The 2026 Medicare Physician Fee Schedule (MPFS) arrives at a complicated moment for health plans. Leaders are still managing the financial drag from the 2025 conversion factor cut, network pressures tied to staffing shortages, and quickly shifting behavioral health and digital care models. The new MPFS rule introduces changes that may look incremental on paper, but together they impact how health plans will need to approach pricing, contracting, and operational planning for the next several years.
These updates land squarely in the middle of core plan functions. They affect how much you pay physicians, how you structure multi-specialty networks, how you translate federal policy into Medicaid and commercial pricing strategies, and how your delegated entities will need to adjust their own systems. The consequences will hit your local markets directly.
Prepare for a year in which contract language, fee schedules, and internal coordination all need attention with the 2026 MPFS changes altering the payment logic many HMO products rely on.
Why the 2026 MPFS Matters More Than a Routine Annual Update
Most plan leaders know the MPFS influences Medicare Advantage pricing, but many teams use Medicare as a reference point across their other lines of business including Medicaid, commercial individual, commercial group, and delegated provider contracts. Even small changes in Relative Value Units (RVUs) or conversion factors can have meaningful financial impact once they ripple through actuarial rate development, capitation settlements, or contract escalators.
This year brings three policy dynamics that matter strategically:1
- Two separate conversion factors for qualifying APM participants and non-participants
- New efficiency adjustment that lowers work RVUs for many procedural codes
- Updates to practice expense assumptions that alter office versus facility relativity
Layer those changes on top of the unresolved 2025 payment cut and the one-time 2.5 percent increase for 2026, and plans will see non intuitive effects that vary by specialty and code mix.² These dynamics influence everything from specialist recruitment to delegated group negotiations. Leaders should not expect historic trends to hold.
The Real Meaning of the Two Conversion Factors
Plans that base provider payment on a percent of Medicare now face a new interpretive problem. Medicare will publish one conversion factor for clinicians who qualify for advanced alternative payment model status and another for everyone else.¹
This sounds simple, but it creates genuine exposure for health plans:
- Existing contracts probably do not specify which factor applies
- Providers may argue for the higher APM factor even if the plan has no APM incentive structure
- Delegated groups may use this as a negotiation lever
A straightforward solution is to define a single reference point going forward, usually the non-APM factor. The key insight is not which value you pick, but that you pick one at all and protect your organization from ambiguity in 2026 and beyond.
How Efficiency & Practice Expenses Reshape Specialty Payments
CMS is applying a negative 2.5 percent efficiency adjustment to work RVUs and intraservice time for non-time-based codes.¹ Procedural specialties will feel this more than primary care. At the same time, practice expense updates give office-based settings higher recognition of indirect costs and introduce OPPS based data for some technical services.¹
Executives do not need to track the micro details to understand the strategic pressure points. Procedural reimbursement will not track historic growth patterns. Primary care, care management, and integrated behavioral health products will gain relative emphasis. And some specialties will see meaningful changes even if your percent of Medicare stays the same.
This is where network strategy intersects with pricing. Plans that want balanced specialty availability need to anticipate where financial strain may emerge and get ahead of renegotiation requests instead of reacting to frustration after payment changes take effect.
Expanded Telehealth & Integrated Behavioral Health Options
CMS is permanently removing several telehealth visit frequency limits, adopting virtual direct supervision through real time audio/video, and finalizing new Advanced Primary Care Management add-on codes that support behavioral health integration and collaborative care.¹ The rule also expands payment for digital mental health treatment devices used in ADHD care.¹
These changes matter because they accelerate shifts that plans were already navigating: blended behavioral and primary care models, new digital tools that bill under medical benefits, and growing workloads for providers who already face burnout pressure.
Pricing these codes is only part of the work. Leaders will also need to consider how these codes interact with existing utilization management policies, delegated utilization review structures, and member benefit design. Plans wanting to advance whole-person care models will find new opportunities here, but only if systems are ready to support them.
What Contracting Leaders Need to Adjust Now
Even experienced contracting teams do not always catch where Medicare policy changes collide with contract wording. The AMA Payor Contracting Toolkit points to several areas where ambiguity or unilateral policy changes create disputes.³ The 2026 MPFS magnifies these issues.
The most immediate risks show up in two categories. Contract language that references Medicare without specifying the year, conversion factor type, or site of service (this is the year to tighten that language). And delegated or IPA agreements that rely on shadow pricing or historical fee schedules. These arrangements may experience accidental overpayment or underpayment if the 2026 changes are not integrated cleanly.
Plans should also revisit amendment and notice provisions. Many payor agreements allow unilateral policy updates through manuals, which the AMA notes can create significant confusion or downstream payment inconsistency.³ A more structured approach is preferable in a year with major pricing changes.
What Operational Leaders Need to Prepare For
The operational lift is often where MPFS changes create the most friction. Claims platforms, benefit configuration, provider communication, and UM criteria all require coordinated updates, and without that alignment health plans start to see payment variance between fee schedules and system logic, provider abrasion tied to unexpected denials or payment shifts, and retroactive adjustments that strain both relationships and financial forecasting.
The expanded telehealth and behavioral health codes add another layer of complexity because they introduce new coding patterns that may not fit cleanly with older system edits. Specialty pharmacy workflows, prior authorization rules, and bundling logic may also need revision to prevent operational bottlenecks.
Teams need to reconcile fee schedules, policy manuals, and system edits so payment behavior is predictable rather than fragmented across platforms. They also need to prepare clear and proactive provider communications that explain payment impacts, highlight new codes, and describe any changes related to telehealth or supervision requirements.
Operational misalignment creates real financial waste and unnecessary friction across provider networks, which can be avoided when teams approach MPFS updates with a coordinated and timely strategy.
Use MPFS Changes to Strengthen Network & Clinical Strategy
Use the 2026 MPFS to advance broader goals that many health plans already hold.
The efficiency adjustment and practice expense changes create new incentives to strengthen primary care and integrated behavioral health strategies. The telehealth and digital mental health updates give plans more flexibility to deliver care in ways that members increasingly prefer. And the conversion factor split creates a clear opportunity to revisit contract structure and reduce ambiguity that often slows negotiations.
Clearlink frequently supports plans in turning regulatory updates into operational advantages. The MPFS can serve as a catalyst for organizations that want to modernize contracting templates, mature delegated oversight, update clinical operations, and improve predictability in medical cost trend.
Contact us to strengthen your contracting, pricing, and operational readiness for the 2026 MPFS and beyond.
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