AMGA Calls for Urgent, Systematic Reform to Medicare Physician Fee Schedule

Temporary Fixes Mask Deeper Structural Issues
Alexandria, VA – AMGA today reiterated its call for comprehensive reform of the Medicare Physician Fee Schedule (PFS), warning that last-minute congressional interventions to avert further reductions to the conversion factor (CF) are unsustainable and obscure the need for lasting structural improvements.

While recent legislative action has temporarily halted a decrease in the Medicare conversion factor for 2026, this stopgap approach only highlights the fundamental instability of the current system. Without congressional intervention, the conversion factor would have once again declined—continuing a trend that undermines the financial viability of group practices and integrated systems of care and the broader goal of high-value care.

Beginning in calendar year (CY) 2026, the Centers for Medicare & Medicaid Services (CMS) will implement two separate conversion factors as required by statute:

• One for Qualifying Alternative Payment Model (APM) Participants (QPs), with a statutory update of +0.75%.
• One for non-qualifying APM participants, with a statutory update of just +0.25%.

Even with the inclusion of a one-year, congressionally mandated +2.5% increase and technical adjustments to account for changes in relative value units (RVUs), the proposed CY 2026 conversion factors—$33.59 for QPs and $33.42 for non-QPs—barely represent a modest rebound from the current $32.35 rate. These incremental increases fail to reverse the long-term erosion in Medicare physician payment, which has not kept pace with inflation or practice cost growth.

“Health systems and medical groups continue to bear the brunt of an outdated and underfunded reimbursement model,” said AMGA President and CEO Jerry Penso, MD, MBA. “Without systematic reform, Medicare's current fee-for-service framework will remain misaligned with the shift toward high-value care.”

AMGA urges policymakers to move beyond short-term fixes and work with stakeholders to develop a predictable, stable payment system that:

• Provides sustainable annual updates to the conversion factor that reflect inflation and practice costs;
• Incentivizes participation in high-value care models;
• Reduces the administrative burden associated with regulatory compliance; and
• Aligns Medicare policy with the realities of team-based, coordinated care delivery.
• Supports a healthcare system that emphasizes prevention and chronic care management, resulting in improved outcomes for all Americans.

“CMS and Congress must take this opportunity to modernize the PFS and build a payment foundation that supports innovation, sustainability, and improved outcomes,” Penso added.

AMGA is reviewing the rule closely and will file additional comments with CMS. 

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About AMGA

AMGA is a trade association leading the transformation of healthcare in America. Representing multispecialty medical groups and integrated systems of care, we advocate, educate, innovate, and empower our members to deliver the next level of high performance health. AMGA is the national voice promoting awareness of our members’ recognized excellence in the delivery of coordinated, high-quality, high-value care. More than 175,000 physicians practice in our member organizations, delivering care to one in three Americans.