qualifying APM participants. Both conversion factor updates are driven by the one-year 2.5% Medicare payment increase in 2026 that was included in the Republican budget reconciliation legislation passed last summer, small positive payment adjustments provided by MACRA, and a small positive budget neutrality adjustment.

Conversion factor updates affect each specialty differently. According to CMS, ophthalmology will see an estimated .75% to 1.25% increase to Medicare payments for the coming year. The effect on individual ophthalmologists will be determined by the mix of procedures they perform and their APM participation status.

Keep in mind that the conversion factor updates in this rule reflect the temporary 2.5% Medicare payment increase that was included in the Republican budget reconciliation legislation, which will expire at the end of 2026.

We are deeply disappointed that CMS decided to finalize the -2.5% efficiency adjustment for non-time-based codes, with minimal refinements, and the cut to indirect practice expense for services provided in a facility setting. Despite vocal opposition from the physician community, CMS plans to implement both policies with minimal changes on Jan. 

The Academy submitted formal comments to CMS on Sept. 10, outlining ophthalmology’s concerns and urging the agency to reconsider these proposals. In addition to the formal comments, the Academy launched a multipronged advocacy campaign to fight these policies. To amplify our message, we initiated a grassroots campaign that individual Academy and AAOE^® members used to submit their comments to CMS on the proposed rule, resulting in nearly 700 individual submissions. State ophthalmology and specialty interest societies were also provided letter-writing resources to support their advocacy efforts. Despite these extensive efforts, CMS has ignored stakeholder feedback and moved forward with these harmful policies.

Academy President Michael X. Repka, MD, MBA, highlighted the dangerous consequences of these ill-advised plans. “These novel assaults on surgical specialty care challenge our ability to continue delivering high-quality care to patients, especially in rural and underserved communities. Faced with reduced surgical reimbursement, we anticipate that more ophthalmologists may be driven toward consolidation to keep their practices in business. Congress needs to step in and protect patient access to care,” he said.

The Academy is working with the American College of Surgeons and other specialty medicine organizations to forcefully oppose these policies and urge congressional action by the end of the year. With the end of the year rapidly approaching, we have a limited amount of time to secure the needed congressional action. It is imperative that you get involved now! Your voice will amplify our message with lawmakers!

The policies in this final rule are significant, and the Academy is committed to empowering you with the most thorough analysis of each section. Watch for future issues of Washington Report Express for detailed summaries of how specific policies could affect the way you practice and care for patients.

2026 Conversion Factors

The 2026 conversion factor for qualified APM participants is $33.57, an increase of $1.22 (3.8%) from the 2025 Medicare Physician Fee Schedule conversion factor of $32.35. The 2026 conversion factor for all other clinicians is $33.40, an increase of $1.05 (3.3%) from the 2025 conversion factor of $32.35.

The final conversion factor update is primarily based on three factors:

• Statutory update in the Medicare Access and CHIP Reauthorization Act (MACRA): .75% for Qualified APM participants (QPs) and 0.25% for everyone else;
• A 0.49% positive budget neutrality adjustment
• A 2.5% one-year payment increase from the One Big Beautiful Bill Act

Due to the lack of relevant APM options, most ophthalmologists participate in MIPS. We anticipate that the “all other clinicians” conversion factor will apply to most ophthalmologists. To review your participation status, check your NPI number on the QPP website.

Global Surgical Codes

The Academy has continued to push for payment equity for post-operative visits bundled into global surgical codes. We are disappointed that CMS did not address our concerns in the final rule. Instead, the agency will continue considering alternatives to the current share of a global surgical package valuation assigned to the surgeon when modifier -54 is reported. CMS will analyze stakeholder input as to current practice standards and division of work between surgeons and other providers of post-operative care for future rulemaking. The Academy will continue working with the Surgical Coalition to explore new strategies to advocate for global post-op visit payment equity.

Specific CPT Code Valuations

The American Medical Association (AMA) Specialty Society Relative Value Scale Update Committee (RUC) revalued a small number of ophthalmology codes in the last year. Here’s what you should know:

New Dark Adaptation Screening Code 92288

Starting with the 2026 fee schedule, a new code, CPT 92288, will be available for “screening dark adaptation measurement (e.g., rod recovery intercept time), with interpretation and report.” This addition prompted the revaluation of the existing dark adaptation procedure family.

