The Trump administration has proposed changes to Medicare’s physician payment rates that could boost doctor pay by as much as 3.8 percent in 2026 while aiming to crack down on wasteful spending and expand chronic disease prevention programs.
CMS estimates that physicians participating in advanced alternative payment models, known as Qualifying APM Participants, would see their conversion factor rise 3.83 percent to $33.59 from the current $32.35. For other clinicians, the conversion factor would increase 3.62 percent to $33.42.
The statutory portion of the increase is 2.5 percent, as mandated by federal law, while the remainder reflects adjustments for relative value units (RVUs) and other payment policy changes, CMS said.
“Thanks to Dr. Oz’s decisive leadership, this rule modernizes CMS payment systems, eliminates perverse incentives, and harnesses better data to improve care for patients with chronic disease while protecting the future of hometown doctors,” Health and Human Services Secretary Robert F. Kennedy Jr. said in a statement, referring to CMS Administrator Dr. Mehmet Oz.
Alongside payment updates, the proposed rule aims to curb ballooning costs in areas such as skin substitute products, which saw Medicare spending surge from $256 million in 2019 to more than $10 billion in 2024.
CMS plans to reclassify skin substitutes as routine medical supplies used in a doctor’s office visit (known as incident-to supplies) rather than as high-cost biological products—a change expected to cut spending on them by nearly 90 percent.
The proposal also advances efforts to shift the Medicare system toward preventive care and wellness. CMS wants to remove 10 quality measures it says have minimal impact on health outcomes and add five new measures focused on chronic disease prevention, including diabetes screening.
The agency is also proposing changes to the Medicare Diabetes Prevention Program, making services like coaching and behavioral support more widely available to people with prediabetes at no cost to beneficiaries.
In addition, CMS is seeking input through a request for information on ways to further integrate nutrition counseling and physical activity into Medicare’s chronic disease management efforts.
“We’re making it easier for seniors to access preventive services, incentivizing health care providers to deliver real results, and cracking down on abuse that drives up costs,“ Dr. Oz said in a statement. ”This is how we protect Medicare for the next generation while helping Americans live longer, healthier lives.”
A separate proposal within the rule would launch a mandatory new payment model called the Ambulatory Specialty Model (ASM) in 2027. The model would hold specialists accountable for quality and costs in treating conditions like heart failure and low back pain—two major drivers of Medicare spending.
Under the ASM, specialists would be rewarded for preventing hospitalizations, enhancing patient function, and adopting technology to coordinate care with primary providers.
CMS said it is also working to improve payment accuracy by updating how it calculates rates for certain services, relying more on hospital data and empirical evidence rather than surveys.
“This move reflects our continued shift toward smarter, data-informed policymaking,” Chris Klomp, deputy administrator and director of the Center for Medicare at CMS, said in a statement. “We’re advancing technical improvements that reward high-quality, efficient care.”
