Medicare proposed rule for 2026: CMS, what are you doing to us?

On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released the proposed rule for the Calendar Year 2026 Medicare Physician Fee Schedule (MPFS), which outlines proposed payment policies for the care of Medicare beneficiaries. Some significant changes are proposed, continuing the trend of shifting money away from surgical specialists and toward primary care providers.

Conversion Factor

For the first time in years, the conversion factor (CF) is set to increase. On a high level, this is a win for the body of medicine and something we have all been hoping for, and it has been a long time coming. In reality, it is a mixed bag, especially for surgical specialists, because despite this increase in the CF, the overall update to urology is estimated at 0% due to other factors described in this column.

The CF increase is due to a small statutory adjustment as a result of the Medicare Access and CHIP Reauthorization Act of 2015, a 2.5% boost from the 2025 One Big Beautiful Bill Act (OBBBA), and a 0.55% budget neutrality adjustment addressing changes in relative value units (RVUs). New for 2026 is that there will be 2 CFs: 1 for those who are part of a qualified alternative payment model (APM) and 1 for non-APM clinicians. APM participants will see a 0.75% update (in addition to the 2.5% and 0.55% listed above), so their CF overall will increase by $1.24 (3.8%) to $33.59. In contrast, non-APM participants will receive only a 0.25% update (with the 2.5% and 0.55% above), increasing by $1.07 (3.3%) to $33.42.

Telehealth

CMS has proposed a few changes to telehealth services for 2026 and beyond; however, Congress remains in charge of overall coverage for telehealth for Medicare patients. Neither the proposed rule nor the OBBBA addressed continuing coverage for telehealth for most Medicare patients receiving services in their homes. Currently, coverage for these much-used services is set to expire on September 30, 2025. We continue to watch Congress for what is expected to be a continuation of the current guidelines.

CMS did prepare for an extension or expiration of telehealth in the proposed rule. CMS proposed making permanent remote audiovisual supervision, discontinuing audiovisual supervision for teaching physicians, removing frequency limitations for telehealth hospital visits, and reducing the complexity and the requirements for adding services to the covered telehealth service list. CMS will continue to cover telehealth services for audiovisual and audio-only services under the existing evaluation/management (E/M) codes if Congress extends telehealth coverage.

CMS did extend coverage for telehealth services for rural health clinics and federally qualified health clinics for 1 year in case Congress fails to extend telehealth coverage for all Medicare patients. Remember that Medicare Advantage plans and commercial carriers can continue to allow telehealth services even if Medicare does not; however, we all know the influence Medicare has on the marketplace.

Finally, CMS has valued and marked as active new Current Procedural Terminology (CPT) codes for remote patient monitoring for 2026. We will provide more detail on these codes and their use in urology in future articles.

RVU Adjustments

Reduction in Reimbursement Due to Efficiency Adjustment

CMS has proposed a 2.5% reduction in intraservice time and therefore corresponding work RVUs (and payment) for procedures, radiology services, and diagnostic tests for what they describe as an “efficiency adjustment.” This means the agency believes that the efficiencies gained over time and experience are not accounted for. Therefore, these values need to be adjusted across the board. It is proposed that the adjustment be placed on almost all procedural services, excluding E/M and other time-based codes, among others. As part of this argument, the agency also raised concerns about the data used to determine service values in the first place, which primarily come from the American Medical Association RVS Update Committee (RUC) surveys. CMS believes these data may not accurately capture practitioners’ actual time, intensity, or resource usage due to what they think are issues with the RUC survey process. These include subjectivity in responses, low response rates, potential conflicts of interest among survey respondents, and delays in data updates, which may not reflect increasing efficiency over time in clinical practice.

CMS came to the 2.5% reduction based on a 5-year review of the cumulative productivity adjustment included in the Medicare Economic Index, which CMS believes provides a reasonable estimate of the efficiency gains across services within the MPFS. In addition to this adjustment, CMS proposes revising the efficiency adjustment every 3 years. The agency also aims to emphasize “empirical” evidence for the codes selected to minimize the limitations of relying on survey data.

Updates to the Practice Expense Methodology

Payment for a physician service under the MPFS is derived from a formula that includes the RVUs for physician work, practice expense (PE; direct and indirect costs), and malpractice costs. Indirect PEs include rent, electricity, wages for office staff, billing, and scheduling. CMS has assumed that physicians maintain an office-based practice while providing care in a facility setting and, therefore, incur some indirect costs while performing services there. With fewer physicians owning their practices, CMS believes it may be overpaying for the indirect costs to a practitioner when a service is performed in the facility/hospital setting. CMS therefore proposes to reduce the portion of the facility PE RVUs allocated based on work RVUs to half the amount allocated to nonfacility PE RVUs. This means that the indirect PE paid to providers will go down in the facility setting and up in the nonfacility setting.

Supply Pack Pricing Update

CMS had noted that under direct PE, the cost of certain supply packs used with procedures (eg, those containing drapes, gowns, and other equipment needed for the intended procedure) exceeded the combined cost of their components. Through the RUC evaluation process it was determined that reimbursements for several supply packs commonly used in urologic procedures needed to be adjusted.

