in effect
This is a binding final rule issued by the Centers for Medicare & Medicaid Services (CMS), effective January 1, 2026, that sets the payment rates and coverage policies Medicare uses to pay doctors and other practitioners for services billed under Medicare Part B. It is published annually and carries the force of law once finalized.
Starting in 2026, Medicare will use two separate conversion factors — the dollar multiplier that turns relative value units into actual payment amounts — instead of one: providers in qualifying Alternative Payment Models will see a projected increase of $0.39 per unit (about 1.2%) over the 2025 rate of $32.3465, while all other providers will see a projected increase of $0.23 per unit (about 0.7%). The rule updates the relative value units assigned to hundreds of specific medical services to reflect current practice costs, including new codes for advanced primary care management, digital mental health treatment, and skin substitutes. It codifies rules for the Medicare Prescription Drug Inflation Rebate Program — requiring drug manufacturers to pay rebates when Part B or Part D drug prices rise faster than inflation — and adjusts how 340B-discounted units are counted in the Part D rebate calculation starting October 1, 2025. The Medicare Shared Savings Program rules are updated for how Accountable Care Organizations are assigned patients and how their performance benchmarks are calculated, and the Quality Payment Program thresholds and reporting requirements are revised for the 2026 performance year.
Physicians, nurse practitioners, physician assistants, therapists, and other practitioners who bill Medicare Part B will receive adjusted payment rates — higher or lower depending on how their specific services were revalued — beginning January 1, 2026. Drug manufacturers whose prices have outpaced inflation face rebate obligations to Medicare, and Accountable Care Organizations must comply with updated benchmarking and assignment rules. Rural Health Clinics, Federally Qualified Health Centers, and ambulance suppliers also face updated payment and billing requirements under this rule.