CMS finalization of "efficiency rule" - 2.5% wRVU reduction every 3 years, indefinitely

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Medicare finalizes controversial cut to specialty care next year

The CMS finalized the Medicare physician fee schedule for 2026 on Friday, one day before the statutory deadline. It includes an overall payment hike and a few policies that are deeply unpopular with specialists.

www.healthcaredive.com

Medicare has locked in a controversial pay cut for specialty doctors next year, normalizing reimbursement between specialists and primary care doctors and curbing the influence of a powerful physician association in setting rates.

The CMS finalized the 2026 Medicare physician fee schedule on Friday. The massive payment rule includes a so-called “efficiency adjustment,” which reduces payment for thousands of services including surgeries, outpatient interventions, pain management and more starting next year.

The -2.5% adjustment is meant to account for non-time based services becoming more efficient over time as technology improves and workflows become smoother. As a result, they’re easier to perform, so Medicare is overpaying, regulators say.

The -2.5% hit applies to all codes except those that are based on time, like evaluation and management services, behavioral health services and care management.

Taken together, the efficiency adjustment and lower rates for facility services will results in more than one-third of oncologists facing cuts between 10% and 20% next year, the AMA said. Meanwhile, 37% of obstetricians and gynecologists will see their reimbursement drop.

The CMS also finalized a new mandatory payment model meant to increase accountability for specialists treating beneficiaries with heart failure and low back pain, two significant areas of Medicare spending.

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www.federalregister.gov

"In the CY 2026 PFS proposed rule (90 FR 32403) we stated that if the proposed methodology to calculate the efficiency adjustment was finalized for CY 2026, we proposed to apply the efficiency adjustment to the intraservice portion of physician time and work RVUs every 3 years. We stated that this timing would imply that the next efficiency adjustment after CY 2026 would be calculated and applied in CY 2029 PFS rulemaking, reflecting efficiency gains measured from 2027 through 2029"

The changes to about 7700 CPT codes: https://www.cms.gov/files/zip/cy-2026-pfs-final-rule-codes-subject-efficiency-adjustment.zip

Just some examples that pertain to a diagnostic radiologist:

1. ⁠CTAP with contrast: 1.82 --> 1.78
2. ⁠CTA chest: 1.82 --> 1.78
3. ⁠Abd MRIs and pelvis MRIs: 2.2 --> 2.15
4. ⁠Transvaginal US: 0.69 --> 0.67
5. ⁠RUQ US 0.59 --> 0.58

Expect similar cuts every 3 years.

 

[MD46]

Thank you for sharing this however to clarify from Oncology standpoint:

The Association for Clinical Oncology (ASCO) analysis of the finalized rule shows a clear payment differential:

Community/Non-Facility Setting (Your Practice): Projected average payment increase of approximately $6%.

Facility Setting (Hospital-Based Practices): Projected average payment decrease of approximately $11%.
This demonstrates a clear, intentional shift in CMS policy to financially incentivize care in the lower-cost, independent practice setting

So overall, hospital based and employed practices are taking a hit and private possibly getting some increase.

For time based billing we can always bill on total time which includes review of chart and communicating with other doctors etc etc which can fulfill requirements for level 5 visits for most chemotherapy patients. Not sure if there is going to be too much hit there.

Just my 2 cents

 

[whoknows2012]

Thank you for sharing this however to clarify from Oncology standpoint:

The Association for Clinical Oncology (ASCO) analysis of the finalized rule shows a clear payment differential:

Community/Non-Facility Setting (Your Practice): Projected average payment increase of approximately $6%.

Facility Setting (Hospital-Based Practices): Projected average payment decrease of approximately $11%.
This demonstrates a clear, intentional shift in CMS policy to financially incentivize care in the lower-cost, independent practice setting

So overall, hospital based and employed practices are taking a hit and private possibly getting some increase.

For time based billing we can always bill on total time which includes review of chart and communicating with other doctors etc etc which can fulfill requirements for level 5 visits for most chemotherapy patients. Not sure if there is going to be too much hit there.

Just my 2 cents

Re the last piece, that was my sense too