As we head into the fall and Congress returns from its summer recess, several issues affecting the federal budget and Medicare physician payments are coming to a head.
The clock is ticking to prevent a government shutdown
The Fiscal Year 2025 budget expires on September 30, 2025. Congress needs to pass a FY 2026 budget or a temporary measure, such as a stopgap bill or a Continuing Resolution (CR), to avoid a shutdown by the end of September. Final approval of any spending bill will require 60 votes in the Senate, meaning some Democrats must support it. A CR can pass with 51 votes in the Senate. Given this deeply divided Congress, bipartisan support will be difficult.
Generally, if it is a short-term government shutdown, Medicare claims are still processed. Other government functions may be paused or slowed down.
CBO estimates that ‘Big Beautiful Bill’ may trigger Medicare cuts in 2026
While President Trump’s new tax law, H.R. 1, did not directly impact Medicare, a recently released report from the Congressional Budget Office (CBO) concludes that the $3.4 trillion the law adds to the federal deficit may trigger the 2010 Pay-As-You-Go (PAYGO) law that forces across-the-board cuts to federal programs when the federal deficit increases. As a result, the CBO estimates that if PAYGO is triggered, Medicare could potentially see as much as $491 billion in cuts from 2027 to 2034.
In real terms, beginning January 1, 2026, Medicare claims could experience cuts up to 4%. This cut would be in addition to the existing 2% sequestration cuts currently applied to claims. Congress has the authority to waive PAYGO and has done so in the past. This time, it will require bipartisan compromise during a period of significant partisanship in Congress.
Congressional action is needed to extend telemedicine flexibilities
Without Congressional action, key telehealth flexibilities that have been in place since the COVID-19 pandemic will expire on September 30, 2025. The extension of these flexibilities was tied to the federal CR. These flexibilities allow patients to receive the service at home, rather than at an approved originating site, and permit the use of two-way audio-only technology when the provider can use live video, but the patient is unable or unwilling to do so. ACG continues to inform Congress about the importance of telemedicine and to to extend these important flexibilities.
Since the pandemic, the use of telemedicine in gastroenterology has increased dramatically. Telemedicine is often, but not strictly, used for patients with stable chronic digestive diseases (e.g., irritable bowel syndrome, gastroesophageal reflux). A 2023 telemedicine report found that gastroenterology was one of the top specialties reporting telemedicine use (third out of fifteen specialties).
Calendar Year 2026 payment rates will be released on or around November 1
The proposed rates for the CY 2026 Medicare Physician Fee Schedule, Hospital Outpatient, and Ambulatory Surgical Center (ASC) were released in mid-July. The GI Societies’ analysis of the proposed rules and payment rates is available here. Final payment rates for CY 2026 will be released on or around November 1. Several new CPT codes for GI services are scheduled for release in 2026: Percutaneous Electrical Nerve Field Stimulation (64X11), Endoscopic Sleeve Gastroplasty (4XX04), and Colon Motility Services (91XX1, 91XX2).
The proposed CY 2026 rates for GI services were a mixed bag. An increase is proposed for the Medicare conversion factor and office-based services, but cuts are proposed for professional payments for services provided in the ASC/hospital outpatient environment. CMS is also proposing a 2.5% cut across work RVUs for GI procedures. ACG is engaging with CMS and Congress to mitigate CY 2026 cuts to GI services.
Putting it all together
Your payment rates are subject to multiple adjustments, including budgetary adjustments such as sequestration and quality adjustments such as Merit-based Incentive Payment System (MIPS). CY 2026 could be especially complicated due to the agency’s proposals related to cutting rates for facility-based services and across-the-board cuts to work RVUs. The table below provides a snapshot comparison of the CY 2025 rates versus the proposed rates for CY 2026. As a reminder, CY 2026 rates are based on proposed policies for CY 2026, and rates will be finalized once the final rule is published, expected on or around November 1.
**Estimated rates based on currently information available and analysis of process – based on worst case scenario**
Scenario 1: 99213 (mid-level office visit)
Scenario 2: 43239 (EGD with biopsy)
* 2.5% cut to work RVUs does not apply to E/M CPT codes
** Maximum -9% Merit-based Incentive Payment System (MIPS) penalty, only if you fail to satisfactorily report MIPS measures
***Patient has met the deductible
**** CY 2026 non-qualified APM Medicare CF ($33.4209)
ACG would like to thank Sheila Madhani (Madhani Healthcare Consulting, LLC) for her contributions in drafting this article and example payment tables.