CY 2026 Medicare Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) has released the Calendar Year (CY) 2026 final rule for the Medicare Physician Fee Schedule (MPFS) and supporting fact sheet. Policies outlined in the rule will take effect January 1, 2026. The following AAO-HNS overview provides details regarding the rule’s key provisions impacting the field of otolaryngology. 

For questions regarding provisions impacting otolaryngology-head and neck surgery, contact the AAO-HNS Health Policy Advocacy team: [email protected].  

Payment Updates 

• Dual Medicare Conversion Factors: Beginning January 1, 2026, CMS will implement two separate Medicare conversion factors. This change means that payment updates will differ depending on whether a physician is a qualifying provider (QP) in an Advanced Alternative Payment Model (APM). Most otolaryngologist–head and neck surgeons will fall under the non-QP category. The new conversion factors will be $33.57 for QPs and $33.40 for non-QPs. 

 The value of both conversion factors include: 

• A statutory update of +0.75% for QPs and +0.25% for non-QPs 

• A temporary +2.5% update finalized under the One Big Beautiful Bill Act (H.R. 1) 

• A +0.49% update to account for new policy changes outlined below

• Estimated Impact to Otolaryngology: Based on the payment update outlined above and the additional policies outlined below, CMS estimates that the total impact to otolaryngology will be 0%. 

• Efficiency Adjustment: CMS finalized a new “efficiency adjustment” that will reduce work RVUs and intraservice time by 2.5% for nearly all non-time-based codes beginning in CY 2026. This policy is based on CMS’s assumption that physicians uniformly become more efficient at delivering care over time. The Academy strongly opposes this notion and is actively collaborating with other medical specialties in urging Congress to prevent the implementation of this policy. For most otolaryngology–head and neck surgery services, the financial impact is thought to be an approximate 0.5-1.5% reduction in total RVUs per code. Because the efficiency adjustment will broadly decrease RVUs, CMS is providing a 0.49% update to the Medicare conversion factor, as noted above. 

• Indirect Practice Expense (PE) Adjustments: To account for the continued shift in physician employment from independent practice to hospital or health system settings, CMS will reduce indirect PE RVUs for services performed in hospital settings, asserting that many of these administrative costs are borne by facilities. Beginning January 1, 2026, the portion of indirect PE RVUs tied to work RVUs for facility-based services will be reduced by 50%. CMS estimates that this policy will impact total allowed charges for otolaryngology services by -12% in facility settings and +3% in non-facility settings; however, the overall impact of this policy will vary widely among otolaryngology practices and subspecialties, depending on factors such as service mix, patient volume, and practice structure.  

Telehealth 

• Medicare Telehealth Services List: CMS is streamlining the process for adding services to the Medicare Telehealth Services List by eliminating the distinction between “provisional” and “permanent” services and removing steps for determining whether a service can be furnished using an interactive, two-way audio-video telecommunications system. The elimination of services’ “provisional” status added two new codes for auditory osseointegrated sound processors to the list for 2026: HCPCS code 92622 and HCPCS code 92623. 

• Updates to Direct Supervision: CMS has permanently adopted a definition of direct supervision that will allow physicians or supervising practitioners to provide such supervision through real-time audio and visual interactive telecommunications (excluding audio-only). 

Code-Specific Updates of Interest to ENTs 

• Tympanostomy (CPT 0583T): CMS finalized a crosswalk of CPT code 0583T (tympanostomy using an automated tube delivery system with iontophoresis local anesthesia) to CPT code 31295 for physician work, time, and direct practice expense inputs, agreeing that the resource use and intensity of CPT Code 0583T are comparable to CPT Code 31295. As a result, CPT Code 0583T will receive an assigned national payment rate beginning in CY 2026. CMS also maintained contractor pricing for G0561.

• Fine Needle Aspiration (CPT Codes 10021, 10004, 10005, 10006): CMS declined to designate the fine needle aspiration code family as potentially misvalued, consistent with the RUC’s recommendations. 

• Nasal Sinus Irrigation (CPT Codes 31000 and 31002): CMS declined to designate these codes as potentially misvalued. 

• Hearing Device Services (CPT Codes 92628, 92629, 92631, 92632, 92634, 92635, 92636, 92637, 92638, 92639, 92641, and 92642): CMS maintained that the agency does not have the authority to establish Medicare payment for hearing aids and related exams under current law, so these codes will remain non-payable for CY 2026.