November 3, 2025
Contact: Jenifer Callahan, APG Chief of Staff
Tel: 202-867-6032
WASHINGTON — America’s Physician Groups, the leading organization representing U.S. physicians engaged in value-based care models, welcomes key aspects of the final 2026 Medicare Physician Fee Schedule rule that will advance accountability for costs and quality in the traditional Medicare program, as follows:
- The finalized proposal to pay for skin substitutes as “incident-to” supplies, rather than as biological products, is essential to allow Medicare accountable care organizations and other total costs of care models, such as Kidney Care Choices, to meet their accountability benchmarks and deter massive waste, fraud, and abuse in the use of skin substitutes.
- The updated payments for clinicians engaged in Advanced Alternative Payment models of 3.77 percent, versus 3.26 percent for others, are welcome after years of payment cuts. However, even this update will not make up for years of cuts, and APG will continue to advocate for linking the fee schedule permanently to the Medicare Economic Index to adjust for rising practice costs.
- The final change in ownership (CHOW) flexibility that allows an ACO participating organization to update its participant information during a given performance year is a necessary change given marketplace dynamics that can result in sales of ACOs from one organization or another.
- The final change in flexibility that allows ACOs with fewer than the required 5000 assigned beneficiaries to continue to participate in the models, with restrictions on the tracks in which they can participate, is necessary to allow smaller ACOs to remain in the programs. Often, the smaller ACOs are physician-led ACOs organizations that need time to succeed and grow.
- The 2.5 percent efficiency adjustment reduction that the final rule applies to certain medical services is appropriate, given advances in technology and other factors that have reduced the work effort required to perform them. Services that require more cognitive effort and are less subject to productivity gains, such as evaluation and management visits, have appropriately.
APG notes that all these changes are consistent with an effort to spur greater accountability for costs and quality in traditional Medicare, as it recommended in its report – Medicare Done Right: Prescriptions for Success – released earlier this year. APG looks forward to continuing to work with the Centers for Medicare & Medicaid Services to effectuate more positive changes in the traditional Medicare program.
About America’s Physician Groups
APG’s approximately 340 physician groups comprise 260,000 physicians and other clinicians providing care to nearly 90 million patients, including an estimated 1 in 4 Americans and 1 in 3 Medicare Advantage enrollees. APG’s motto, ‘Taking Responsibility for America’s Health,’ represents our members’ commitment to clinically integrated, coordinated, value-based health care in which physician groups are accountable for the costs and quality of patient care. Visit us at www.apg.org.
