CMS final rule modernizes payment accuracy, cuts spending waste 

WASHINGTON – The Centers for Medicare & Medicaid Services (CMS) says its calendar year (CY) 2026 Medicare Physician Fee Schedule (PFS) final rule reduces waste and unnecessary use of skin substitutes and introduces a new payment model focused on improving care for chronic disease management. 

“CMS is working to strengthen and transform Medicare for the current and future generations while cracking down on waste and abuse that drives up costs,” said CMS Administrator Dr. Mehmet Oz. “The actions we are taking will improve seniors’ access to high-quality, preventive care that will help them to live longer, healthier lives.”  

Reducing Medicare spending waste for skin substitutes  

CMS currently treats skin substitutes as biologicals for the purposes of Medicare payment. In the CY 2026 PFS final rule, CMS will pay for skin substitutes under the PFS as incident-to supplies, a change expected to reduce Medicare spending on these products by nearly 90% without compromising patient access or quality of care. We estimate this action will reduce gross fee-for-service program spending for skin substitute services by $19.6 billion in 2026, while incentivizing the use of products with the most clinical evidence of success.  

Shifting health care paradigm to prevention, wellness 

CMS is aligning with Health and Human Services Secretary Robert F. Kennedy Jr.’s Make America Healthy Again agenda by repurposing a previous risk assessment code to focus on essential patient behaviors to reduce chronic disease and improve health – physical activity and nutrition. CMS is also improving the care of chronic diseases by ensuring advanced primary care management services are able to integrate behavioral health. Finally, the agency is shifting its focus in quality measurement towards prevention-focused measures by introducing five new outcomes measures focused on the prevention of chronic disease, while simultaneously working to reduce unnecessary burden in quality reporting by removing 10 quality measures that did not directly improve patient health outcomes. 

CMS is also finalizing changes to the Medicare Diabetes Prevention Program to allow more people with Medicare to access coaching, peer support, and practical training in dietary change, physical activity, and behavior change strategies to delay or prevent the onset of Type 2 diabetes for people with prediabetes, at no cost to the beneficiary. 

• For a fact sheet on the CY 2026 Physician Fee Schedule final rule, visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f. 
• For a fact sheet on the Medicare Shared Savings Program changes in the CY 2026 PFS final rule, visit: https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2026-medicare-physician-fee-schedule-final-rule-cms-1832-f-medicare-shared-savings.  
• To view the Ambulatory Specialty Model (ASM), visit: https://www.cms.gov/priorities/innovation/innovation-models/asm.  
• To view the CY 2026 PFS final rule, visit: https://www.federalregister.gov/d/2025-19787.