Medicare Physician Fee Schedule cuts cardiologist pay because CMS says doctors should be more efficient
The Centers for Medicare and Medicaid Services (CMS) posted the 2026 Medicare Physician Fee Schedule (MPFS) final rule Oct. 31, which includes a negative 2.5% efficiency adjustment that will impact most physician services. The new adjustment lowers what Medicare will pay for services because CMS said cardiologists should become more efficient in what they do as time goes on and with the help of new technologies.
The adjustment, which will be applied to the vast majority of physician services, was opposed by cardiology and most other medical societies. It will be applied to the work relative value units (RVUs) and corresponding intraservice portion of physician time for non-time-based services. The only change CMS made from the policy in the proposed rule was exempting RVUs for new CPT codes in 2026.
CMS proposed the reduction in pay because the agency believes doctors will become more proficient at various procedures over time and by using new technologies. CMS also believes new automation technologies like artificial intelligence are helping speed decision making or time-consuming tasks like measurements, or pulling relevant prior patient records for review. CMS said the change promotes value-based care by better aligning payments with provider effort.
Some specialty medical societies are warning this just a new way to reduce physician reimbursement that could potentially harm patient access to care.
"We all thought maybe we were getting a slight increase in the physician fee schedule, not something that happens very often. But in fact, when you look at the efficiency adjustment, if you look at the practice expense adjustment, there's a number of our professional components on our interventional procedures that are getting double digit hits," explained Cathie Biga, MSM, immediate past president of the American College of Cardiology (ACC) in an interview with Cardiovascular Business.
For example, she said, left atrial appendage occlusion (LAAO) procedures are getting hit with a 27% cut. Biga added that large cuts are also coming for cardiac ablations and percutaneous coronary interventions (PCI).
CMS said it used the Medicare Economic Index (MEI) productivity adjustment percentage looking back over a five-year period to calculate the efficiency adjustment. But some medical groups are concerned this new adjustment could be used to further reduce payments in the future.
"CMS said it intends to apply the efficiency adjustment every three years with no floor on how much a service could be devalued," warned the American Society of Nuclear Cardiology (ASNC) in an email to its members Monday. "CMS was not swayed by comments from ASNC and others opposing the blanket adjustment. The agency maintains that current valuations for the most services do not account for efficiencies gained over time."
ACC President Christopher Kramer, MD, FACC, said while the physician fee schedule includes the 2.5% increase in Medicare reimbursement passed by Congress earlier this year, it also relies on new and potentially disruptive payment policies like the efficiency adjustment. He said this will significantly impact clinicians and patients during an already uncertain time in healthcare.
"In particular, the ACC is concerned that CMS chose to keep the proposed changes to site of service payment differential and efficiency adjustment, despite widespread concerns from the medical community. These changes overlook the real overhead costs practices face and assume indefinite efficiency gains that could devalue essential services over time. These policies risk undermining practice sustainability across all specialties and limiting access to care for Medicare patients," Kramer explained.
Conversion factors in calculating physician payments
The Medicare conversion factors reflect statutory adjustments, including the positive 2.5% adjustment approved by Congress earlier this year, a positive 0.49% budget-neutrality adjustment resulting from misvalued code changes, and the negative 2.5% efficiency adjustment.
For 2026, there are two conversion factors, and which one applies depends on whether a physician is involved is an alternative payment model qualified participant (APM QP). ASNC provided the following figures:
• Non-APM QP Conversion Factor: $33.4009 (+3.26% change from 2025)
• APM QP Conversion Factor: $33.5675 (+3.77% change from 2025)
Medicare practice expense reductions ignored AMA data
The AMA collects data used by CMS to help calculate reimbursements. However, the AMA’s Physician Practice Information Survey for updating 2026 practice expense (PE) relative values was rejected by CMS this year. Instead, CMS is reducing the physician’s indirect PE payment for services provided in a facility even if the physician is not employed by the hospital.
CMS said its new PE policy reflects the increased number of physicians practicing in hospital-owned practices and employed directly by hospitals while supporting site-neutrality goals.
This change caused major concern by both the ACC and the Society for Cardiovascular Angiography and Interventions (SCAI) that this could signal CMS looking to set policy without input from the House of Medicine through the AMA. These concerns were shared by both groups during a legislative session at the Transcatheter Cardiovascular Therapeutics (TCT) meeting last week.
ASNC said the new PE methodology will not apply to nuclear SPECT or PET imaging services. But it will affect cardiology MPFS payments overall. Office payments will increase by 5%, and MPFS payments for services provided in facilities will decrease by 7%, ASNC said.
MGMA has concerns about 2026 payments
The Medical Group Management Association (MGMA) had several concerns about the physician fee schedule and the sustainability of the financial sustainability of Medicare.
"While we are pleased to see a marginal increase to the 2026 Medicare conversion factors, today’s final rule includes many policies that will threaten the financial sustainability of medical groups and cause significant disruption to their operations," explained Anders Gilberg, senior vice president, government affairs at MGMA in a statement.
He said member medical groups have had to deal with a 2.83% cut to the Medicare conversion factor all of 2025, and the 2026 conversion factors are barely an increase over 2024 payment levels. This does not remedy previous cuts that medical groups have absorbed due to what he called "flawed policy."
"The fee schedule also does not address potential future cuts resulting from budget neutrality. Further undermining the 2026 conversion factor increases are arbitrary cuts to work and practice expense RVUs that do not accurately reflect the cost of providing care and disproportionately impact certain specialties," Gilberg said.
Taken together, he said these these policies reflect systemic inadequacies in the Medicare payment structure and he said the only solution is for Congress to take action by passing legislation to provide an annual inflationary update to physician payments. Without this, he said, Medicare is not on a sustainable trajectory. This sentiment has been echoed by most medical groups.
Dave Fornell has covered healthcare for more than 17 years, with a focus in cardiology and radiology. Fornell is a 5-time winner of a Jesse H. Neal Award, the most prestigious editorial honors in the field of specialized journalism. The wins included best technical content, best use of social media and best COVID-19 coverage. Fornell was also a three-time Neal finalist for best range of work by a single author. He produces more than 100 editorial videos each year, most of them interviews with key opinion leaders in medicine. He also writes technical articles, covers key trends, conducts video hospital site visits, and is very involved with social media. E-mail: [email protected]