The old Yogi Berra aphorism “a nickel ain’t worth a dime anymore” might resonate with many physicians these days. The Medicare Physician Fee Schedule’s (MPFS) budget neutrality requirements combined with a lack of any updates to account for inflation have created a Medicare payment system that hasn’t kept pace with the rising costs of running a practice.

While a lasting solution remains elusive, the 2026 MPFS final rule provides some temporary relief and signals that the Centers for Medicare & Medicaid Services (CMS) is prioritizing primary care.¹ For example, the final rule includes an increase in the Medicare conversion factor, many common primary care codes exempted from an “efficiency adjustment” cut, a practice-expense calculation change that favors care provided in offices versus facilities, and expanded use of code G2211.

MEDICARE PAYMENT UPDATE

Here are the noteworthy changes in the MPFS for primary care physicians.

Conversion factor increase. The conversion factor is the amount Medicare pays per relative value unit (RVU). The 2026 final rule includes the most meaningful increase in the conversion factor we have seen in many years. It comes from three sources:

1. A 2.5% one-time increase mandated by H.R. 1 (also referred to as the “One Big Beautiful Bill Act”), which expires at the end of 2026,

2. A 0.75% increase for Alternative Payment Model (APM) qualifying participants (QPs) and a 0.25% increase for non-QPs (implementation of two conversion factors is required by the Medicare Access and CHIP Reauthorization Act; CMS will apply the conversion factor that aligns with your participation status from two years prior),

3. A 0.49% budget-neutrality adjustment, which is positive for just the second time in the last 10 years,² and is driven in large part by changes discussed below.

In total, the 2026 conversion factor will be $33.57 for QPs, an increase of 3.77% or $1.22 more than 2025. The conversion factor for non-QPs will be $33.40, an increase of 3.26% or $1.05 more than 2025. But most of that comes from H.R. 1, which is temporary. The American Academy of Family Physicians (AAFP) continues to urge Congress to pursue more sustained reform, such as a permanent inflationary adjustment.

Efficiency adjustment. CMS has historically relied on survey data from the American Medical Association (AMA)/Specialty Society Relative Value Scale Update Committee (RUC) to establish RVUs for the physician fee schedule. Over the last few years, CMS and others have expressed concerns about low survey response rates and the infrequency with which the RUC reviews codes. CMS estimates that, on average, there is at least a decade between when a code is introduced in the fee schedule and when the RUC reviews it. As technology and workflows improve and physicians gain more expertise, CMS believes physicians become more efficient at providing non-time-based services. Without more regular review, CMS concludes they are most likely over-valuing codes by not accounting for these efficiencies.

Thus, CMS is implementing an “efficiency adjustment” for the first time in 2026. It will start as a payment reduction of 2.5% for intraservice time (e.g., “skin-to-skin” time in procedural services) and the work RVUs of approximately 7,000 codes.

The good news is that time-based codes are exempt. This includes (but is not limited to) E/M services, care management services, behavioral health services, services on the CMS telehealth list, and maternity care codes — all of which are common in primary care. CMS also exempted new codes and time-based drug administration codes. A full list of codes subject to the efficiency adjustment is available on the CMS website (download “CY 2026 PFS Final Rule Codes Subject to Efficiency Adjustment”). CMS will recalculate the adjustment every three years. The next recalculation will be in 2029 and will reflect efficiency gains measured from 2027 through 2029.

Updates to the practice expense methodology. CMS is changing its practice expense methodology to account for the differences in indirect expenses (rent, administration costs, etc.) between facility and office-based settings. Historically, the MPFS has allocated the same indirect practice expenses, regardless of where a service was provided. This assumed that facility-based physicians also maintained an office-based practice. With more physicians practicing exclusively or almost exclusively in facilities or in practices owned by hospitals and treated as hospital outpatient departments, the previous methodology likely overstated practice expenses in the facility setting and created an imbalance that contributed to increased costs and consolidation. The revised methodology reduces the indirect practice expense RVUs allocated to codes for services done in the facility setting. Due to budget neutrality rules, this will increase payments for services provided in non-facility settings, including outpatient offices and patients’ homes. Early estimates are that the methodology change will decrease physician payments in facility settings by 7% and increase physician payments in non-facility settings by 4%.³ The AAFP will monitor the impact on physicians who work in both settings to ensure there are no unintended consequences.

