Update: The Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2026 Medicare Physician Fee Schedule Final Rule. STS has compiled a summary of the rule’s key provisions affecting cardiothoracic surgery.
Physician Payment
Starting in the calendar year (CY) 2026, CMS will introduce two distinct conversion factors under the Medicare Access and CHIP Reauthorization Act (MACRA). Clinicians participating in Advanced Alternative Payment Models (APMs) will receive a conversion factor of $33.56, which reflects a 3.77 percent increase. Meanwhile, all other fee-for-service clinicians under the Merit-based Incentive Payment System (MIPS) will have a conversion factor of $33.40, representing a 3.26 percent increase.
This new structure, which consists of two conversion factors, replaces the previous lump-sum bonuses for physicians participating in APMs. Additionally, this marks the first time in several years that CMS has proposed a positive adjustment to the conversion factor.
It is important to note that reimbursement rates still lag behind inflation.
Efficiency Adjustment
CMS has finalized a new efficiency adjustment that will impact work relative value units (RVUs) and the intra-service time component of non-time-based services. CMS believes that efficiencies have been gained over time in the delivery of care. This adjustment could potentially reduce overall payments by approximately 1% for most surgeons.
STS needs support in preventing this policy from being implemented. Contact your representatives to oppose the efficiency adjustment and help ensure that surgeons receive fair compensation.
Practice Expenses
CMS has updated the methodology for calculating indirect practice expenses. This change involves shifting costs from facility-based services to non-facility-based services. Under the new approach, only 50% of the physician work related to facility-based services will be factored into the indirect cost calculation. As a result, this will lead to significant changes in payments for different types of service settings. Specifically, physician payments for facility-based care are projected to decrease by 7%, while payments for non-facility-based care are expected to increase by 4%.
Quality Payment Program (QPP)
CMS is moving forward with a requirement for mandatory subgroup reporting for large multispecialty groups, specifically those with 16 or more providers, that participate in a MIPS Value Pathway (MVP) during the 2026 performance year, which will impact payments for CY 2028. Currently, cardiothoracic surgery measures are included in the Surgical Care MVP, which is designed for surgical specialists to report separately from traditional MIPS. STS has submitted detailed recommendations to CMS to improve the Surgical Care MVP.
Telehealth
CMS has decided to permanently allow virtual direct supervision for most services that require it and will maintain the current policy that allows teaching physicians to supervise residents remotely during telehealth services at any training location, not just in rural areas.