Medicare Fee Schedule 2026: Key Changes Every Billing Team Needs to Know

The 2026 Medicare conversion factor is $33.4009. This is the multiplier applied to every code's total adjusted RVUs to produce the Medicare allowable payment. Every CPT and HCPCS code in the fee schedule is affected by a conversion factor change — it functions as a universal payment lever that moves all payments up or down together, before any code-specific RVU changes are applied.

To put the conversion factor in practical context: a CPT code with 3.0 total RVUs and no geographic adjustment generates a Medicare payment of $33.4009 × 3.0 = $100.20 at the national unadjusted rate. If the conversion factor changes by even $0.50, every code in the schedule shifts by that same proportional amount. For a practice billing $2 million in Medicare charges annually, a $0.50 shift in the conversion factor represents roughly $30,000 in annual payment variation depending on your payer mix and average RVU per claim.

The conversion factor is set through a complex political and regulatory process. CMS proposes a rate in the summer Physician Fee Schedule proposed rule; Congress frequently intervenes before the final rule takes effect in January to prevent large cuts that would otherwise result from the budget neutrality calculation. For 2026, the finalized rate of $33.4009 reflects both CMS's technical calculation and any Congressional adjustments applied before the final rule was published.

Billing teams should note the conversion factor change as soon as the final rule is released in November — not when it takes effect in January. Claims with January 1 or later dates of service will pay at the new rate. If your practice has a large volume of claims that straddle the year-end, confirm that your billing system is applying the correct conversion factor to each claim based on its date of service.

Every year, some CPT codes get higher RVU values and some get lower ones. The reason is budget neutrality — a statutory requirement that changes to the fee schedule that would increase total Medicare physician spending by more than a threshold amount must be offset by corresponding reductions elsewhere. The practical effect is that the fee schedule is essentially a closed system: money added to some codes must come from somewhere.

The mechanism works like this. The AMA's Relative Value Scale Update Committee (RUC) reviews and recommends new RVU values for codes that specialty societies identify as misvalued — either undervalued relative to their work, or overvalued. CMS reviews these recommendations and finalizes the values. When the sum of all proposed RVU increases would raise total projected Medicare physician spending beyond the budget neutrality threshold (0.5% of total projected expenditures), CMS applies a budget neutrality adjuster — a scalar reduction to the conversion factor or to the work RVU component that brings total projected spending back within bounds.

For billing teams, the practical implication is that fee schedule "winners" in any given year can generate "losers" in other specialties or code categories. A specialty that successfully advocates for significant RVU increases on its high-volume codes contributes to a budget neutrality offset that slightly reduces payments for everyone else. This zero-sum dynamic means you can't evaluate your specialty's fee schedule situation in isolation — changes in other specialties ripple through the conversion factor and affect you indirectly.

The right approach each November: focus first on the codes your practice bills in volume. Check whether your top 20 codes gained or lost RVU value, and whether the conversion factor change amplifies or dampens that effect. A code whose work RVU increased 5% but whose total payment only increased 2% because the conversion factor decreased tells a different revenue story than looking at either factor alone.

Each year's fee schedule final rule includes a summary of significant RVU changes by specialty. The changes that matter most to any given practice depend entirely on which codes that practice bills frequently — a cardiology practice is unaffected by changes to physical therapy codes and vice versa. What follows are the categories where billing teams most commonly encounter meaningful payment changes.

Evaluation and management codes: The 2021 E&M overhaul established new, higher RVU values for office and outpatient E&M codes. Subsequent years have seen incremental adjustments as CMS fine-tunes the relativity of these codes against procedural services. For primary care and outpatient medicine specialties, E&M codes are the highest-volume codes in the schedule, so even small RVU movements at the individual code level aggregate to significant revenue impact across a year's billing volume.

Surgical procedures under Five-Year Review: CMS periodically conducts comprehensive Five-Year Reviews of specific procedure families. Codes that go through a Five-Year Review in any given year may see significant RVU changes — either upward because the specialty society demonstrated the current value underestimates the work involved, or downward because CMS determined the code was overvalued. Specialty societies typically alert members to upcoming Five-Year Review cycles well in advance, which gives practices time to model the financial impact before the changes take effect.

