LUGPA Policy Update:
CMS Releases CY 2026 Medicare Physician Fee Schedule Proposed Rule

On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released the proposed Calendar Year (CY) 2026 Medicare Physician Fee Schedule (PFS) rule, effective January 1, 2026, if finalized. The rule updates payment rates, practice expenses, telehealth policies, 340B drug rebates, and introduces a mandatory Chronic Care Model for heart failure and low back pain to improve chronic disease management.

LUGPA is evaluating the rule’s impact on independent urology practices and will submit formal comments by the September 12, 2025, deadline, collaborating with CMS and stakeholders to ensure the development of equitable policies.

Key Provisions and LUGPA Advocacy Priorities

Conversion Factor Updates

CMS proposes two conversion factors: $33.59 (+3.83%, up $1.24 from $32.35) for Qualifying Participants (QPs) in Advanced Alternative Payment Models (APMs) emphasizing quality and cost accountability, and $33.42 (+3.62%, up $1.17) for non-QPs.

These reflect a 2.5% statutory increase per the One Big Beautiful Bill Act, a 0.75% QP or 0.25% non-QP update, and a 0.55% work Relative Value Unit (RVU) adjustment. LUGPA will push for alignment with the Medicare Economic Index (MEI) to address rising practice costs and protect high-value urologic procedures, such as prostate biopsies, from budget neutrality reductions.

Specialty Impact Estimates

CMS estimates that, overall, the proposed 2026 changes would result in a 1% increase in total urology payments, reflecting a 5% increase in non-facility services and a 9% decrease in facility-based services.

CMS also released a detailed impact spreadsheet that estimates changes in RVUs by specialty across a weighted distribution. Overall, urologists are projected to experience equivalency or a modest increase.

Work RVU Efficiency Adjustments

CMS proposes a 2.5% cut to work RVUs and intraservice time for non-time-based services, based on the MEI productivity factor, while exempting time-based services such as evaluation and management, care management, behavioral health, telehealth, and maternity care. CMS will prioritize empirical time studies for future valuations. LUGPA opposes these broad cuts, which may disproportionately affect urology, and will advocate for exemptions and urology-specific time data to ensure fair reimbursement.

Practice Expense and Malpractice Updates

CMS proposes recognizing higher indirect costs in office-based settings using Medicare Outpatient Prospective Payment System (OPPS) data for services like radiation treatment, alongside updates to geographic practice cost indices (GPCIs) and malpractice RVUs. LUGPA supports this approach but will seek urology-specific cost inputs and clear implementation guidelines to ensure accuracy and fairness.

Telehealth Enhancements

CMS proposes simplifying the Medicare telehealth services list by eliminating provisional versus permanent status distinctions, evaluating services based on real-time, two-way audio-video feasibility. The rule extends audio-only telehealth for patients unable to use video, permanently removes frequency limits on subsequent inpatient visits, nursing facility visits, and critical care consults, and allows telehealth billing by Federally Qualified Health Centers (FQHCs) and Rural Health Clinics (RHCs) through 2026. LUGPA supports these changes and will advocate for urology-specific telehealth codes, including pre- and post-operative care, to enhance patient access.

Supervision Policy Reversal

CMS proposes ending virtual supervision by teaching physicians in all settings, requiring in-person supervision during key care portions in metropolitan areas starting in 2026, while retaining the rural exception. LUGPA will assess the impact on urology training programs and advocate for policies balancing educational needs with practice efficiency.

340B and Drug Rebate Policy

CMS proposes excluding 340B drug units from Part D inflation rebate calculations starting January 1, 2026, and creating a voluntary 340B claims data repository. LUGPA supports the exclusion but will work to reduce administrative burdens for participating practices.

LUGPA is committed to securing fair reimbursement, minimizing administrative burdens, and ensuring that Medicare patients have access to high-quality urologic care. We will engage with CMS and stakeholders to advocate for policies tailored to the needs of independent urology practices.