As healthcare continues its evolution under value-based care, the recently released CY 2026 Medicare Physician Fee Schedule Final Rule (effective January 1, 2026) presents a meaningful set of changes and opportunities for clinical practices, ACOs, and quality-reporting initiatives. From conversion factor updates to shifts affecting the Medicare Shared Savings Program (MSSP), CMS is proving that its emphasis on care coordination, integrated care, and quality of care improvement is here to stay.

Below, Quantician shares the three most influential rulings, from a Qualified Registry perspective, to update, prepare, and guide Qualifying Participants ahead of 2026.

Overview While the CY 2026 Final Rule introduces new models and refinements, several foundational elements within Medicare’s quality programs remain steady, offering participants a degree of predictability heading into the next performance year.

To start, the Merit-based Incentive Payment System (MIPS) performance threshold will hold at 75 points through payment year 2030, signaling CMS’s intent to maintain consistency in baseline expectations while advancing other reforms. Likewise, the agency continues its gradual transition toward MIPS Value Pathways (MVPs), adding six new specialty-specific options and granting additional time for registries and vendors to expand support for these frameworks. The Quality Measure Inventory sees only modest change, decreasing slightly to 190 measures with five additions and ten retirements, reinforcing that CMS’s focus is refinement, not reinvention.

This stability provides a clear runway for organizations to align measure portfolios, reporting infrastructure, and care-coordination strategies with both MIPS and ACO requirements. At the same time, CMS’s attention to care-coordination models signals the program’s direction toward more integrated, longitudinal care delivery.

The Big Picture: Shifting Incentives Headlines report a modest uptick in conversion factors (CFs) - the annual dollar amount set by CMS to turn Relative Value Units (RVUs) into appropriate Medicare payment amounts for each service under the Physician Fee Schedule (PFS). Additionally, each service is composed of three RVU components, as shown below, and are adjusted based on a Geographic Practice Cost Index (GPCI) to account for the Practice region. Lastly, this total is then multiplied by the conversion factor to represent a final payment.

Three RVU Components:

1. Work RVU - The provider’s time, effort, and skill.
2. Practice Expense RVU - Reflects overhead costs (staff, rent, equipment, etc.).
3. Malpractice RVU - Liability insurance costs.

The Formula:

Medicare Payment = [(Work RVU x GPCI)+(Practice Expense RVU x GCPI)+(Malpractice RVU x GCPI)+] * Conversion Factor

For physicians participating in advanced payment models (APMs), an increase of +3.77%, reflecting a $33.5675 conversion factor, is to be expected. For those outside, an increase of +3.26% and a conversion factor of $33.4009 will be observed. This matters because it means positive MIPS adjustments have the power to tip the scales for provider groups deciding between FFS and moving further into value-based models. This signals CMS’s continued, albeit cautious, movement toward strengthening payment adequacy while managing constrained budgets.

At its core, the rule underscores the further alignment of payment with higher-value, integrated care models - particularly those that coordinate across settings, leverage behavioral health, and adopt advanced primary care capabilities.

A Strategic Look into Telehealth, Care Management & Data Capture When it comes to integrated care, telehealth remains one of CMS’s strongest levers for connection and coordination. In the CY 2026 Final Rule, CMS did not expand the list of permanent telehealth services wholesale, but instead refined how services qualify for inclusion. The agency has retired the “provisional” versus “permanent” distinction and will now base eligibility on whether a service can be effectively furnished through real-time, two-way audio-video communication, or, when appropriate, audio only.

This shift reflects an effort to modernize the framework without overcomplicating it. Rather than continuing to expand the list indefinitely, CMS is emphasizing usability, consistency, and the flexibility for providers to deliver care virtually when clinically appropriate. For registries and reporting partners, this means that data capture strategies must evolve to distinguish between tele-delivered and in-person encounters, ensuring accuracy for both quality and cost attribution.

Beyond telehealth, the Final Rule continues to reshape Care Management. CMS clarifies the Rural Health Clinic (RHC) and Federally Qualified Health Center (FQHC) pathways for standalone care coordination payments and formalizes real-time, audio-video “direct supervision” for certain services. These updates are more than administrative as they enable practices to scale care-coordination activities through hybrid and virtual models, expanding access to patients in rural or resource-limited communities.

From a data-strategy standpoint, these updates signal convergence. Payment structure, Care Management codes, and telehealth delivery are now interlinked, requiring registries to strengthen the bridge between CPT/HCPCS billing data, EHR logs that record care coordination events, and quality measure reporting. With CMS applying downward pressure on non-time-based work RVUs to improve efficiency, precision in how data is captured, mapped, and reported becomes a strategic differentiator.

In essence, the Final Rule challenges data and quality-reporting organizations to refine their digital infrastructure. Success will hinge on connecting every element of the care-delivery ecosystem. This includes combining billing, performance measurement, and clinical documentation into one cohesive, measurable story of care.

Implications for ACO & Value-Based Care Partners The final rule also includes relevant updates for the MSSP nested within it, indicating CMS’s continued effort to strengthen accountability and accelerate the shift toward value-based risk. Under the new policy, Track 1 BASIC ACOs will now transition to two-sided risk within five years rather than seven, beginning with agreement periods that start on or after January 1, 2027. This change shortens the glidepath for organizations operating under upside-only arrangements, encouraging earlier participation in models that share both savings and losses.

CMS also retains the minimum beneficiary requirement of 5,000, but introduces more flexibility for handling benchmark years that fall below that threshold. It’s an adjustment designed to accommodate smaller or rural ACOs while maintaining the integrity of population size requirements. In addition, the agency is removing the health-equity adjustment from the ACO quality score beginning in Performance Year 2026, and making targeted updates to the APP Plus measure set to streamline evaluation and reduce redundancy.

Collectively, these revisions mark a tightening of the framework that governs shared-savings participation. ACOs will face heightened expectations to strengthen attribution processes, refine quality-measurement capabilities, and enhance data integration across participating entities. The message from CMS is clear: the path forward favors organizations that can quantify value, manage risk effectively, and demonstrate measurable coordination across care settings.

Final Thoughts The CY 2026 PFS Final Rule reinforces what CMS has been building toward for years: a system that rewards integration, precision, and accountability. While payment updates remain incremental, the underlying message is transformational. Success in 2026 and beyond will hinge on connected data, coordinated care, and readiness for value-based risk. Now is the time to refine digital infrastructure, streamline quality alignment, and strengthen interoperability to ensure that every measure reported tells a complete, verifiable story of value.

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