Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program

<RULE> DEPARTMENT OF HEALTH AND HUMAN SERVICES <SUBAGY>Centers for Medicare & Medicaid Services</SUBAGY> <CFR>42 CFR Parts 405, 410, 414, 424, 425, 427, 428, 495, and 512</CFR> <DEPDOC>[CMS-1832-F]</DEPDOC> <RIN>RIN 0938-AV50</RIN> <SUBJECT>Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS). <HD SOURCE="HED">ACTION:</HD> Final rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This major final rule addresses: changes to the physician fee schedule (PFS); other changes to Medicare Part B payment policies to ensure that payment systems are updated to reflect changes in medical practice, relative value of services, and changes in the statute; codification of establishment of new policies for: the Medicare Prescription Drug Inflation Rebate Program under the Inflation Reduction Act of 2022; the Ambulatory Specialty Model; updates to the Medicare Diabetes Prevention Program expanded model; updates to drugs and biological products paid under Part B; Medicare Shared Savings Program requirements; updates to the Quality Payment Program; updates to policies for Rural Health Clinics and Federally Qualified Health Centers; update to the Ambulance Fee Schedule regulations; codification of the Inflation Reduction Act and Consolidated Appropriations Act, 2023 provisions; updates to the Medicare Promoting Interoperability Program. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> These regulations are effective on January 1, 2026. </EFFDATE> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for any issues not identified below. Please indicate the specific issue in the subject line of the email. For all questions related to reporting a service on a claim, please contact your Medicare Administrative Contractor. Michael Soracoe, Morgan Kitzmiller, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to practice expense, work RVUs, conversion factor, and PFS specialty-specific impacts. Hannah Ahn, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to potentially misvalued services under the PFS. Julie Rauch, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to Malpractice RVUs. Morgan Kitzmiller, Terry Simananda, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to Geographic Practice Cost Indices. Mikayla Murphy, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to direct supervision using two-way audio/video communication technology, telehealth, and other services involving communications technology. Erick Carrera, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to office/outpatient evaluation and management visit inherent complexity add-on and Digital Mental Health Treatment services. Maya Peterson, Terry Simananda, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to payment for advanced primary care management services. Sarah Leipnik, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to global surgery payment accuracy. Pamela West, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to outpatient therapy services and KX modifier thresholds. Michelle Cruse, Erick Carrera, Zehra Hussain, or Hannah Ahn <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to dental services inextricably linked to other covered medical services. Zehra Hussain, or <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to payment of skin substitutes. Laura Kennedy, (410) 786-3377, Rebecca Ray, (667) 414-0879, and Jae Ryu, (667) 414-0765 for issues related to Drugs and Biological Products Paid Under Medicare Part B. <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov,</E> for issues related to complex drug administration. Allison Cipro, (667) 414-0758, for issues related to Medicare Diabetes Prevention Program. Sabrina Ahmed, (410) 786-7499, or <E T="03">SharedSavingsProgram@cms.hhs.gov,</E> for issues related to the Medicare Shared Savings Program (Shared Savings Program) quality performance standard and other quality reporting requirements. Janae James, (410) 786-0801, or <E T="03">SharedSavingsProgram@cms.hhs.gov,</E> for issues related to Shared Savings Program beneficiary assignment and benchmarking methodology and shared losses mitigation. Kari Vandegrift, (410) 786-4008, or <E T="03">SharedSavingsProgram@cms.hhs.gov,</E> for issues related to Shared Savings Program participation options, and ACO participant and SNF affiliate change of ownership requirements. Elisabeth Daniel, (667) 290-8793, for issues related to the Medicare Prescription Drug Inflation Rebate Program. Benjamin Picillo or Genevieve Kehoe, <E T="03">AmbulatorySpecialtyModel@cms.hhs.gov,</E> or 