Reimbursement, in context.

Physician Fee Schedule

Two conversion factors

These rounded conversion factors represent increases of 3.77% and 3.26%, respectively, from 2025. They are inputs to payment calculations—not reimbursement amounts for individual visits. Actual payment depends on the service, locality, setting, and applicable adjustments.

CMS also finalized a 2.5% efficiency adjustment to work RVUs for many non-time-based services, with specified exemptions. The rule changes payment for skin substitutes to incident-to supplies when used in covered application procedures.

For telehealth, the rule removes frequency limits on subsequent inpatient and nursing-facility visits and critical-care consultations. This does not establish universal telehealth coverage; check current service, patient-location, and billing requirements.

Hospice · FY 2027

A 2.3% payment update

The FY 2027 hospice payment update is 2.3%. The aggregate cap amount is $36,174.75. Hospices that do not meet required quality-reporting requirements face a four-percentage-point reduction to the update.

The final rule requires an election-statement addendum for all Medicare beneficiaries at hospice election, explaining items and services the hospice determines are unrelated to the terminal illness and related conditions. Review the full rule for implementation details.

These FY 2027 changes apply to the payment year beginning October 1, 2026; they should not be applied to earlier dates of service.

Skilled nursing · FY 2027

A 2.4% payment-rate update

CMS finalized a 2.4% update to SNF PPS rates, reflecting a 3.3% market basket increase less a 0.9 percentage-point productivity adjustment. Facility-specific payment remains subject to other factors, including value-based purchasing adjustments.

The rule also changes quality reporting. The shortened submission timeframe begins with the FY 2029 SNF Quality Reporting Program; the removal of two COVID-19 vaccination measures begins with FY 2028. These dates are distinct from the FY 2027 payment update.

Home health · CY 2026

An estimated 1.3% aggregate decrease

CMS estimates that total Medicare payments to home health agencies decrease by 1.3% in 2026 compared with 2025, after the annual update and other finalized adjustments. This is an aggregate estimate, not a uniform reduction for every agency.

The rule updates PDGM case-mix weights and low-utilization payment thresholds, and broadens the face-to-face encounter regulation regarding which physicians can perform the encounter.