H.R. 8163

Provider Reimbursement Stability Act of 2026

Sponsor: Gregory F. Murphy

89 cosponsors
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Official summary

Written by the Congressional Research Service.

Provider Reimbursement Stability Act of 2026

This bill allows for larger annual adjustments to the Medicare physician fee schedule. It also requires the Centers for Medicare & Medicaid Services (CMS) to make certain corrections to compensate for expenditures under the fee schedule that exceed a certain amount in a given year, and it limits how much certain adjustment factors may vary each year.

Current law prohibits annual adjustments to the Medicare physician fee schedule that would result in a more than $20 million difference between the adjusted amount and the non-adjusted amount of total expenditures. The bill increases this threshold to $54.3 million beginning in 2027, with adjustments for inflation every five years beginning in 2032.

Additionally, for certain services, the bill requires the CMS to determine the difference between expenditures based on estimated utilization of the service and expenditures based on actual utilization. If this difference exceeds a certain percentage of total expenditures under the fee schedule, the CMS must reconcile this difference by adjusting payments for the following year. This requirement applies to services for which payment was bundled with another service and there was a separate or add-on payment during the previous year.

Finally, the CMS must update the prices and rates of each category of direct costs that affect payments (e.g., prices of equipment) at least every five years, with updates made to each category in the same year. The bill also prohibits the CMS from varying a certain adjustment factor by more than 2.5% each year.

Text of the bill

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Sec. 1. Short title

This Act may be cited as the Provider Reimbursement Stability Act of 2026.

Sec. 2. Updating the budget neutrality threshold

Section 1848(c)(2)(B)(ii)(II) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)(ii)(II)) is amended—

(1) by striking Subject to and inserting the following:

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(aa) In general. Subject to

(2) in item (aa), as inserted by paragraph (1), by striking $20,000,000 and inserting the amount specified in item (bb) for such year; and

(3) by adding at the end the following new items:

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(bb) Amount specified. For purposes of item (aa), subject to item (cc), the amount specified in this item is—

(AA) for years before 2027, $20,000,000;

(BB) for 2027, $54,300,000; and

(CC) for 2028 and each subsequent year, the amount specified in this item for the preceding year.

(cc) Indexing limitation on annual adjustments. For 2032 and every subsequent fifth year, the Secretary shall increase the amount specified in item (bb) for such year by the cumulative percentage increase in the MEI (as defined in section 1842(i)(3)) applicable to physicians’ services for each year occurring during the 5-year period ending on the last day of the preceding year.

Sec. 3. Budget neutrality corrections relating to estimated utilization

(a) In general. Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended by adding at the end the following new clause:

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(vii) Budget neutrality corrections relating to estimated utilization

(I) In general. In the case of a budget neutrality adjustment applied pursuant to clause (ii)(II) for a year (beginning with 2027) that is determined in part using estimated utilization (as defined in subclause (II)(bb)) with respect to a specified service (as defined in subclause (II)(cc)), the Secretary shall, as part of the final rule establishing the physician fee schedule under this section for the assumption correction period (as defined in subclause (II)(aa)) with respect to such year—

(aa) determine the difference between expenditures for such service in such year using estimated utilization and actual utilization for such service (in a manner determined appropriate by the Secretary); and

(bb) in the case that the Secretary determines the difference described in item (aa) is greater than the threshold amount (as defined in subclause (II)(dd)) for such year, adjust the conversion factor under this section for such assumption correction period by such amount to reconcile such difference (which may be positive or negative), as determined by the Secretary.

(II) Definitions. For purposes of this clause:

(aa) Assumption correction period. The term assumption correction period means, with respect to a year, the second year beginning after such year.

(bb) Estimated utilization. The term estimated utilization means an estimate of utilization used for purposes of applying clause (ii)(II).

(cc) Specified service. The term specified service means, with respect to a year, a service—

(AA) with expected expenditures for such year under this part based on estimated utilization that exceed the threshold amount (as defined in item (dd)) for such year; and

(BB) for which payment had been bundled into payment for another service during the preceding year and for which a separate payment or add-on payment is made during such year.

(dd) Threshold amount. The term threshold amount means, with respect to a year, 0.1 percent of the total estimated expenditures under this part for services furnished under this section during such year.

(b) Nonapplication of budget neutrality to reconciliation adjustments. Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)) is amended—

(1) in clause (iv)—

(A) in subclause (V), by striking and at the end;

(B) in subclause (VI), by striking the period and inserting ; and; and

(C) by adding at the end the following new subclause:

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(VII) clause (vii)(I)(bb) for an assumption correction period (as defined in clause (vii)(II)) shall not be taken into account in applying clause (ii)(II) with respect to such period.

; and

(2) in clause (v), by adding at the end the following new subclause:

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(XII) Reductions attributable to an assumption correction. For an assumption correction period (as defined in clause (vii)(II)), reduced expenditures attributable to application of clause (vii)(I)(bb) with respect to such period.

Sec. 4. Timely updates to direct costs used to calculate practice expense RVUs

Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)), as amended by section 3, is further amended by adding at the end the following new clause:

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(viii) Timely updates to direct costs used to calculate practice expense relative value units

(I) Simultaneous updates to direct cost inputs at least once every 5 years. The Secretary shall, not less often than every 5 years, update the prices and rates, as applicable, on a category-wide basis for each of the categories of direct cost inputs described in subclause (II) used in the methodology for calculating the practice expense relative value units under this subsection for physicians’ services. Updates made pursuant to the previous sentence shall be made in the same year for all categories of direct cost inputs described in such subclause.

(II) Direct cost inputs categories described. For purposes of this clause, the categories of direct cost inputs described in this subclause are clinical staff wage rates, prices of medical supplies, prices of equipment, and any other category of such inputs used in the methodology described in subclause (I) (as specified by the Secretary).

(III) Consultation. In making the updates under this clause, the Secretary shall consult with relevant stakeholders, including physician specialty societies.

Sec. 5. Limitation on year-to-year conversion factor variance

Section 1848(c)(2)(B) of the Social Security Act (42 U.S.C. 1395w–4(c)(2)(B)), as amended by sections 3 and 4, is further amended by adding at the end the following new clause:

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(ix) Limitation on conversion factor variance

(I) In general. Beginning with 2027, the Secretary may not, for purposes of complying with clause (ii)(II), apply a budget neutrality adjustment to a conversion factor established under subsection (d) for such year that would cause such factor, not taking into account any adjustment to such factor for such year provided under such subsection, to vary by more than 2.5 percent compared to such factor so established for the preceding year.

(II) Continued applicability of budget neutrality requirement. Nothing in subclause (I) may be construed to alter the requirement described in clause (ii)(II).