Navigating the New Normal
Despite the first increase to the Medicare Conversion Factor in 6 years, multi-faceted Physician Fee Schedule changes impacting both work relative value units (wRVUs) and practice expense RVUs mark the beginning of an ongoing three-year adjustment cycle.
As your organization moves forward, it’s important to fully understand the impact within your organization – including how reimbursement and RVU changes may affect compensation plan decisions, investment per physician FTE, hospital-based services and arrangements, and strategic workforce planning in facility settings.
Work RVU Changes
- Efficiency Adjustment: CMS reduced wRVU values for Current Procedural Terminology (CPT) codes to reflect improved clinical efficiencies over time.
- Beginning in 2026, there is a 2.5% reduction in wRVU values for specific non-time-based procedures.
- Adjustments will be recalculated and applied every three years going forward.
- Reductions do not apply to time-based codes like evaluation and management, care management, or behavioral health services.
- Efficiency Adjustments will impact over 7,000 unique CPT codes.
- Physician Compensation Implications: wRVU decreases, which could exceed 5% in certain specialties, may result in reduced compensation if not offset by changes to compensation plans.
Work RVU Market Insights and Changes by Specialty
Organizational awareness of the CMS wRVU Efficiency Factor adjustment is growing. However, many are still uncertain about the impact of it and if or how they will address it. Based on recent polling results, about 1/3 of organizations were planning no changes, 1/3 were still evaluating the impact to inform any potential adjustments, and the rest were contemplating a budget-neutral adjustment to rates.
Real-time wRVU changes typically appear in market survey data after 1-2 years, depending on the pace of market adoption.
The analysis below represents the anticipated impact of all Physician Fee Schedule changes between 2025 and 2026.
Hospital-Based
- Radiology – Neurointerventional: (660), -5.2%
- Radiology – Diagnostic: (326), -3.1%
- Radiology – Interventional: (171) -2.5%
- Pathology – Anatomic and Clinical: (171) -2.5%
- Pathology – Dermatopathology: (165) -2.5%
Surgical
- Dermatology – Mohs Surgery: (263), -2.1%
- Plastic and Reconstructive Surgery: (155), -2.1%
- Orthopedic Surgery – General: (148), -1.7%
- Otolaryngology – General: (98), -1.3%
Medical
- Cardiology – Electrophysiology: (239), -2.1%
- Cardiology – Invasive – Interventional: (179), -1.7%
- Cardiology – General: (76), -0.9%
- Neurology: (27), -0.6%
- Psychiatry – General: 18, 0.5%
Primary Care
- Family Medicine: 14, 0.2%
- Internal Medicine: 15, 0.3%
Practice Expense (PE) RVU Changes
Material reductions to PE RVUs in the facility setting, which signify a move towards site-neutral payments, may materially impact reimbursement. Adjustments will be recalculated and applied every three years going forward.
There is increasing activity regarding hospital-based services and PSA negotiations. Anticipate additional requests for support payment increases due to the reduction in PFS Facility PE RVUs and associated reimbursement. These anticipated requests may provide opportunities to modernize PSAs to address staffing mix, strategic alignment and performance to system goals.
Family Medicine
- Facility Reimbursement Change: (9.2%), ($24,487) per FTE
- Non-Facility Reimbursement Change: 8.2%, $32,142 per FTE
Cardiology – Invasive – Interventional
- Facility Reimbursement Change: (3.8%) ($19,617) per FTE
- Non-Facility Reimbursement Change: 12.0%, $73,341 per FTE
Cardiology – General
- Facility Reimbursement Change: (3.8%), ($14,752) per FTE
- Non-Facility Reimbursement Change: 5.1%, $23,696 per FTE
Endocrinology and Metabolism
- Facility Reimbursement Change: (8.4%), ($22,862) per FTE
- Non-Facility Reimbursement Change: 7.1%, $24,702 per FTE
Dermatology
- Facility Reimbursement Change: (10.6%), ($49,917) per FTE
- Non-Facility Reimbursement Change: 4.6%, $32,617 per FTE
Gastroenterology
- Facility Reimbursement Change: (7.4%), ($33,453) per FTE
- Non-Facility Reimbursement Change: 12.7%, $105,975 per FTE
Neurology
- Facility Reimbursement Change: (6.6%), ($15,628) per FTE
- Non-Facility Reimbursement Change: 6.7%, $18,977 per FTE
Oncology – Hematology and Oncology
- Facility Reimbursement Change: (8.8%), ($24,339) per FTE
- Non-Facility Reimbursement Change: 6.9%, $24,710 per FTE
Cardiothoracic Surgery
- Facility Reimbursement Change: (3.2%), ($16,478) per FTE
- Non-Facility Reimbursement Change: (0.9%), ($4,560) per FTE
General Surgery
- Facility Reimbursement Change: (4.9%), ($19,192) per FTE
- Non-Facility Reimbursement Change: 3.6%, $16,464 per FTE
Ophthalmology – General
- Facility Reimbursement Change: (9.9%), ($47,997) per FTE
- Non-Facility Reimbursement Change: 0.2%, $1,331 per FTE
Orthopedic Surgery – General
- Facility Reimbursement Change: (6.9%), ($39,653) per FTE
- Non-Facility Reimbursement Change: (0.3%), ($2,195) per FTE
Critical Care Medicine
- Facility Reimbursement Change: (4.0%), ($7,742) per FTE
- Non-Facility Reimbursement Change: 12.0%, $29,902 per FTE
Diagnostic Radiology
- Facility Reimbursement Change: 0.0%, $139 per FTE
- Non-Facility Reimbursement Change: 1.4%, $7,413 per FTE
Emergency Medicine
- Facility Reimbursement Change: 0.8%, $2,126 per FTE
- Non-Facility Reimbursement Change: 4.3%, $12,843 per FTE
Hospitalist (Internal Medicine)
- Facility Reimbursement Change: (6.1%), ($12,796) per FTE
- Non-Facility Reimbursement Change: (5.1%), ($10,795) per FTE
Pathology (Anatomic and Clinical)
- Facility Reimbursement Change: (0.2%), ($591) per FTE
- Non-Facility Reimbursement Change: 0.1%, $436 per FTE
Looking for support? Here’s how we can help!
- Conduct impact analysis using robust, proprietary datasets
- Evaluate care models to identify patient visit and productivity improvement opportunities
- Assess workforce requirements across clinical and non-clinical roles to enhance patient care delivery while unlocking operational and financial improvements
- Facilitate change management activities to evaluate options, including communication and implementation strategies
- Support the renegotiation of key Professional Service Arrangements
