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LUGPA Policy Brief - Provider Reimbursement Stability Act Advances Unanimously in House Ways and Means Committee

June 2026

At-a-Glance Essentials

What’s Changing

H.R. 8163 would modernize key components of the Medicare Physician Fee Schedule (MPFS) by updating the outdated budget neutrality framework, improving practice expense data updates, and establishing guardrails around annual payment fluctuations.

Why It Matters

Independent physician practices continue to face growing financial instability as Medicare reimbursement fails to keep pace with inflation and rising practice costs. The current MPFS structure accelerates consolidation and threatens patient access to community-based specialty care.

LUGPA Position

The Large Urology Group Practice Association (LUGPA) strongly supports H.R. 8163 as an important bipartisan step toward improving payment stability, predictability, and accuracy within Medicare physician reimbursement.

Ways and Means Committee Markup — May 21, 2026

The House Committee on Ways and Means favorably reported H.R. 8163, the Provider Reimbursement Stability Act of 2026, as amended by an Amendment in the Nature of a Substitute. The bill advanced by a unanimous roll call vote of 44 yeas and 0 nays.

Members emphasized the growing financial strain facing physician practices under the current MPFS structure and the need for greater payment stability amid inflationary pressures and challenges to independent practice sustainability. Several members highlighted the importance of modernizing the budget neutrality framework to reduce unnecessary payment volatility.

Background

LUGPA strongly supports the Provider Reimbursement Stability Act (H.R. 8163), bipartisan legislation introduced by Rep. Greg Murphy, M.D. (R-NC) and colleagues on March 30, 2026.

The legislation addresses longstanding structural deficiencies within the Medicare Physician Fee Schedule (MPFS) that contribute to payment volatility and financial uncertainty for independent physician practices.

Independent urology groups and other community-based specialty practices face mounting economic pressures. Medicare physician payments have consistently failed to keep pace with inflation and increasing practice costs, while the MPFS budget neutrality framework—largely unchanged since 1989—can trigger broad reimbursement reductions following relatively modest coding or valuation updates.

These pressures continue to accelerate healthcare consolidation, reduce competition, and threaten patient access to high-quality, cost-effective specialty care delivered in community settings.

Key Provisions of H.R. 8163

The legislation modernizes several core components of the MPFS while maintaining overall budget neutrality requirements. Key reforms include:

  • Raising the budget neutrality threshold from $20 million to $54.3 million and indexing it to the Medicare Economic Index (MEI), with updates occurring at least every five years.
  • Requiring CMS to reconcile projected versus actual utilization using claims-based data for newly unbundled or revalued services.
  • Mandating regular updates to practice expense inputs—including clinical labor, supplies, and equipment costs—at least every five years.
  • Establishing payment stability guardrails beginning in 2027 by limiting annual conversion factor adjustments to ±2.5%, excluding certain legislatively mandated updates.

LUGPA’s Position

LUGPA strongly supports H.R. 8163 as a meaningful and constructive step toward greater reimbursement stability, accuracy, and predictability within Medicare physician payment policy.

The reforms included in the legislation would help independent physician practices make long-term investments in staffing, technology, infrastructure, and patient care delivery. More stable reimbursement policies are essential to preserving physician-led specialty practices and maintaining patient access to community-based care.

While H.R. 8163 does not fully address the broader need to permanently align Medicare physician reimbursement with real-world practice cost growth, the legislation represents important progress on several technical reforms that LUGPA has long advocated.

Next Steps

LUGPA will continue to monitor H.R. 8163 as it advances through the legislative process, including consideration by the full House (potentially via the House Energy and Commerce Committee) and the Senate.

LUGPA urges Congress to support this legislation and broader physician payment reforms that ensure Medicare reimbursement more accurately reflects rising practice costs, supports independent medical practices, and preserves patient access to high-quality specialty care in community settings.