CMS proposes 3.6+% pay increase for providers

Though Medicaid cuts in the Trump administration’s budget bill shocked hospitals, providers may start singing its praises after learning they’re due for a pay bump next year.

On Monday, the Centers for Medicare and Medicaid Services (CMS) shared its proposed 2026 physician fee schedule, which determines Medicare payments based on the amount of resources in provider services like office visits, hospice, diagnostic testing, ambulance care, and more.

The budget bill calls for a 2.5% raise, and this also accounts for a 0.55% adjustment in proposed changes to certain services, according to a CMS fact sheet. Last year, Medicare paid $32.35 per relative value unit for qualifying physician services; next year’s rate is set at $33.59. For nonqualifying services, it’ll grow from $32.35 to $33.42.

Put simply? Physicians will get a more than 3.6% increase to this year’s salaries.

This was just one element of Monday’s announcement, which also highlighted initiatives for improving care for things like chronic conditions, calculating more accurate payment rates, and establishing a new payment model for beneficiaries with heart failure and lower back pain (both of which see higher Medicare spend).

“We’re advancing technical improvements that reward high-quality, efficient care,” Chris Klomp, deputy administrator and director at CMS, said in a press release.

Adjustments can be made to the proposed rule until September before it goes into effect next year.