In a potential sign of coming payment relief for physicians, the U.S. House Energy and Commerce Committee’s budget-reconciliation text includes an update to the conversion factor in the physician fee schedule under the Medicare program.
The American College of Radiology (ACR) noted the development May 16, saying the legislation would add $9 billion in new spending to the Medicare Physician Fee Schedule (MPFS) via the inflation-based update to the conversion factor.
In 2026, the conversion factor will be updated by 75% of the Medicare Economic Index (MEI) and updated by 10% of MEI every year thereafter, the ACR noted, adding that an annual increase to the MPFS based on MEI was one of the issues ACR members advocated in favor of May 7, during Capitol Hill Day.
The update is noted in Section 44304 of the document. Last year, the ACR and a larger coalition of healthcare provider organizations called for a permanent MEI-based inflationary update to the MPFS.
American Medical Association (AMA) President and CEO James Madara, MD, said the recommendation “provides the first Medicare physician payment update that is permanently built into baseline Medicare rates since the passage of the Medicare and CHIP Reauthorization Act (MACRA) in 2015." The committee’s proposed update for 2026 would be “significantly higher than any of the annual physician payment updates in MACRA," Madara noted.
"In addition, the bill eliminates the dual conversion factor update of 0.25% for most physicians and 0.75% for alternative-payment model participants and replaces them with a single conversion factor update for 2027 and beyond at 10% of the MEI," the AMA explained.
Numerous provisions attempt to reform the Medicaid program, the ACR said, including but not limited to federal work requirements, a moratorium on state provider taxes, reduced certain federal medical assistance percentages, and increased cost sharing for Medicaid expansion adults with incomes between 100% and 138% of the federal poverty level.
The legislation now advances to the House Committee on the Budget to assemble the Energy and Commerce Committee section with sections advanced by other committees toward one bill for a full House vote, according to the ACR. A House floor vote could take place prior to Memorial Day. Upon passage, the legislation would move to the U.S. Senate for consideration.
