Calendar Year (CY) 2026 Medicare Conversion Factors Higher for Physicians in Alternative Payment Models

Diana C. Mosquera, MD, MBA, FASA and Vanessa Salcedo, MPH

Summary: Physicians who are qualifying participants (QPs) in advanced alternative payment models (APMs) will receive a higher conversion factor update and, thus, higher Medicare payments in 2026 compared to physicians who are not QPs.

Differentiated payment updates for CY 2026:

• +0.75% for clinicians in Advanced APMs
• +0.25% for non-APM clinicians

CY 2026 Medicare Conversion Factors

On July 14, 2025, the Centers for Medicare & Medicaid Services (CMS) released the calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) Proposed Rule announcing proposed changes to payment policies under the PFS. These and other proposed changes to Medicare Part B topics are set to take effect on or after January 1, 2026, and Medicare is currently seeking public comments. These proposed changes are in line with the ongoing CMS trend of shifting financial risk to providers and advancing toward alternative payment models (APMs) that encourage broad and meaningful clinician participation, including primary and specialty care.

CMS proposes a two-tiered approach to the anesthesia conversion factor and the PFS conversion factor, yielding a total of four different conversion factors. This change is consistent with the rules set by the 2015 Medicare Access and CHIP Reauthorization Act (MACRA). Under MACRA, physicians who are qualifying participants (QPs) in Advanced APMs will receive a slightly higher conversion factor update and, thus, slightly higher Medicare payments in 2026 compared to physicians who are not QPs. Eligible physicians who are QPs for the 2024 performance period and beyond will receive an increased physician fee schedule update of 0.75 % based on the QP conversion factor in the corresponding payment year. QPs in advanced APMs will continue to be excluded from MIPS reporting and payment adjustments for the applicable year.

Historically, APM entities (which QPs are a part of) received a lump sum APM Incentive Payment in the corresponding payment year. This payment was calculated as a specified percentage of the QP’s paid claims for covered professional services from the base year. In addition, the Incentive Payments were often not entirely distributed to providers and some portion went to cover implementation costs. The new tiered approach will allow for the entire incentive to flow through to QPs as a percentage adjustment to the CF based on whether the QP is a participant or non-participant in an APM.

Under current law, payment year 2026 is the last year for the APM Incentive Payment (based on 2024 eligibility), which amounts to a 1.88% payment adjustment- lower than in previous years. Therefore, the tiered CF approach for QPs and non-QPs is a significant change since the gap in CFs will likely widen over time as CMS seeks to incentivize clinician participation in advanced APMs. Of note, only Congress can make changes to either the QP conversion factor updates or the APM Incentive Payment.

Proposed Calendar Year 2026 Medicare Conversion Factors
Type of Participant	2025 Final CF	2026 Proposed CF	Percent Change
Anesthesia (Qualified APM Participants)	$20.32	$20.68	1.80%
Anesthesia (Non-Qualified APM Participants)	$20.32	$20.57	1.30%
RBRVS APM Participants	$32.35	$33.59	3.84%
RBRVS – Non-APM Participants	$32.35	$33.42	3.32%

Qualifying Participant vs Partial Qualifying Participant

To become a Qualifying Participant in the CMS Quality Payment Program (QPP) you must meet participation thresholds based on your levels of payment or volume of patients through Advanced APMs. Clinicians that meet lower participation thresholds could become a Partial QP.

	Qualifying Participant	Partial Qualifying Participant
Participation Threshold	At least 75% of Medicare Part B payments earned through an Advanced APM Entity Or At least 50% of Medicare patients seen through an Advanced APM Entity	At least 50% of Medicare Part B payments earned through an Advanced APM Entity Or At least 35% of Medicare patients seen through an Advanced APM Entity
QP Performance Period	January 1- August 31	January 1- August 31
MIPS Participation	Excluded from MIPS reporting & MIPS payment adjustments	Optional MIPS participation & payment adjustment

Advanced APMs Available for Anesthesiologists & Pain Physicians

There are a limited number of APMs available for anesthesiologists. In CY 2026, anesthesiologists can participate in these Advanced APMs under the Quality Payment Program (QPP):

1. Medicare Shared Savings Program (MSSP) – Enhanced Track
2. Bundled Payments for Care Improvement Advanced (BPCI Advanced)
3. Transforming Episode Accountability Model (TEAM) begins 1/1/2026.

Additionally, CMS recently announced a new mandatory model called Ambulatory Specialty Model (ASM) set to begin on January 1, 2027.

Why You Should Participate in the APMs

APMs aim to reward physicians for high-quality, cost-efficient care, which aligns with anesthesiologists’ vital roles in patient safety, perioperative care, and pain management. In addition to the higher CF adjustment, participating in APMs positions you and your practice as valuable partners to hospital administrators. This enhances your influence and integration into broader tactics that align with care redesign and accountable care strategies.

Member Resources for You

Explore Alternative Payment Models (APMs) | American Society of Anesthesiologists (ASA)

ASA continues to monitor and develop resources for members to prepare to become part of APMs. ASA also provides formal comments in response to proposed rules and regulations asking CMS and other federal agencies to provide opportunities for anesthesiologists to be able to successfully participate in APMs.

References

1. American Medical Association. 2026 Medicare Physician Payment Schedule and Quality Payment Program Proposed Rule Summary. Published July 2025. Accessed July 25, 2025. AMA 2026 mpfs proposed rule summary (PDF)
2. Centers for Medicare & Medicaid Services (CMS), Department of Health and Human Services (HHS).Medicare and Medicaid Programs; CY 2026 Payment Policies Under the Physician Fee Schedule and Other Changes to Part B Payment and Coverage Policies; Medicare Shared Savings Program Requirements; and Medicare Prescription Drug Inflation Rebate Program. Proposed rule.Fed Regist.2025;90(136):32352-32645. CMS-1832-P. RIN 0938-AV50.
3. Centers for Medicare & Medicaid Services. "Advanced Alternative Payment Models (APMs)." Quality Payment Program, U.S. Department of Health and Human Services, qpp.cms.gov/apms/advanced-apms. Accessed 1 Aug. 2025.