We are disappointed CMS did not accept the RUC’s recommended work relative value units (WRVUs) for these codes, instead finalizing the following values:

• 92284: 0.29 WRVUs, up 0.29 WRVUs from the current value of 0.0 WRVUs
• 92288: CMS assigned status indicator ‘N’ as a non-covered service. CMS will list the RUC-recommended RVUs (0.17) for display purposes only

Medicare Economic Index

For 2026, CMS did not accept the results of the AMA’s Physician Practice Information Survey and Clinician Practice Information Survey to rebase and revise the Medicare Economic Index (MEI) calculation for practice expenses. Instead, the agency plans to maintain the current practice expenses and 2006-based MEI cost shares for 2026 PFS rate setting, delaying implementation of the rebased and revised MEI policy finalized in the 2023 final rule.

Significant Cuts for Surgical Care

CMS is moving forward with two very concerning policies that drive down reimbursement for surgeons and services provided in the facility setting in the near- and long-term. These policies dramatically and unfairly cut reimbursement for most surgical specialty care using arbitrary adjustments to some of the main components of physician pay - WRVUs and indirect practice expense (PE). Such arbitrary changes to Medicare payment policy threaten access to high-quality care, patient safety, and the viability of physician practice.

The Academy continues to work closely with our physician community partners, including the Surgical Coalition, to push Congress to intervene.

Changes to Practice Expense for the Facility Setting

Currently, the indirect PE of any service is the same whether performed in the facility (e.g., hospital outpatient departments (HOPD), ambulatory surgical centers (ASC)) or nonfacility (e.g., office) setting. CMS believes this incentivizes consolidation and is finalizing a change to the PE calculation that reduces the facility PE RVUs by half.

Because PE payments must remain budget neutral, the change reallocates indirect expense RVUs from facility setting services to in-office services. The outcome is that reimbursement for nonfacility services increases while facility service reimbursement goes down. We anticipate the biggest impact will be to providers working mostly or exclusively in the facility setting (e.g., academic departments).

New -2.5% Efficiency Adjustment

CMS contends that as doctors gain experience over time, they become more efficient performing non-time-based codes, such as procedures, radiology services, and diagnostic testing. CMS also attributes physicians’ increasing efficiency to advancements in technology and other operational improvements.

To mitigate what CMS believes to be overestimated physician work times built into PFS valuations and to account for changes in medical practice, the agency is applying an efficiency adjustment to the intraservice portion of physician time and corresponding WRVU for nearly all non-time-based codes. An efficiency adjustment in the physician fee schedule is unprecedented and has come as a surprise to organized medicine.

Using the sum of the MEI productivity adjustment from the past five years, the efficiency adjustment is -2.5% for 2026. CMS says it will apply an efficiency adjustment every three years.

Due to budget neutrality, the reduction to non-time-based code WRVUs is redistributed to time-based codes, which CMS defines as evaluation and management (E/M) visits, care management services, behavioral health services, services on the CMS telehealth list, and certain maternity codes. Since this adjustment will reduce thousands of code values in 2026, it results in the 0.49 positive budget neutrality adjustment mentioned above.

Unfortunately, many surgical codes like cataract surgery and retinal detachment surgery will get hit twice with reductions because they are impacted by both the efficiency adjustment and practice expense policies. The overall impact of these policies will impact providers differently depending on their practice type, subspecialty, and place of service. Ophthalmologists can project their impact based on their current CPT code utilization.

Quality Payment Program and MIPS Changes

Thanks to relentless advocacy from the Academy and the physician community, CMS finalized keeping the 2026 performance threshold at 75 points, the score needed to avoid a negative payment adjustment in 2028. This will provide much-needed stability in the MIPS program as it continues to become more rigorous.

As required by statute, CMS will maintain the 75% data completeness criteria and keep the performance category weights unchanged: cost performance 30%; quality performance 30%; improvement activity 15%; and promoting interoperability 25%.

Quality Performance Category

CMS finalized the removal of several MIPS quality measures for the 2026 performance year/2028 payment year, including the following:

• Quality ID #419: Overuse of Imaging for the Evaluation of Primary Headache
• Quality ID #487: Screening for Social Drivers of Health
• Quality ID #508: Adult COVID-19 Vaccination Status

CMS finalized changes to several MIPS quality measures specifications, including the following ophthalmic measures. CMS will also be changing the way it scores certain quality measures defined as being “topped-out” due to having high average performance rates.

