2026 Physician Fee Schedule Final Rule

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If you've read the headlines about the 2026 CMS Physician Fee Schedule (PFS) Final Rule, you might be confused.

You probably saw a small, positive update to the conversion factor and thought, "Well, at least it's not a cut."

We are here to tell you: Don't be fooled by the smokescreen.

Buried deep in the 2,000-page rule are two seismic policy changes that, for many specialists, will wipe out any gains and create a deep, new financial crisis. At Sirius Solutions Global, we've analyzed the rule, and what we've found is a clear "one-two punch" aimed directly at the revenue of proceduralists and hospital-based practices.

This is not just another small tweak. This is a fundamental change in who CMS wants to pay and where it wants to pay them.

Here’s what you need to know right now.

This is the jab. It’s a direct, across-the-board cut to the value of your work.

• What it is: CMS has finalized a -2.5% "efficiency adjustment" to the work RVUs (wRVUs) of nearly all non-time-based services.

• What it really means (in plain English): CMS is officially saying that for any service not billed based on time (think surgical procedures, radiology interpretations, diagnostic tests), they believe physicians have gotten 2.5% more "efficient" over the last five years. And now, they are cutting your pay to match.

• Who gets hit the hardest? This is a direct shot at specialists. If your revenue relies on procedures, you are targeted. This includes:

  • Orthopedic Surgery

  • Radiology

  • Interventional Cardiology

  • General Surgery

  • Dermatology

• Who is spared? Primary care and cognitive specialists. This cut does not apply to time-based Evaluation and Management (E/M) codes, behavioral health services, or care management.

This efficiency cut is particularly painful because it directly impacts physician compensation models tied to wRVUs. Even if your surgeons perform the exact same amount of work, their measured productivity and potentially their paycheck is set to drop by 2.5%.

This is the uppercut. It’s a structural change designed to fundamentally reshape where you practice medicine.

• What it is: CMS is slashing the Practice Expense (PE) RVU allocation for services performed in a facility setting (like a hospital outpatient department or ASC). Simultaneously, they are increasing the PE allocation for services performed in a non-facility setting (your independent office).

• The Shocking Numbers: The finalized methodology shift results in an estimated:

  • ~7% DECREASE in total reimbursement for services performed in a facility.

  • ~4% INCREASE in total reimbursement for services performed in an office.

• What it really means: CMS is sending its loudest message in years: They are done paying high hospital overhead costs for procedures they believe can be done safely in a physician's office. They are actively creating a massive, 11-point payment swing to force this change.

This creates an immediate, existential crisis for two types of practices:

1. Hospital-Employed Physicians: Your services are now ~7% less valuable to your health system. This puts enormous pressure on your department's bottom line and will trigger difficult conversations about compensation, resources, and productivity expectations.

2. Independent Groups Practicing in Hospitals: The financial case for performing procedures in the hospital just got significantly worse. The viability of your practice may now depend on your ability to shift cases to a non-facility setting.

The Combined Impact: A Specialty-by-Specialty Forecast

Neither of these punches lands in isolation. They land together.

A procedural specialist who practices in a hospital (like an interventional cardiologist or hospital-based radiologist) is getting hit twice: once by the -2.5% efficiency cut on their work, and again by the -7% PE cut on their practice expense.

Here is a quick look at the combined financial forecast for key specialties:

Reading this rule can feel overwhelming, but panic is not a strategy. As your RCM and strategy partner, Sirius Solutions Global recommends focusing on these three immediate actions.

You cannot manage what you don't measure. Do not wait for the first remits to come in. You must model the impact of these two changes on your top 50 most-billed CPT codes. You need to know your exact financial exposure. How much revenue are you set to lose? Which procedures and physicians are most affected?

This is no longer a "nice to have" discussion; it's a survival discussion. Assemble your clinical and administrative leaders and ask a simple question for every procedure: Can this be done safely and compliantly in the office? That ~11% payment differential is the strongest business case CMS has ever made for building out your own procedure rooms or ASC.

If your physicians are paid on wRVUs, you have a problem. On January 1, 2026, their productivity will automatically drop by 2.5% on all procedural codes. You must get ahead of this. You need to review contracts now and decide:

• Do you adjust the compensation rate per wRVU to hold physicians harmless?

• Do you move to a different metric, like collections or a quality-based bonus?

• Do you use this as a catalyst to renegotiate contracts based on the new financial reality?

The 2026 CMS Final Rule is confusing, frustrating, and deeply costly. It's designed to squeeze practices like yours.

But you don't have to face it alone.

While other practices are just learning what these cuts mean, our clients are already modeling the impact and building the strategy to fight back. Don't let CMS policy dictate the future of your practice.

Contact Sirius Solutions Global today for a complimentary 2026 Reimbursement Impact Analysis. Let's pinpoint your exact financial risk and build the strategic plan you need to thrive in 2026.

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