The Centers for Medicare and Medicaid Services (CMS) has issued its Calendar Year (CY) 2026 Medicare Physician Fee Schedule final rule, putting in place measures included in President Trump’s “Big Beautiful Bill” and making other changes, like a new process to make telehealth services more Medicare-reimbursable.

For CY 2026, CMS said it is streamlining the process for adding services to the Medicare Telehealth Services List. “We are simplifying our review process by removing the distinction between provisional and permanent services and limiting our review on whether the service can be furnished using an interactive, two-way audio-video telecommunications system,” the agency said.

CMS said the rule permanently removes frequency limitations for subsequent inpatient visits, subsequent nursing facility visits, and critical care consultations.

“We are also finalizing, for services that are required to be performed under the direct supervision of a physician or other supervising practitioner, to permanently adopt a definition of direct supervision that allows the physician or supervising practitioner to provide such supervision through real-time audio and visual interactive telecommunications [excluding audio-only],” CMS said.

The agency said the rule did not propose to extend its current policy to allow teaching physicians to have a virtual presence for purposes of billing for services furnished involving residents in all teaching settings, which had been in effect through Dec. 31, 2025.

“However, in response to public comments highlighting the extent to which this flexibility has been integrated into clinical practice, we are finalizing allowing teaching physicians to have a virtual presence in all teaching settings, only in clinical instances when the service was furnished virtually, on a permanent basis,” CMS said.

Some Payments Rise, Others Do Not

Other highlights of the final rule are:

-      CMS increased physician reimbursement by 3.77 percent for qualifying providers in advanced alternative payment models and 3.26 percent for other providers for CY 2026. Some 2.5 percent of the increase originated in the One Big Beautiful Bill Act enacted on July 4. 

-      CMS changed indirect practice expense accounting, effectively lowering the amount facility-based physicians are paid for administrative expenses. “Since the methodologies were established decades ago, there has been a steady decline in the number of physicians working in private practice, with a corresponding rise in physician employment by hospitals and health systems,” CMS said. “Therefore, we believe that the allocation of indirect costs for PE RVUs in the facility setting at the same rate as the non-facility setting may no longer reflect contemporary clinical practice.”

AHCA/NCAL Assesses

In response to the final rule, Dan Ciolek, associate vice president of therapy advocacy at the American Health Care Association/National Center for Assisted Living (AHCA/NCAL), said “we appreciate the 3.26 percent increase for Medicare Part B services such as outpatient therapy services furnished by skilled nursing providers as well as the revised telehealth provisions that will help ensure more timely and consistent access to care for seniors.”

In addition, he said the skilled nursing sector is “thankful that CMS considered stakeholder comments and removed all time-based outpatient therapy codes from the proposed efficiency adjustment list.”

“At the same time, we are concerned that the finalized site of service payment differential may create physician access challenges, and that several now-expired statutory telehealth access policies are beyond the authority of CMS to extend. We will continue to advocate for solutions to these challenges to ensure access to skilled nursing care remains top priority,” Ciolek said.

Read the fact sheet for the Physician Fee Schedule at https://tinyurl.com/yp75chv2.

Comments, or questions? Contact Patrick Connole at pconnole@parkplacelive.com.