As reported last year, the pack for cleaning and disinfecting an endoscope (SA042) was found to be undervalued, and reimbursement would ultimately increase from $19.43 to $31.29. However, the cystoscopy drape pack (SA045) was found to be overvalued and would ultimately decrease from $17.33 to $14.99, while cystoscopy visit packs (SA058) would decrease from $113.70 to $37.63. To mitigate the financial impact on practices, CMS settled on a 4-year phase-in approach to these changes. For 2026, SA058 reimbursement will drop from $94.68 to $75.67, whereas for SA042 it will rise to $25.36 from $22.40.

Urology groups may also feel the effect of the reduction for supply pack SA051 (pelvic exam supply pack), updated from $20.16 to $2.81. This will also be phased in over 4 years and is proposed to be $14.38 in 2026, $8.59 in 2027, and $2.81 in 2028. The hydrophilic guidewire (SD089) seems to be undervalued at $20.56 and appears to be going up to $27.42 in 2026, $34.29 in 2027, and $41.15 in 2028 for the final price (also phased in over 4 years).

New and Revised CPT Codes

Several new CPT Category I codes will be available starting January 1, 2026, and proposed values have been assigned. Among those codes are 9 new ones for prostate biopsy services (including MRI-fusion guidance), Aquablation, NanoKnife, and laparoscopic prostatectomy with lymph node dissection. We will discuss these codes further in future articles once CPT 2026 has been released and we can supply the final code numbers, descriptions, and CPT guidance.

The addition of these codes has affected a few existing code values.

RVU Impact

As noted above, the overall impact in urology of the changes in values and the CF is projected to be 0% in overall payments to the specialty. Medicare did provide a slightly more detailed projection of a greater than5% impact for office-based services and a less than 10% impact for nonfacility-based services (hospital outpatient department, ambulatory surgical center [ASC], and inpatient services). Although the impact on urologists overall is minimal, it will affect each urologist differently. You must analyze these impacts as you project your budgets and work RVU-based contracts based on these significant and widespread proposed changes.

Outpatient Prospective
Payment System

We do not have space to cover specific changes in the Outpatient Prospective Payment System in this article. The overall payment rate increased slightly. We have included ASC pricing changes from the proposed rule in the Table (see tinyurl.com/pnzdvsap) but will reserve comment on specific issues for a future article.

Conclusion

Urologists and urology groups should be aware of the key provisions outlined in the 2026 proposed rule. Although this summary does not cover all the proposed changes and updates, some changes and updates may not be included in the final rule. However, based on this proposal, some shifts may significantly impact the practice of urology. We encourage you to support the American Association of Clinical Urologists, American Urological Association, LUGPA, and your state organizations in providing organized comments on the proposed rule and its potential impact on the care you can provide to your patients. Comments to CMS about the proposal are due in early September 2025.

Neuspera update

In our August column regarding Neuspera Medical’s integrated sacral neuromodulation device,¹ we wrote that the FDA had recently cleared the Neuspera device. Since that article was written, Neuspera has received FDA premarket approval.

We were also aware that Medicare intended to use the same inclusion criteria for the Neuspera device as other sacral nerve modulating devices. Therefore, the indications would be the same as in Medicare Coverage Database (MCD) 230.18.² As with all sacral nerve–modulating devices, not only would the inclusion criteria need to be met, but a test stimulation (such as with using CPT 64561 [percutaneous implantation of neurostimulator electrode array, sacral nerve (transforaminal placement) including image guidance, if performed]) would be performed, and greater than 50% improvement would need to be shown by bladder diary. Thus, if one uses the Neuspera device, the Category III CPT codes would be used, as described in the article.

Per MCD 230.18, the following limitations for coverage apply:

“Patient must be refractory to conventional therapy (documented behavioral, pharmacologic, and/or surgical corrective therapy) and be an appropriate surgical candidate such that implantation with anesthesia can occur.

Patients with stress incontinence, urinary obstruction, and specific neurologic diseases (eg, diabetes with peripheral nerve involvement) which are associated with secondary manifestations of the above 3 indications are excluded.

Patient must have had a successful test stimulation in order to support subsequent implantation. Before a patient is eligible for permanent implantation, he/she must demonstrate a 50% or greater improvement through test stimulation. Improvement is measured through voiding diaries.

Patient must be able to demonstrate adequate ability to record voiding diary data such that clinical results of the implant procedure can be properly evaluated.”²

REFERENCES

1. Rubenstein J, Painter M. Codes to use when billing for Neuspera’s integrated SNM device. Urology Times. August 8, 2025. Accessed August 13, 2025. https://tinyurl.com/yjhajnrd

2. Sacral nerve stimulation for urinary incontinence. CMS. Accessed August 13, 2025. https://tinyurl.com/yu49rx77

Send coding and reimbursement questions to Jonathan Rubenstein, MD, and Mark Painter c/o Urology Times®, at UTeditors@mjhlifesciences.com.

The information in this column is designed to be authoritative, and every effort has been made to ensure its accuracy at the time it was written. However, readers are encouraged to check with their individual carrier or private payers for updates and to confirm that this information conforms to their specific rules.