CMS Finalizes Significant Boost for Independent Primary Care in the 2026 Medicare Physician Fee Schedule

CMS has delivered some genuinely good news for primary care. On Halloween, the agency finalized sweeping changes to the 2026 Medicare Physician Fee Schedule (PFS), reforms explicitly intended to provide primary care teams with greater stability and resources to deliver the high-quality, whole-person care Americans need.

This rule isn't a panacea, but it represents a distinct and powerful pivot in reimbursement policy, structurally benefiting independent primary care practices and potentially unlocking meaningful new revenue.

The Double Benefit: Direct Financial Increases

For practices already participating in an Advanced Payment Model (APM) — such as an ACO or MIPS Alternative Payment Model — CMS has implemented two key changes that create an immediate, double-barreled financial boost.

1. Enhanced Conversion Factor (CF)

Practices in an APM will see a universal Conversion Factor (CF) increase of up to 3.77%. The CF is the crucial multiplier that turns Relative Value Units (RVUs) into dollar payment amounts for every Medicare service billed.

• The Conversion Factor rises from $32.35 (2025 Final Rate) to $33.57 (2026 Final Rate, QP).

2. Site-of-Service Differential

CMS is instituting a site-of-service differential that preferentially increases reimbursement for Practice Expense (PE) RVUs in the independent office setting by about 4%. This specifically redirects PE dollars away from the facility (hospital) setting and toward the independent setting, creating a clear structural advantage for private practices over hospital-employed groups.

Putting It Together: A $12.15 Increase Per Encounter

When these two policy changes are combined, the financial impact per patient encounter is significant.

Take the example of a 99215 office visit billed with the G2211 code for comprehensive, longitudinal care. Comparing the estimated 2025 and 2026 reimbursement shows a substantial increase:

This $12.15 increase translates to a 7.15% total increase per encounter. For a practice with just five such visits per day, 48 weeks per year, this could generate an extra $14,580 per year in new reimbursement.

Structural Reforms: Solving Policy Pitfalls

Beyond the direct payment increases, the new rule makes crucial structural changes that address major pitfalls of prior policy, unlocking revenue and streamlining operations:

Solved: The Budget Neutrality Problem

CMS has legally created two separate CF tracks (QP vs. Non-QP). By doing this, CMS can reward practices in value-based models with a higher statutory increase that is no longer subject to the same budget neutrality pressures as the universal CF. This creates a permanent, ongoing financial bonus for participating in an advanced APM.

Solved: The Hospital Advantage

The site-of-service differential directly addresses the imbalance in overhead coverage by redirecting Practice Expense dollars from the hospital to the independent office setting. This is a structural benefit that helps cover the overhead of running a private practice and improves the competitive standing of independent groups.

Solved: Operational Barrier to CCM/BHI Billing

CMS is introducing new add-on codes for Behavioral Health Integration (BHI) and Collaborative Care Model (CoCM) services that are not tied to time-based documentation. This is a game-changer. These are services many practices are already performing, but the meticulous time-based documentation requirement was a major operational barrier to successful billing. Removing this barrier makes it significantly easier to get paid for this essential work.

Other Key Changes You Need to Know

The PFS also included several other provisions that support high-quality care delivery:

• Telehealth Flexibilities Made Permanent: Many COVID-era flexibilities are now permanent, including allowing the direct supervision of "incident to" services (often provided by clinical staff) to be done virtually.

• MIPS Streamlining: Reporting burden for APM participants in MIPS will be reduced.

• G2211 Expansion: The add-on code for comprehensive, longitudinal care (G2211) will be expanded to include home-based Evaluation and Management (E/M) services.

The Takeaway

While the 2026 Medicare Physician Fee Schedule only affects the Medicare program, its payment priorities have an outsized impact on every other health care payer.

For independent primary care practices, this rule provides tangible financial support and removes operational complexity, directly linking higher reimbursement to participation in value-based care. It is a clear signal that CMS is investing in the stability and success of practices delivering comprehensive, longitudinal primary care.

Ready to capitalize on these new opportunities? Contact Elation for more information on how we support Value-Based Payment (VBP) and help practices thrive in the evolving primary care landscape.