A new proposal from the Centers for Medicare & Medicaid Services (CMS) addresses a significant policy issue: the productivity-based adjustment to physician work values for Calendar Year (CY) 2026. CMS proposes a 2.5% efficiency adjustment to physician work relative value units (RVUs) and intra-service time for non-time-based services.
This adjustment differs from the hospital payment system, where productivity cuts are offset by an annual market basket update. In the physician payment system, there is no strong inflation adjustment. This means that the proposed efficiency change could lead to a long-term decrease in payment levels, which could lead to lower reimbursement for physicians. The proposal has raised concerns about its one-size-fits-all approach, which may not accurately reflect the complexities and varying costs of different medical services. Low-volume services, which have not been reviewed for a longer period, could be disproportionately affected, leading to an underestimation of the work intensity and time required for these services.
This +Insight reviews CMS’s proposal and explores how it will affect Medicare’s approach to physician payment, and why stakeholders may want to watch for developments and consider how best to engage as discussions around this topic continue.
