The Centers for Medicare & Medicaid Services (CMS) has released its proposed Medicare Physician Fee Schedule for 2026, and includes several significant shifts in physician payment schedules, particularly those in primary care and complex care management.

Among the most notable changes is a proposed 2.8% reduction to the Medicare conversion factor, which would lower the base rate used to calculate physician payments. This reduction could put added financial strain on practices already grappling with inflation and staffing shortages.

On the positive side, CMS proposes expanding and enhancing payment for primary care, care management, and mental health services. These efforts seek to support better, comprehensive, team-based care models and close persistent gaps in behavioral health access.

The California Medical Association (CMA) voiced concern over the proposed cut, warning it could threaten practice sustainability and patient access. CMA continues to advocate for a long-term fix to the outdated Medicare payment system, including eliminating the budget neutrality rules that contribute to year-after-year reductions.

Public comments on the proposal are due by September 9, 2025. Final rules are expected later this year.