AHA Comments to CMS on CY 2026 Physician Fee Schedule Proposed Rule

September 12, 2025

The Honorable Mehmet Oz, M.D.
Administrator
Centers for Medicare & Medicaid Services
7500 Security Boulevard
Baltimore, MD 21244-1850

RE: CMS-1832-P Medicare and Medicaid Programs; Calendar Year 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

Dear Administrator Oz:

On behalf of our nearly 5,000 member hospitals, health systems and other health care organizations; our clinician partners - including more than 270,000 affiliated physicians, 2 million nurses and other caregivers - and the 43,000 health care leaders who belong to our professional membership groups, the American Hospital Association (AHA) appreciates the opportunity to comment on the Centers for Medicare & Medicaid Services' (CMS') physician fee schedule (PFS) proposed rule for calendar year (CY) 2026.

The AHA applauds CMS' proposals to extend many telehealth regulatory flexibilities through 2026. There are, however, many statutory waivers that are scheduled to expire on Sept. 30, 2025. As such, we urge CMS to work with Congress to extend these telehealth provisions. Their expiration would result in a telehealth "cliff," risking reduced access to care for the millions of Americans who rely on virtual modalities to receive necessary services. As we have previously stated, making certain telehealth waivers permanent, such as the geographic and originating site restrictions, is essential for ensuring continued access to medical care and services.

We are also pleased that the agency proposes a positive payment update for physicians in CY 2026, which will be the first in several years. We remain concerned, however, about the overall inadequacy of Medicare physician payments and its potential impact on access to and quality of care. The conversion factor has declined precipitously over the past 25 years, especially when accounting for inflation. Hospitals and health systems are currently facing the perfect storm of payment shortfalls coupled with a significant nationwide staffing shortage, additional administrative burdens and an aging beneficiary population. Therefore, we urge CMS to work with Congress to ensure more adequate physician payment updates going forward.

We are concerned with CMS' proposals to apply an efficiency adjustment to the work relative value units (RVUs) and to reduce by half the facility practice expense (PE) RVUs allocated based on physician work. Implementing a uniform 2.5% reduction to the work RVUs for all non-time-based services to adjust for efficiency is arbitrary and overly broad. In addition, the proposed change to the indirect PE allocation methodology would result in significant and unsustainable payment impacts for specialty physicians who frequently practice in a facility setting. We urge CMS not to finalize these proposals and instead to consider policy options that do not impart such negative impacts.

The AHA appreciates CMS' commitment to improving the quality of care while reducing costs through the proposed Ambulatory Specialty Model (ASM). However, we have questions and concerns regarding ASM's financial model, attribution methodology and quality performance standards. We urge CMS to move forward with the ASM as either a voluntary model or a MIPS Value Pathway rather than requiring participation for all eligible physicians beginning in 2027.

We appreciate your consideration of these issues. Our detailed comments are attached. Please contact me if you have questions or feel free to have a member of your team contact Joanna Hiatt Kim, AHA's vice president of payment policy at [email protected].

Sincerely,

/s/

Ashley Thompson
Senior Vice President
Public Policy Analysis & Development

Enclosure