Advanced Primary Care Management (APCM). Medicare introduced three new codes to report APCM services in 2025.⁴ The codes combined several existing care management and communications-based technology services to provide a more stable payment mechanism within the traditional fee-for-service system. CMS built on this work for 2026 and established three new codes for behavioral health integration that can be billed as add-on codes to the base APCM codes. (See Table 1.)

CMS did not change the base APCM codes (HCPCS G0556, G0557, and G0558), but it’s important to remember that APCM includes a performance reporting requirement. To bill for APCM, you must either report the Value in Primary Care MIPS Value Pathway (a reporting option within the Merit-based Incentive Payment System) or participate in a Medicare Shared Savings Program or a Realizing Equity, Access, and Community Health (REACH) accountable care organization. If you are in a multispecialty practice with more than 16 eligible clinicians, you will need to either form a subgroup to report the Value in Primary Care MIPS Value Pathway or report as individuals. Otherwise, you may continue to report via traditional MIPS but would not meet the performance reporting requirement for APCM services.

As part of the rulemaking process, CMS requested public input on potential avenues to waive patient cost-sharing, which currently applies to Levels 1 and 2 of APCM services (Level 3 beneficiaries are exempt). In the final rule, CMS made no changes but indicated they “will take the comments into consideration for possible future rulemaking.”⁵ The AAFP will continue to work with the agency to identify pathways to remove patient cost-sharing as a barrier to adopting the APCM codes.

Expansion of HCPCS code G2211. In recognition of the importance longitudinal relationships play in home-based primary care, CMS expanded the list of codes that can be reported with complexity add-on code G2211 to include home or residence E/M codes (CPT codes 99341, 99342, 99344, 99345, 99347, 99348, and 99350).

Telehealth. CMS made relatively few changes to their telehealth policies but did add the following services to the Medicare Telehealth Services List:

• Multiple-family group psychotherapy (CPT 90849),

• Group behavioral counseling for obesity (HCPCS G0437),

• Infectious disease add-on (HCPCS G0545),

• Auditory osseointegrated sound processor (CPT codes 92622-92623),

CMS also permanently adopted the following policies:

• Removing frequency limitations for subsequent inpatient (CPT codes 99231-99233), subsequent nursing facility (CPT codes 99307-99310), and critical care consultation service (HCPCS codes G0508-G0509) when provided via telehealth,

• Defining direct supervision that allows “immediate availability” of the supervising practitioner via audio/video real-time communications technology (excludes audio-only) for most incident-to services, except for services that have a global surgery indicator of 010 or 090,

• Allowing teaching physicians to have a virtual presence in all teaching settings, but only in clinical instances when the service is a three-way telehealth visit with the teaching physician, resident, and patient in different locations.

CMS did not extend its policy that allows distant site providers to use their practice location instead of their home address. To suppress your street address details from Medicare’s publicly reported data, you can mark the address as a “Home office for administrative/telehealth use only” in the Medicare Provider Enrollment, Chain, and Ownership System (PECOS) or email the service center at QPP@cms.hhs.gov.

Updates to social determinants of health risk assessment. CMS made significant revisions to the social determinants of health risk assessment (HCPCS code G0136) description. It will now read “administration of a standardized, evidence-based assessment of physical activity and nutrition, 5–15 minutes, not more often than every six months.” The tool used must be tested and validated through research. Examples of nutrition assessments include the Mini-EAT tool, Starting the Conversation: Diet tool, and Short Dietary Assessment Instruments. Examples of physical activity assessments include the Physical Activity Vital Sign tool, CHAMPS Physical Activity Questionnaire for Older Adults, Rapid Assessment of Physical Activity (RAPA), or Telephone Assessment of Physical Activity (TAPA). The code is payable when either or both assessments are performed.

Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs). In 2025, CMS unbundled HCPCS code G0511 (general care management) to allow FQHCs and RHCs to report APCM services. All codes previously included in the bundle should be reported as individual services and will be paid at the national non-facility MPFS payment rate. With the introduction of the behavioral health add-on codes for APCM, noted above, CMS is taking a similar approach to HCPCS code G0512 (psychiatric collaborative care model services), which is no longer payable as of Jan. 1, 2026. FQHCs and RHCs should report the individual codes that made up G0512 or use the new add-on behavioral health integration codes if they are also providing APCM services.

