The finalized 2026 Medicare Fee Schedule has been met with both relief and serious concern by the American Medical Association (AMA). While the rule delivers a crucial payment update and expands telehealth, the AMA cautions that new policies targeting efficiency and facility payments could destabilize independent physician practices nationwide, ultimately threatening seniors' access to care.
A Temporary Victory: The 2.5% Payment Update
The most positive element of the rule is the inclusion of a vital, one-time 2.5 percent payment update for physician reimbursements. AMA President Dr. Bobby Mukkamala stated that avoiding a payment reduction, as seen in past years, is a 'significant positive for 2026 and a win for patients’ access to care.' This move helps protect seniors' ability to see their doctors. However, the AMA emphasized that this temporary correction fails to keep pace with the rising costs of running a medical practice. They continue to urge Congress to enact long-term, inflation-based updates tied to the Medicare Economic Index to ensure the sustained stability of physician practices.
Telehealth Permanence: A Modernization Milestone
The AMA strongly praised the finalization of several proposals that permanently expand access to telehealth services, a policy they have long advocated for. This includes the permanent removal of frequency limits on telehealth services provided to patients in hospitals and skilled nursing facilities, the permanent allowance of virtual direct supervision for most services requiring physician oversight, and continuing the policy that allows teaching physicians to provide virtual supervision to residents across all training sites, not just those in rural areas.
Critical Flaws: Policies That Punish Private Practice
Despite the wins, the AMA warned that two finalized policies directly undercut the financial viability of private physician practices and risk encouraging harmful market consolidation. The first is The Efficiency Adjustment, which is set to reduce payment for more than 7,000 physician services, impacting 95 percent of all services provided by doctors. The AMA contends this adjustment is based on flawed data and should be replaced with an alternative that strengthens primary care payment accuracy.
The second is the Facility Payment Reduction. CMS finalized a reduction in payment rates for services performed in facilities like hospitals or ambulatory surgical centers (ASCs). The AMA argues that these cuts do not reflect the true resource costs incurred by practices in these settings. The result, Dr. Mukkamala noted, is that the rule risks making it harder for independent practices to remain viable, a consequence—encouraging consolidation—that CMS explicitly sought to avoid.
If these policies take full effect, the AMA estimated that 37 percent of oncologists and 37 percent of obstetricians and gynecologists could face reimbursement cuts ranging from 10 to 20 percent. The AMA will collaborate with CMS to share real-world data and address these concerns as the rule is implemented, aiming to preserve patient access and practice stability during an ongoing physician shortage.
Source: American Medical Association | November 2, 2025