decisionhealth Newsletters, Part B News - 2025 Issue 7 (July)
CMS takes hatchet to practice expense RVUs in facility setting
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Article Overview
This article explains a CMS proposal in the 2026 Medicare physician fee schedule that would change how practice expense relative value units are distributed between facility and non-facility services. It is relevant to physicians, hospital-owned practices, and coding or reimbursement professionals who follow Medicare payment methodology and physician fee schedule updates. The article covers the policy rationale, the proposed methodology change, and the expected payment impact by site of service.
Why This Topic Matters
The proposal could alter Medicare physician reimbursement across site-of-service settings and affect payment expectations for facility-based services. Organizations that bill under the physician fee schedule may need to understand the proposed methodology and monitor final rule changes.
Article Sections
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Physician payments
Introduces the proposed Medicare physician fee schedule changes and frames the discussion around payment distribution and site-of-service effects.
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Fewer owners, fewer indirect expenses
Summarizes CMS’s rationale for revising the practice expense methodology and the broader market changes cited in support of the proposal.
What You Will Learn
- What CMS is proposing for practice expense RVU methodology in the 2026 Medicare physician fee schedule
- How the proposal is framed in relation to facility and non-facility service settings
- Why CMS says the current allocation approach may no longer reflect practice patterns
- What kinds of reimbursement impacts the proposal could have across site of service
Who Should Read This
- Physicians
- Practice managers
- Hospital-owned physician practices
- Medical coders
- Billing and reimbursement staff
- Revenue cycle professionals
Codes Discussed
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