As of Jan. 1, 2026, FQHCs and RHCs are also required to report the individual codes that made up HCPCS code G0071 (virtual communications), which CMS has similarly unbundled. These include HCPCS codes G2010 and G2250, and CPT code 98016. The services will be paid at the national non-facility MPFS payment rate.

Through 2026, CMS will calculate the payment amount for telehealth services billed using HCPCS code G2025 based on the average amount for all Medicare telehealth services paid under the MPFS, weighted by volume for those services reported under the MPFS. The telehealth changes noted above also apply to FQHCs and RHCs.

CPT CODE CHANGES

CPT 2026 ushers in more than 400 new and revised codes, more than half of which are either new proprietary laboratory analyses codes or Category III CPT codes (temporary codes to describe emerging technology). CPT also introduced several new codes describing AI services that augment physician services.

Remote physiologic and therapeutic monitoring and treatment codes. One of the key updates for 2026 is the revision of guidelines and codes for remote monitoring services. The changes reduce required times for the device supply codes and the time associated with management services, which allows clinicians to report the services for more patients and conditions.

CPT added five codes for both physiological and therapeutic monitoring that allow device charges when clinicians perform monitoring for 2–15 days in a 30-day period. CPT also modified the existing device codes to include specific language to denote monitoring used for 16–30 days in a 30-day period. CPT added two new codes to allow reporting of physiologic and therapeutic management services for the first 10 minutes in a calendar month and modified the existing codes to report services of 20 or more minutes in a calendar month. (See Table 2.)

Immunization counseling, administration, and product codes. CPT created three new time-based codes for immunization counseling when the immunization is not given on the same date of service. (See Table 3.) Clinicians can report the codes for counseling patients of any age. Time spent counseling for immunizations that were administered on the same date of service should not be counted toward the time for the new codes. Note that CMS did not adopt these codes. They have a status of “I” (not valid for Medicare purposes). Physicians may use E/M codes to report immunization counseling to Medicare where an immunization is not administered and may select the level of visit based on MDM or total time.

CPT also created two new product codes for combination COVID-19/flu vaccines:

• 90612 Influenza virus vaccine, trivalent, and severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), vaccine, mRNA-LNP, 31.7 mcg/0.32 mL dosage,

• 90613 Influenza virus vaccine, quad-rivalent, and SARS-CoV-2 vaccine, mRNALNP, 40 mcg/0.4 mL dosage.

These codes should be reported with COVID-19 vaccine administration code 90480 when administered in the physician’s practice. Unlike the other adult vaccine administration codes, 90480 includes counseling. To account for visits where patients receive vaccines that include COVID and non-COVID components, CPT modified the descriptor for 90480 to specify that it is for the “first or only component of each vaccine administered.” In addition to reporting 90480, report new code 90481, which is a tracking code with no RVUs that reflects administration without counseling for the additional non-COVID components. Codes 90480 and 90481 apply to patients of all ages. However, if you provide counseling on the non-COVID vaccine or toxoid components to patients younger than 18, you can report 90461 instead of 90481. There is no similar code to report counseling for patients 18 and up.

Other CPT vaccine code changes include a new code for a recombinant chikungunya virus vaccine (90593), two avian flu vaccines (90635 and 90631), and a code for a new dosage of an RSV monoclonal antibody (90382). (Click for more on coding RSV antibodies and vaccines.)

These codes were made available in 2025 as part of the CPT triannual early release schedule but will be listed as new in the CPT 2026 Professional Edition. For updated information on vaccine codes throughout the year, check the AMA website.

Pathology codes. The following new pathology codes may also be of interest to family medicine practices:

• 87494 Chlamydia trachomatis and Neisseria gonorrhoeae, multiplex amplified probe technique,

• 87812 Infectious agent antigen detection by immunoassay with direct optical (i.e., visual) observation; SARS-CoV-2 and influenza virus types A and B.

WHAT TO DO

CMS did not make extensive changes to their various alternative payment programs for 2026, but there are some that participating practices should know (see the box on the right). This is also not a complete list of all the changes to coding and payment in 2026, but it highlights the major changes for primary care practices. Practices can use this information to do the following:

• Verify billing systems are up to date,

• If you are in a large multispecialty group and are interested in billing for APCM services, talk with your administration about the new subgroup reporting requirement,

• Familiarize yourself with updated quality measure requirements and update your workflows and templates accordingly. Measure specifications can be found on the QPP website. Check with your provider relations representatives to know what is required for your private payers.