Add-on codes and new technology codes: New CPT codes — particularly Category III codes that have matured to Category I status — frequently enter the fee schedule with RVU values that differ from what practitioners expected. New and revised codes should be verified against the fee schedule before they appear on claims, since preliminary valuations from the time a code was proposed may differ from the final published values.

The 2021 E&M revision was the most significant change to physician payment in decades. The AMA completely restructured how office and outpatient E&M codes are valued and how levels are selected. RVU values for the middle levels (99213 and 99214) increased significantly; the lowest level (99202/99212) was eliminated and the remaining codes were revalued to reflect the new documentation requirements.

In the years since 2021, CMS has made refinements to E&M code valuation based on utilization data and ongoing relativity reviews. The distribution of E&M level selection shifted upward after the 2021 changes — more claims coded at 99214 and 99215, fewer at 99212 and 99213 — which triggered budget neutrality adjustments in subsequent years. When the utilization of higher-paying codes increases, CMS's projected spending goes up, and the budget neutrality mechanism generates offsetting reductions.

For 2026, billing teams should verify the current RVU values for their most frequently billed E&M codes and compare them against what their billing system is using. If your billing software's fee schedule reference hasn't been updated for 2026, it may be applying prior-year RVU values, which can cause discrepancies between expected and actual payments. This is a straightforward check: pull the 2026 Medicare fee schedule values for 99213, 99214, and 99215 from a current source and compare against what your system shows.

It's also worth reviewing how the 2021 changes have settled into your practice's E&M coding patterns over the past few years. If your average E&M level hasn't moved since 2021, despite the documentation requirements becoming more supportive of higher levels, your practice may be leaving legitimate revenue on the table through conservative level selection.

Telehealth has been a moving target in Medicare policy since the COVID-19 pandemic dramatically expanded coverage on a temporary basis. The evolution has been gradual — Congress and CMS have extended many pandemic-era flexibilities multiple times while working toward a more permanent telehealth framework, and each year's fee schedule final rule contains updated telehealth provisions.

For 2026, billing teams should confirm the current status of three key telehealth policy areas: which CPT codes remain covered for telehealth delivery, what the originating site requirements are for their patient population, and whether audio-only telehealth coverage continues for patients who cannot access video technology.

The place of service codes for telehealth billing have been a source of confusion since the pandemic flexibility allowed patients to receive telehealth from their homes. The correct place of service for telehealth services provided to a patient in their home is POS 10 (telehealth provided in patient's home). POS 02 (telehealth provided other than in patient's home) applies when the patient is at a non-home originating site. Getting the POS code right matters because it affects both the rate applied (some telehealth services pay at the facility rate) and the statistical tracking CMS uses to evaluate telehealth utilization.

For practices with significant telehealth volume, a quarterly review of the applicable HCPCS G-codes and modifiers associated with telehealth billing is worth building into the compliance calendar. Telehealth policy changes more frequently than most other areas of the fee schedule, and a billing practice that was correct last year may be incorrect this year if a temporary flexibility expired or a new requirement was added.

Each year the AMA adds new CPT codes, deletes obsolete ones, and revises the descriptors of existing codes. For 2026, the fee schedule incorporates these changes with RVU assignments for new codes and the removal of deleted codes from the payable schedule. The window between when the AMA publishes the new codebook (typically in September for the following January) and when the codes take effect is the time to update charge masters, billing software, and coding reference materials.

New Category I codes represent established procedures that have achieved widespread adoption and sufficient evidence base to graduate from Category III (emerging technology) status. When a code makes this transition, its RVU value changes — Category III codes are often valued at a lower rate than the Category I code that replaces them, or the Category I code may carry a higher value that better reflects the mature procedure. Any code your practice bills that was previously Category III and has moved to Category I needs to be updated in your charge capture system with the new code number and the correct 2026 RVU value.

Deleted codes require particular attention. When a CPT code is deleted, claims submitted with that code after its deletion date will deny. If your billing software allows charges to be built on deleted codes without a warning, you can generate a wave of denials before anyone notices the code is gone. A pre-year-end audit of your charge description master against the list of deleted codes — available from the AMA and from CMS's fee schedule files — is the right preventive step. Most practice management systems have a code validity check feature; confirm it's enabled and updated for 2026.

