CMS Finalizes CY 2026 Physician Fee Schedule

Key Takeaways for Echocardiographers

Late on October 31, 2025, CMS released the CY2026 Medicare Physician Fee Schedule Final Rule. Provisions included in the rule will go into effect January 1, 2026. Early review suggests that diagnostic imaging services, including echocardiography, are likely to see reduced Medicare payments due to new efficiency standards and updated calculations for practice costs, even though the base payment rate is increasing slightly. Because the fee schedule operates under budget neutrality, which keeps total spending constant, payment increases in some areas must be offset by decreases in others, creating downward pressure on imaging reimbursement.

Payment Updates

• Conversion factors (CFs):
  • Qualifying APM Participants $33.57 (+3.77%)
  • Non-Qualifying APM Participants $33.40 (+3.26%).

These reflect the statutory baseline updates (+0.75% for QPs, +0.25% for non-QPs), the one-year +2.5% increase, budget-neutrality adjustments, and finalized RVU changes.

• Site-of-service impact: CFs apply universally, but payment still differs by setting (non-facility vs facility) due to distinct practice-expense RVUs and geographic practice cost indices (GPCIs).
• Sequestration note: The 2% sequestration (when in effect) is a post-adjudication payment reduction and does not change RVUs or the CF itself.

Efficiency Adjustment

• Scope and mechanism: CMS finalized a –2.5% efficiency adjustment that uniformly reduces work RVUs and the intraservice time assumptions for non-time-based services. This is intended to account for productivity gains over time and is derived from the MEI productivity factor (five-year lookback). The adjustment is code-level and will be reflected for all services professional components.
• Applies to echocardiography services: Because echo services are not time-based codes, the adjustment will apply to the diagnostic echo families, including typical TTE (e.g., 93303–93308), TEE (93312–93318), and stress echo (93350–93352), related add-ons where applicable as well as interventional echocardiography (93355).
• Who is not affected: Time-based codes are excluded, for example, E/M, care-management, many behavioral health services, telehealth E/M, and maternity global packages. These do not receive the –2.5% work/time reduction.

Practice Expense (PE) Methodology

• What CMS changed: CMS updated how indirect PE (overhead like admin staff, utilities, IT, rent) is allocated, more clearly separating non-facility (office) from facility (hospital/ASC) settings. The prior approach often treated indirect costs similarly across settings; the new weighting recognizes that hospitals bear more overhead for facility resources, while office-based practices shoulder more practice-level overhead.
• How it flows into RVUs: PE RVUs combine direct inputs (e.g., equipment, contrast, supplies, clinical staff time) and indirect allocation (overhead). By recalibrating the indirect allocation, CMS can raise non-facility PE RVUs and lower facility PE RVUs for the same CPT code. This will change payment by site of service even when direct inputs are unchanged.

What this Means for Echo

• Payment outlook: Non-facility echocardiography payments are expected to be generally stable, similar to cardiology overall. Facility-based services, however, may face additional pressure with the –2.5% efficiency adjustment pushing payments down and PE methodology changes amplifying site-of-service differences.

Practices should model service mix and sites of care, review documentation for complete PE inputs (e.g., contrast, supplies, staff), and prepare operational plans to mitigate revenue effects.

ASE Advocacy Activity

• Register Now: Join us for an educational webinar examining the final CY 2026 Medicare Physician Fee Schedule Rule, which establishes new payment rates and policy changes for Medicare Part B services. This session will analyze the key provisions of the final rule and their direct impact on echocardiography reimbursement, including updated conversion factors and payment policies affecting cardiac imaging procedures. Attendees will learn how these changes influence practice operations, payment for CV procedures, and strategies for adapting to the new payment structure.
  • Register Now

• ASE Urges Congressional Action on CMS Efficiency Adjustment: On November 3, 2025, 34 medical organizations including ASE through the Alliance of Specialty Medicine, sent a letter to congressional leaders urging swift action to stop a portion of the CMS rule finalized on October 31st that reduces work RVUs and intra-service time for all non-time-based codes by 2.5% in 2026, with additional reductions every 3 years indefinitely. The letter argues this “efficiency adjustment” is based on a flawed assumption that services become more efficient over time, contradicting a peer-reviewed study showing 90% of CPT codes had the same or longer operative times in 2023 compared to 2019. The organizations warn that recurring RVU reductions will significantly impact physician compensation, create financial uncertainty, potentially limit patient access to care, and may drive further healthcare consolidation, urging Congress to use all legislative tools to stop implementation before January 1, 2026.
  • Read the letter

• Comments on the Proposed Rule: ASE commented on the proposed rule both as a Society and with the Alliance of Specialty Medicine. ASE focused comments on the conversion factor updates, the proposed –2.5% efficiency adjustment for non-time-based services, revisions to the practice expense methodology for facility-based services, changes to the G2211 code, telehealth expansion, and provided thoughts on Software as a Service questions.
  • ASE’s Comments
  • Alliance of Specialty Medicine’s Comments

Additional Resources

• CY2026 Medicare Physician Fee Schedule Rate Comparison for Echo
• CY2026 Medicare Physician Fee Schedule Final Rule
• CMS Fact Sheet on the Physician Fee Schedule
• CMS Press Release on the Physician Fee Schedule
• ASE’s Webpage on Medicare Physician Payment Reform