Primary care providers are expected to see higher pay in 2026, even though the Centers for Medicare and Medicaid Services (CMS) will be cutting the work relative value units for more than 8,000 CPT codes in the new year.

That’s the word from the 2026 Medicare Physician Fee Schedule Final Rule, which CMS released on October 31.

The Final Rule included multiple bombshells that are relevant to physician practices that accept Medicare, but the bottom line is that primary care is among the few specialties expected to see an uptick in reimbursement effective January 1, 2026.

CMS to Debut Two Separate Conversion Factors

The most reliable way to calculate Medicare payment rates involves the use of a conversion factor. This is a figure set by the government, and it’s unlikely to change until the next calendar year. To determine the amount of reimbursement you’ll receive for any given service, you can multiply that year’s conversion factor by the relative value units (RVUs) assigned to the corresponding CPT code.

CMS issues a new conversion factor (CF) in each year’s Medicare Fee Schedule Final Rule. However, this year, for the first time, CMS will release two separate conversion factors.

The difference between the two conversion factors will hinge on whether the provider participates in a qualifying alternative payment model (APM):

  • For providers participating in an APM: The 2026 CF is $33.5675, a 3.77% increase from the 2025 CF.

  • For providers not participating in an APM: The 2026 CF is $33.4009, a 3.26% increase from the 2025 CF.

To determine which conversion factor will apply to your practice, confirm whether you’re participating in a qualified alternative payment model.

“Qualifying providers are those that meet certain thresholds for participation in an advanced APM, which means generally that the payment model has features to ensure accountability for quality and cost of care,” CMS said in a statement.

Example: Suppose you perform a level five, new patient, office-based evaluation and management (E/M) service, and you submit a claim for 99205, which has 6.67 total RVUs. If you participate in a qualified APM, you’ll collect about $223.90 for this service. If you don’t participate in a qualified APM, you’ll bring in approximately $222.78 for it.

Negative Efficiency Adjustment to Impact More Than 7,000 Services

In 2026, CMS will institute a -2.5% efficiency adjustment, affecting codes for all services other than:

  • time-based codes

  • E/M services

  • behavioral health

  • services included on the telehealth list

  • maternity services with an MMM global period

  • care management services

“These changes address concerns about distorted payment values that have existed for years,” CMS said in a statement. “The Medicare Payment Advisory Commission, the Government Accountability Office, and researchers across the political spectrum have called out long-standing overvaluation of certain procedures and undervaluation of time-intensive services like primary care.”

Addressing these inconsistencies will help mitigate disparities in payment between primary care providers and specialists, CMS notes. Primary care is among the specialties least affected by this change, but it’s a good idea to review the entire list of codes that will be affected by the -2.5% adjustment once CMS releases it.

Direct Supervision Allowed via Telehealth

CMS’ final rule includes several provisions related to telehealth that may streamline your ability to meet Medicare guidelines. They include:

  • eliminating prior frequency limits for subsequent hospital and skilled nursing facility visits that occur via telehealth

  • allowing providers to perform virtual direct supervision using real-time audio-video communication systems for most services

  • simplifying the process for adding services to the permanent telehealth list, by removing the step requiring a code to first have “provisional” status

Keep in mind that the final rule does not eliminate the fact that the telehealth flexibilities still require Congressional extensions. When the existing telehealth flexibilities expired on September 30, 2025, many payers held claims during the government shutdown, awaiting word on whether the flexibilities would be extended. As part of the continuing resolution that ended the government shutdown on November 12, telehealth flexibilities were extended through January 30, 2026.

Behavioral Health Updates May Help Primary Care

To better reimburse primary care providers who manage behavioral health conditions, CMS will be trialing three new add-on codes that can be reported alongside advanced primary care management (APCM) service codes G0556 to G0558. The new codes are:

  • G0568: Initial psychiatric collaborative care management

  • G0569: Subsequent psychiatric collaborative care management

  • G0570: Care management services for behavioral health conditions

These codes cover a full calendar month of care, rather than being billed each time you see a patient.

In addition, CMS updated its practice expense (PE) determination methodology to better recognize the costs that physicians in office-based settings experience. “Specifically, we are finalizing to recognize greater indirect costs for practitioners in office-based settings compared to facility settings,” CMS said. This change aims to support providers who maintain independent practices rather than working in hospital- or health system-based clinics.

An additional win for primary care comes with an adjustment to the descriptor for G2211. To reflect a new update allowing this code to be reported for home and residence E/M visit, the new descriptor reads,

“Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. (Add-on code, list separately in addition to home or residence or office/outpatient evaluation and management service, new or established).”

CMS: More Time-Based Codes, More Pay

Ultimately, the medical practices that report the most time-based codes will see the biggest gains in the new year, CMS says. These specialties include:

  • family practice

  • clinical psychology

  • geriatrics

  • psychiatry

  • clinical social work

Providers who report more procedures, radiology services, imaging services, and surgeries are most at risk of seeing lower payments in the new year.

The 2026 Medicare Physician Fee Schedule Final Rule is available on the Federal Register’s public inspection website.