The global surgery payment system — which bundles pre-operative, intraoperative, and post-operative care into a single payment for surgical procedures — hasn't undergone structural changes in the 2026 fee schedule. The 0-day, 10-day, and 90-day global periods for existing codes remain the same. But that stability doesn't mean billing teams can set it and forget it.

Global surgery compliance remains one of the most consistently cited areas in MAC audits and OIG work plans. The most common finding: providers billing separately for services that are included in the surgical global package. Post-operative office visits during a 90-day global period are included in the surgical payment; billing them separately as E&M services without the appropriate modifier generates overpayment. CMS periodically reviews claims for procedures with 90-day global periods to identify patterns of separate E&M billing that doesn't carry modifier 24 (unrelated E&M in global period).

For 2026, the practical review is this: if your practice performs surgeries with 90-day global periods, confirm that your billing team knows which post-operative visits are included in the package and which ones require modifier 24 for separate billing. The trigger for modifier 24 is that the E&M is for a problem unrelated to the reason for surgery — not just that it occurred during the global period. A follow-up visit for the surgical site is included; a visit for a new, unrelated complaint is separately billable with modifier 24.

Also review whether your practice correctly bills the transfer of care modifiers (54, 55, 56) when a surgeon who doesn't provide post-operative care transfers that responsibility. These modifiers split the global package payment between the performing surgeon and the provider who assumes post-operative care, and they're frequently omitted in practices with fragmented surgical care models.

The charge description master (CDM) is the foundation of your billing operation — every charge your practice generates flows through it. An outdated CDM generates incorrect payments, denials for deleted codes, and missed revenue from new codes or higher-valued existing codes. The annual fee schedule update is the most predictable and impactful CDM maintenance event of the year.

A systematic CDM update process for 2026 involves four steps. First, identify deleted codes: cross-reference your active CDM codes against the AMA's deleted code list and remove any codes that are no longer valid after January 1. Second, add new codes: for any new Category I codes that fall within your specialty's scope of practice, add the code with the correct 2026 RVU value and an appropriate charge amount. Third, update RVU values for existing codes: for codes that had RVU changes in 2026, update the expected payment amount in your system. Fourth, review your charge amounts relative to the new Medicare rates: if your charge amount for a code is below the new Medicare allowable, you're effectively capping your reimbursement from any payer that pays less than charges.

The timing of this update matters. CDM changes should take effect for dates of service on or after January 1. Claims for December dates of service should still use 2025 values. Most billing systems support date-effective fee schedule updates that automatically apply the right values based on the claim's date of service — but this requires the update to be loaded before the first January claims are generated, not after. A CDM update completed in mid-January will leave several weeks of January claims processed at the wrong rates.

DenialStop's Medicare Fee Schedule Lookup gives you instant access to 2026 RVU values and payment rates for any CPT or HCPCS code without downloading or maintaining the full CMS PPRRVU data file. Enter a code, and the result shows work RVU, practice expense RVU (facility and non-facility), malpractice RVU, total RVUs, national unadjusted payment amounts for both facility and non-facility settings, global surgery period, PC/TC indicator, and billing indicators including multiple procedure, bilateral, and assistant surgeon.

Several specific use cases where the tool is most useful for billing teams working through the 2026 update:

• Verifying a code's 2026 payment before the first claim is submitted. For any new code added to your charge master, or any code where you're aware of an RVU change, pull the current value from the lookup before the charge is built.
• Contract analysis. If your commercial contracts are expressed as a percentage of Medicare, the 2026 Medicare rate is your baseline for calculating what each contract should pay. The lookup gives you the non-facility rate (for office-based services) or facility rate (for hospital and ASC-based services) that feeds into that calculation.
• Checking global surgery periods. If a procedure's global period is relevant to how you're billing associated E&M services, the fee schedule lookup displays the global indicator (000, 010, 090, XXX, ZZZ, MMM) for every code.
• Answering provider questions about payment. When a physician asks why a procedure pays what it does, the tool lets you walk through the RVU components and show exactly how the payment is calculated — which is a more satisfying and educational answer than "that's just what Medicare pays."

The data in DenialStop's fee schedule tool reflects the 2026 Q3 PPRRVU release — the most current quarterly update from CMS. Payment rates are the national unadjusted amounts; actual payment in your locality will differ based on GPCI values. For locality-specific payment calculations, apply your area's GPCI values to the component RVUs before multiplying by the conversion factor.