Sponsors (44)
The bill aims to make physician payments more accurate, predictable, and transparent—benefiting patients and providers—but does so in ways that risk higher Medicare spending, budget-neutral tradeoffs across specialties, and added administrative complexity and short-term uncertainty.
Medicare beneficiaries and providers will receive more accurate, cost-reflective physician payments tied to current wages, supplies, and equipment, helping sustain provider participation and patient access.
Physicians and practices gain greater payment stability and predictability through a statutory update schedule (at least once every 5 years) and a ±2.5% annual cap on conversion-factor adjustments, easing budgeting and practice planning.
Establishes a defined, transparent correction process to fix prior budget-neutrality or utilization estimate-driven adjustments, reducing unexpected payment swings for providers and improving future payment accuracy.
Higher, more accurate payments and retrospective corrections could increase Medicare spending and put additional pressure on the Medicare trust fund and taxpayers.
The ±2.5% annual cap and limited adjustment mechanism could prevent timely larger corrections when needed, misaligning payments with actual costs and potentially harming provider participation or patient access.
Replacing a hard-coded amount with an annually-set subordinate item could create uncertainty for beneficiaries and providers until the amount is published and—if set lower—could reduce payments compared with the prior fixed figure.
Based on analysis of 5 sections of legislative text.
Revises Medicare physician payment rules: adds 5‑year updates to PE RVU direct costs, requires corrections for estimated-utilization errors, and caps annual conversion-factor changes at 2.5% beginning 2027.
Introduced March 30, 2026 by Gregory Francis Murphy · Last progress March 30, 2026
Makes multiple targeted changes to how Medicare sets physician payments. It requires the HHS Secretary to update category-wide direct cost inputs used in practice expense relative value units (PE RVUs) at least once every five years, adds a new process to correct prior budget-neutral adjustments that were based on estimated utilization (starting with 2027), moves a previously hard-coded budget-neutrality dollar amount into a year-specific cross-reference, and limits year-to-year swings in the Medicare conversion factor to no more than 2.5% (starting 2027) while preserving the overall budget-neutrality requirement. The changes affect how CMS calculates physician fee schedule payments, add administrative steps for assumption-corrections and stakeholder consultation, and smooth conversion-factor volatility to reduce large annual payment shocks to physician payments and practice finances.