2026 Medicare Physician Fee Schedule proposes changes to payment and G2211

The Centers for Medicare & Medicaid Services (CMS) recently released the proposed rule for the 2026 Medicare Physician Fee Schedule (MPFS). Below are proposals of interest to family physicians:

Conversion factor payment adjustments

The 2026 MPFS proposes two separate conversion factors (the amount Medicare pays per relative value unit) — one for physicians or other clinicians who are qualifying participants (QPs) in an advanced alternative payment model and another for those who are not. The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) mandated the separate conversion factors starting in 2026. Both are expected to be an increase compared to the 2025 conversion factor. The increase is attributable to three factors:

1. A one-time 2.5% increase to the conversion factor due to the “One Big Beautiful Bill Act (H.R. 1)” Congress passed at the beginning of July.
2. An additional 0.55% budget-neutrality adjustment. This is higher than it has been in the past few years because CMS is also proposing to apply a new “efficiency adjustment” of -2.5% to work relative value units (wRVUs) and the corresponding intra-service portion of physician time of non-time-based services, including E/M codes. In short, CMS is reducing the value of certain codes it believes have been historically overvalued, and then increasing the overall conversion factor by 0.55% to maintain budget neutrality. Overall, CMS projects that the proposed efficiency adjustment would not reduce payment by more than 1% for most specialties. 
3. A 0.75% increase for those who meet the criteria to be a QP in an advanced alternate payment model, and a 0.25% increase for those who do not.

All told, the proposed conversion factor for QPs is $33.59, which is an increase of $1.24, or 3.83%, from the 2025 conversion factor of $32.35. The proposed conversion factor for non-QPs is $33.42, which is an increase of $1.07, or 3.3%.

Practice expense methodology change

CMS is also proposing to change how it calculates indirect practice expense (PE) in a way that should benefit physicians who work outside of “facility” settings (e.g., hospitals, ambulatory surgical centers, or skilled nursing facilities).

The current methodology presumes roughly equal indirect costs for physicians across sites of service. But CMS now believes recent trends in physician ownership merit adjusting this to account for potentially duplicative payments for physicians who practice in facility settings.  Therefore, CMS proposes to only recognize 50% of the physician’s work of facility-based services in the indirect cost method. Because MPFS changes require budget neutrality, this change is expected to decrease physician payments for services provided in facility settings by 7%, and increase physician payments for services provided in non-facility settings (e.g., outpatient offices, urgent care clinics, or patients' homes) by 4%.

Expansion of G2211 and new APCM add-on codes

CMS is also proposing coding changes that should be helpful for family physicians:

• Expanded use of G2211, an add-on code for visit complexity. In addition to allowing G2211 to be reported with office/outpatient evaluation and management (E/M) services, CMS proposes to also allow it with E/M services provided in the patient’s home or temporary private residence (CPT codes 99341, 99342, 99344, 99345, 99347, 99348, 99349, 99350). 
• Three optional add-on codes for collaborative care management (CoCM) and behavioral health integration (BHI) services. To complement the advanced primary care management (APCM) services that were finalized in the 2025 MPFS, CMS proposes to establish new codes clinicians could report with the APCM base code in the same month. Like APCM, the CoCM and BHI add-on codes would not have any time thresholds. CMS is also issuing a request for information (RFI) about how they should consider cost-sharing for APCM services and whether they should incorporate preventive services (e.g., annual wellness visit, depression screening) into the APCM bundle.

CMMI’s Ambulatory Specialty Model

The Center for Medicare & Medicaid Innovation (CMMI) is proposing a new Ambulatory Specialty Model (ASM) that would run from Jan. 1, 2027, through Dec. 31, 2031. It will focus on care provided by specialists to Medicare beneficiaries with heart failure and low back pain. The proposed model would be mandatory for certain specialists. While family medicine is not among the required participants, CMMI aims to promote preventive care by incentivizing participants to ensure their patients have a regular source of primary care and are screened to help identify early risks and signs of chronic conditions.

Alternative payment programs

CMS proposed minimal changes to the Medicare Shared Savings Program and Quality Payment Program. On the MSSP side, CMS proposes to limit the amount of time accountable care organizations (ACOs) inexperienced with Medicare performance-based risk initiatives can participate in one-sided models to a maximum of five years under the ACO’s first agreement period. For the QPP, CMS is proposing changes to the total per capita cost measure specifications and is issuing several RFIs related to various aspects of health IT within the QPP.

The MPFS proposed rule was published in the Federal Register on July 16, and comments are due to CMS by Sept. 12, 2025. For additional information, please see the related CMS news release, MPFS fact sheet, QPP fact sheet, and MSSP fact sheet. The AAFP developed an executive summary that provides a more comprehensive look at the proposals relevant to primary care.

— Erin Solis, Manager, Practice & Payment at the American Academy of Family Physicians

Posted on July 29, 2025