• Quality ID #12: Primary Open-Angle Glaucoma (POAG): Optic Nerve Evaluation
• Quality ID #117: Diabetes: Eye Exam
• Quality ID #191: Cataracts: 20/40 or Better Visual Acuity within 90 Days Following Cataract Surgery
• Quality ID #389: Cataract Surgery: Difference Between Planned and Final Refraction
• Quality ID #500: Acute Posterior Vitreous Detachment Appropriate Examination and Follow-up
• Quality ID #501: Acute Posterior Vitreous Detachment and Acute Vitreous Hemorrhage Appropriate Examination and Follow-up

CMS finalized changes to the following measure but will delay its implementation until the 2027 performance year/2029 payment year.

• Quality ID #141: Primary Open-Angle Glaucoma (POAG): Reduction of Intraocular Pressure (IOP) by 20% OR Documentation of a Plan of Care

Improvement Activities Performance Category

CMS finalized the following new improvement activities, which will be available for reporting for the 2026 performance year/2028 payment year:

• Improving Detection of Cognitive Impairment in Primary Care
• Integrating Oral Health Care in Primary Care
• Patient Safety in Use of Artificial Intelligence (AI)

CMS finalized the removal of the following improvement activities for the 2026 performance year/2028 payment year:

• MIPS Eligible Clinician Leadership in Clinical Trials or CBPR
• Create and Implement an Anti-Racism Plan
• Implement Food Insecurity and Nutrition Risk Identification and Treatment Protocols
• Create and Implement a Plan to Improve Care for Lesbian, Gay, Bisexual, Transgender, and Queer Patients
• Practice Improvements that Engage Community Resources to Address Drivers of Health
• Vaccine Achievement for Practice Staff: COVID-19, Influenza, and Hepatitis B
• Use of Toolsets or Other Resources to Close Health and Health Care Inequities Across Communities
• COVID-19 Clinical Data Reporting with or without Clinical Trial

The following improvement activities will also be removed for the 2026 performance year/2028 payment year, which CMS finalized in the 2025 Medicare Physician Fee Schedule Final Rule.

• Population Empanelment
• Implementation of Use of Specialist Reports Back to Referring Clinician or Group to Close Referral Loop
• Implementation of Improvements That Contribute to More Timely Communication of Test Results
• Electronic Health Record Enhancements for Behavioral Health (BH) Data Capture

Promoting Interoperability (PI) Performance Category

CMS finalized modifications of the following measures:

• Protect Patient Health Information Objective, Security Risk Analysis Measure
• High Priority Practices SAFER Guide Measure

CMS finalized a new optional bonus measure under the Public Health and Clinical Data Exchange

• Public Health and Clinical Data Exchange Objective, Adopting the Public Health Reporting Using the Trusted Exchange Framework and Common Agreement (TEFCA).

Lastly, CMS is suppressing the Electronic Case Reporting measure for the 2025 MIPS performance year/2027 payment year, due to the Centers for Disease Control and Prevention (CDC) temporarily pausing the onboarding new health care organizations for production of electronic case reporting data and new local public health agencies for receipt of electronic case reporting. Physicians in small practices, defined as having 15 or fewer clinicians, will continue to be automatically exempt from submitting any data for the PI performance category.

Cost Performance Category

CMS finalized revisions to the Total Per Capita Cost (TPCC) measure to address prior instances in which the measure had been incorrectly attributed to ophthalmologists during previous performance years.

MIPS Value Pathways (MVPs)

We are deeply disappointed that CMS continues to move forward with plans to sunset traditional MIPS and transition to MVP reporting, despite our repeated feedback and advocacy.

The Academy and our ophthalmology subspecialty partners have consistently advocated against a one-size-fits-all MVP approach for ophthalmologists. CMS previously finalized the first MVP for ophthalmology, “Complete Ophthalmologic Care” MVP, available for reporting for the 2025 performance year/2027 payment year.

Although we are pleased that CMS has organized the quality measures by clinical conditions, the current MVP framework still does not allow many ophthalmic subspecialists to succeed in the program.

We remain steadfast in our advocacy that MVP reporting must remain optional. Physicians should have the flexibility to choose the reporting option that best suits their practice and patient population.

View the CMS fact sheet for the final rule.

More Analysis Coming

The Academy continues to analyze this significant rule and will engage Congress to stop the cuts to surgical and specialty care. Read Washington Report Express in the coming weeks for more information on how this final rule could affect our profession and how you can get involved in our advocacy efforts.

For more information, contact healthpolicy@aao.org.