CY 2026 physician fee schedule proposed rule: What to expect, how to prepare

On July 14, 2025, CMS issued its calendar year (CY) 2026 physician fee schedule proposed rule, and with it comes several significant changes to Medicare payment policies, most notably a 3.8% payment increase for physicians in alternative payment models (APM) and a 3.3% increase for those in non-APMs payment models. In this blog post, we’ll dive into some of the most important proposals within the 1,800-page CMS physician fee schedule proposed rule.

Physician payment🔗

Significant payment-related changes outlined in the CY 2026 physician fee schedule proposed rule include the following:

• Changes to how CMS calculates the Medicare Economic Index productivity adjustment
• Negative 2.5% efficiency adjustment to the work relative value unit and corresponding intraservice portion of physician time of non-time-based services (e.g., procedures and radiology)
• Revisions to the practice expense payment methodology to better reflect indirect costs for office-based versus facility-based settings
  

Telemedicine

The CY 2026 physician fee schedule proposed rule also includes various proposed telemedicine changes, most notably the deletion of the “provisional” distinction, a move some experts say would further embed telehealth into Medicare’s long-term care model. Instead of a provisional distinction, all services on the telehealth list would be considered permanent.

In addition, in its CY 2026 physician fee schedule proposed rule, the agency recommends adding the following services to the telehealth list for CY 2026:

• Multiple-family group psychotherapy (90849)
• Group behavioral counseling for obesity (G0473)
• Infectious disease add-on (G0545)
• Auditory osseointegrated sound processor (92622, 92623)

It asks to delete social determinants of health risk assessment (G0136) from the telehealth list.

Advanced primary care management🔗

In its CY 2026 physician fee schedule proposed rule, CMS proposes to create three add-on codes (i.e., GPCM1, GPCM2, and GPCM3) that physicians providing advanced primary care management (APCM) can report when they (or their auxiliary personnel under general supervision) also provide collaborative care management services or behavioral health integration during the same month.

According to the CMS physician fee schedule proposed rule, the new add-on codes would replace time-based requirements of existing behavioral health integration and psychiatric collaborative care model services. Physicians would report the new add-on codes with an APCM base code (G0556, G0557, or G0558).

Note the following new codes referenced in the CY 2026 physician fee schedule proposed rule:

• GPCM1 mirrors CPT 99492, which is the CPT code for the first month of collaborative care management services.
• GPCM2 mirrors CPT 99493, which is the CPT code for subsequent months of collaborative care management services.
• GPCM3 mirrors CPT 99484, which is a CPT code for 20 minutes or more of behavioral health integration services.

For example, a primary care physician delivers an initial month of APCM services and an initial month of collaborative care management services to a patient with multiple chronic conditions during the same calendar month. According to the CY 2026 physician fee schedule proposed rule, they would report G0556 and GPCM1.

Skin substitutes🔗

In its CMS physician fee schedule proposed rule, the agency said it may group similar products or services into a single billing code and use a single payment amount for reimbursement. According to the CY 2026 physician fee schedule proposed rule, the agency expects these reforms to slash Medicare spending on skin substitutes by nearly 90%, without compromising patient access or care quality. The agency also hopes that grouping payments and setting a flat rate will encourage providers to choose products supported by strong clinical evidence and competitive pricing, reduce administrative burden, and promote decision-making centered on patient care.

Ambulatory specialty model🔗

Another CMS proposal in the CY 2026 physician fee schedule proposed rule is to require certain providers to participate in a new Ambulatory Specialty Model focused on specialty care for beneficiaries with heart failure and low back pain. According to the CMS physician fee schedule proposed rule, the model would begin in January 2027 and run for five performance years, ending in December 2031.

Some good news? The new model outlined in the CY 2026 physician fee schedule proposed rule would provide participants with enhanced performance data related to episode-based costs, utilization, and quality, enabling physicians to gain deeper insight into their patient population’s care patterns and care needs.

Digital mental health treatment🔗

The CY 2026 physician fee schedule proposed rule recommends expanded coverage for FDA-classified digital therapy devices to include those used in the treatment of ADHD, as part of behavioral health treatment plans. Through its CMS physician fee schedule proposed rule, CMS is also seeking feedback on establishing payment policies for other digital therapy devices under various clinical categories. Something to keep in mind: Many commercial plans refuse to recognize new digital mental health treatment, or they require burdensome pre-authorizations.

Remote patient monitoring🔗

In its CY 2026 physician fee schedule proposed rule, CMS proposes the following remote patient monitoring updates effective January 1, 2026:

• New code 99XX4 that would cover 2-15 days of data transmission per 30-day period via RPM devices. Note that many private payers still require 16+ days of RPM data.
• New code and 99XX5 that would cover fewer than 20 minutes of interactive communication per month respectively.
• Revised code 99454 that would cover 16-20 days of data transmission.
  

Chronic disease management🔗

In alignment with the “Make America Healthy Again” executive order, CMS seeks feedback on expanding digital care to prevent and manage chronic illness, specifically around the following:

• Coverage of wearable devices and FDA-cleared digital tools
• Payment models that support lifestyle change through virtual care
• Reimbursement for medically tailored meals

In addition, CMS proposes allowing providers to deliver the Medicare Diabetes Prevention Program (MDDP) entirely online through December 2029, though it would require real-time interaction with human coaches, not artificial intelligence. However, it’s important to note that CMS’s virtual-only MDPP model is significantly more progressive than what is currently available from commercial payers.

Prepare for potential changes🔗

Physicians can prepare for these and other potential changes outlined in the CY 2026 physician fee schedule proposed rule by:

• Aligning workflows, documentation, and team collaboration with new ASM discussed in the set to launch in 2027
• Determining whether and how behavioral health integration and/or collaborative care management can boost revenue via proposed add-on codes
• Evaluating whether new opportunities inherent in MDDP changes as well as remote patient monitoring and digital mental health treatment for ADHD can benefit patients and the medical practice overall
• Understanding the financial impact of a payment increase versus a -2.5% efficiency adjustment discussed in the CMS physician fee schedule proposed rule
• Updating operational workflows and billing documentation to align with permanent telehealth services
  

Comment on the CY 2026 physician fee schedule proposed rule🔗

Between now and September 12, 2025, it’s important for providers and others to comment on the CY 2026 physician fee schedule proposed rule. This includes proposed changes to the Quality Payment Program and Medicare Shared Savings Program. Submit your thoughts through this link. And be sure to leverage the right technology to ease this and other regulatory changes. Contact Medusind to learn more.