1-844-711-2664 (Option 4) for issues related to the Ambulatory Specialty Model. Amy Gruber, (410) 786-1542, for issues related to Ambulance Extender provisions. Kati Moore, (410) 786-5471, for inquiries related to the Merit-based Incentive Payment System (MIPS) track of the Quality Payment Program (QPP). Trevey Davis, (410) 786-6600, for inquiries related to the Advanced Alternative Payment Models (APMs) track of QPP. Jessica Warren, (410) 786-7519, and Lisa Marie Gomez, (410) 786-1175, for inquiries related to the Medicare Promoting Interoperability Program. Lisa Parker, (410) 786-4949, or <E T="03">FQHC-PPS@cms.hhs.gov,</E> for issues related to FQHC payments. Michele Franklin, (410) 786-9226, or <E T="03">RHC@cms.hhs.gov,</E> for issues related to RHC payments. </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <E T="03">Addenda Available Only Through the Internet on the CMS Website:</E> The PFS Addenda along with other supporting documents and tables referenced in this final rule are available on the CMS website at <E T="03">https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/PhysicianFeeSched/index.html</E> . Click on the link on the left side of the screen titled, “PFS Federal Regulations Notices” for a chronological list of PFS <E T="04">Federal Register</E> and other related documents. For the CY 2026 PFS final rule, refer to item CMS-1832-F. Readers with questions related to accessing any of the Addenda or other supporting documents referenced in this final rule and posted on the CMS website identified above should contact <E T="03">MedicarePhysicianFeeSchedule@cms.hhs.gov</E> . <E T="03">CPT (Current Procedural Terminology) Copyright Notice:</E> Throughout this final rule, we use CPT codes and descriptions to refer to a variety of services. We note that CPT codes and descriptions are copyright 2020 American Medical Association. All Rights Reserved. CPT is a registered trademark of the American Medical Association (AMA). Applicable Federal Acquisition Regulations (FAR) and Defense Federal Acquisition Regulations (DFAR) apply. <HD SOURCE="HD1">I. Executive Summary</HD> <HD SOURCE="HD2">A. Purpose</HD> This major annual rule revises payment policies under the Medicare PFS and makes other policy changes, including policies to implement certain provisions of the Full-Year Continuing Appropriations and Extensions Act, 2025 (Pub. L. 119-4, March 15, 2025), Further Continuing Appropriations and Other Extensions Act of 2024 (Pub. L. 118-22, November 16, 2023), Consolidated Appropriations Act, 2023 (Pub. L. 117-328, September 29, 2022), Inflation Reduction Act of 2022 (IRA) (Pub. L. 117-169, August 16, 2022), Consolidated Appropriations Act, 2022 (Pub. L. 117-103, March 15, 2022), Consolidated Appropriations Act, 2021 (CAA, 2021) (Pub. L. 116-260, December 27, 2020), Bipartisan Budget Act of 2018 (BBA of 2018) (Pub. L. 115-123, February 9, 2018) and the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act (SUPPORT Act) (Pub. L. 115-271, October 24, 2018), related to Medicare Part B payment. In addition, this final rule includes provisions regarding other Medicare payment provisions described in sections III. and IV. of this final rule. This final rule updates policies for the Medicare Prescription Drug Inflation Rebate Program codified or finalized at parts 427 and 428 consistent with sections 1847A(i) and 1860D-14B of the Social Security Act (the Act). For the Medicare Part B Drug Inflation Rebate Program, this rule describes the identification of payment amount benchmark quarter in certain instances and the calculation for the Part B rebate amount in such instances. For the Medicare Part D Drug Inflation Rebate Program, this rule finalizes a methodology for removal of units for a Part D rebatable drug for which a manufacturer provides a discount under the 340B Program for the applicable period beginning October 1, 2025, as well as the establishment of a voluntary 340B data repository for Part D claims for testing purposes. This final rule modifies policies for the Shared Savings Program, which is a voluntary program that started in 2012. The program allows healthcare providers to form or participate in Accountable Care Organizations (ACOs), to be held accountable for the quality and total cost of care for an assigned population of Medicare fee-for-service (FFS) beneficiaries. <HD SOURCE="HD2">B. Summary of the Key Provisions</HD> Section 1848 of the Act requires us to establish payments under th ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 4706k characters. 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