The 2026 Medicare Physician Fee Schedule represents a pivotal shift in oncology reimbursement dynamics. For the first time in several years, conversion factors are increasing—a development that signals potential relief for physician practices. However, radiation oncology and nuclear medicine practices face a more complex financial reality that demands careful analysis and strategic response. As practices evaluate Medicare reimbursement changes for oncology in 2026, understanding both the conversion factor improvements and specialty-specific adjustments is essential for accurate financial planning.
For oncology practices, the Center for Medicare and Medicaid Services estimates an overall -1% impact on radiation oncology and nuclear medicine due to Relative Value Unit efficiency adjustments included in the 2026 MPFS.
What does that mean for your practice?
Below, you’ll find an overview of the 2026 MPFS changes, how they affect oncology practices, and practical next steps for oncology and nuclear medicine practices looking to make the most of these adjustments.
Conversion Factor Updates
Understanding 2026 Medicare Reimbursement for Oncology Practices
The proposed Conversion Factors for 2026 are:
- For non-qualifying APM participants: 33.4209 (a 3.3% increase from 2025)
- For qualifying APM participants: 33.5875 (a 3.8% increase from 2025)
These changes reflect a 2.5% temporary increase from Congress as part of the One Big Beautiful Bill Act, and statutory increases of 0.25% for non-qualifying participants and 0.75% for qualifying participants. This is the first positive Medicare Conversion Factor update in several years.
Impact on Oncology: The -1% Reality
Despite the CF increase, the Center for Medicare and Medicaid Services estimates an overall 1% decrease in compensation for radiation oncology and nuclear medicine as a result of the 2026 MPFS changes. This is due to a combination of factors, but particularly adjustments to expense methodology, efficiency adjustments, and site-neutral payment policies.
So while, as the Community Oncology Alliance notes, while the changes go a long way to prevent the ongoing closures of oncology clinics and shift into hospital settings, the result is an overall negative impact on reimbursement compensation for oncology and nuclear medicine clinics.
Understanding the practical implications requires translating these percentage changes into real financial impact. Consider a medium-sized radiation oncology practice generating $2.5 million annually in Medicare radiation therapy revenue:
- The 3.62% conversion factor increase alone would yield approximately $90,500 in additional revenue
- However, the -1% specialty-specific impact reduces this gain by $25,000
- Net result: approximately $65,500 increase—a 2.62% effective gain rather than the headline 3.62%
For practices heavily reliant on procedure codes subject to efficiency adjustments, the impact becomes more pronounced. A practice deriving 60% of revenue from affected codes could see effective reimbursement increases of less than 2%, while administrative and operational costs continue rising at 3-4% annually. This creates a narrowing margin that requires proactive financial management and operational optimization.
Key Methodological Change: Hospital Outpatient Data
The Center for Medicare and Medicaid Services has proposed to use hospital outpatient data for some services, including radiation oncology services, via data from the Medicare Outpatient Prospective Payment System, moving away from using limited-scale survey data.
The intention behind this methodological change is to increase price transparency and rate predictability by using large-scale data to inform costs for technical services. This comes as a response to years of concerns that CMS was operating on faulty, small-scale, or outdated data, resulting in unstable prices for the same services.
This shift to OPPS data, while supported by the American Society for Radiation Oncology as a move to increase stability in radiation oncology billing, comes with coding structure changes that may affect reimbursement for some radiation therapy services. ASTRO has suggested adjustments to the methodology used by CMS to calculate reimbursements using this data to ensure associated costs of providing this care are correctly accounted for.
The shift to OPPS data methodology carries both opportunities and risks for radiation oncology practices. Radiation oncology Medicare rates will now be calculated using large-scale hospital outpatient data rather than limited surveys, potentially introducing both greater stability and near-term volatility as the methodology transitions.
Practices should conduct code-level analysis to identify which specific radiation therapy services experience the most significant rate adjustments under the new methodology. This granular understanding enables strategic responses, including:
- Service mix optimization to emphasize higher-margin procedures
- Renegotiation of commercial payer contracts based on Medicare rate changes
- Investment in technology or workflow improvements for services with compressed margins
- Development of alternative revenue streams in areas less affected by the methodology change
The ASTRO position advocating for methodology refinements suggests that further adjustments may occur before final implementation, making ongoing monitoring essential for strategic planning.
Efficiency Adjustments and New Considerations
Medicare’s 2026 efficiency adjustment amounts to a 2.5% decrease in RVUs for non-time-based codes, in theory because these codes represent services which heavily involve technology and these services are increasingly efficient. In practice, this efficiency adjustment applies to a majority of physician services, but in particular oncology and radiology procedures where technology is inherently a major component.
These changes therefore result in decreased compensation overall for oncology and radiology clinics providing Medicare services. The American Medical Association estimates that this new adjustment will affect 37% of oncologists with cuts of 10%-20%.
There is also an efficiency adjustment in practice-expense RVUs, devaluing compensation for physician services provided outside a hospital setting. These decreases in compensation based on perceived efficiency are not supported by data and don’t take into account the overhead associated with providing these services.
Overall, these efficiency adjustments do not reflect the practical and financial difficulties of providing this care. The AMA also predicts that potential long-term implications of decreased reimbursement for these Medicare services, especially given the CMS directive to continue RVU cuts over the next several years, will result in longer wait times, decreased access to services, and threatened private practices for the physicians affected.
Develop a Comprehensive Financial Response Strategy
The 2026 MPFS changes require immediate action combined with longer-term strategic planning. Practices should implement a structured approach addressing both short-term adaptation and sustainable positioning.
Immediate Actions (Q4 2025)
Conduct code-level financial impact analysis
- Model 2026 reimbursement changes across your specific CPT code mix
- Identify procedures experiencing the greatest margin compression
- Quantify total practice financial impact with multiple scenarios (optimistic, expected, pessimistic)
Engage with advocacy organizations
- Monitor ASTRO, AMA, and COA recommendations and comment periods
- Contribute practice-specific impact data to support advocacy efforts
- Track potential rule modifications before final implementation
Review operational efficiency opportunities
- Benchmark current operational metrics against industry standards
- Identify immediate cost reduction opportunities that don’t compromise care quality
- Assess technology utilization and workflow optimization potential
Strategic Planning (Q1-Q2 2026)
Evaluate service line profitability under new reimbursement
- Conduct margin analysis for each radiation therapy service line
- Determine which services require operational transformation to remain viable
- Consider strategic emphasis shifts toward higher-margin services
Assess Advanced Practice Provider integration opportunities
- Model financial impact of APP utilization for routine follow-up and care coordination
- Calculate potential physician time optimization and capacity expansion
- Develop implementation timeline if APP integration supports margin goals
Explore technology investments with efficiency ROI
- Evaluate automation opportunities in treatment planning and delivery
- Assess patient communication and care coordination technology
- Analyze whether efficiency improvements can offset reimbursement compression
Review payer contract portfolio
- Assess Medicare percentage of total revenue
- Evaluate commercial payer contract opportunities
- Consider whether alternative payment models offer strategic advantages
Partnership and Expert Support
While the 2026 MPFS conversion factor increases represent welcome policy reversal, the net impact for radiation oncology requires sophisticated financial analysis and strategic response. Practices that conduct thorough impact assessments, implement targeted operational improvements, and leverage expert guidance will successfully navigate these changes while maintaining high-quality patient care and financial sustainability.
Contact us today to schedule your 2026 MPFS impact assessment. Oncology Practice Solutions will help you understand exactly how these changes affect your practice and develop a customized strategy to optimize your financial performance under the new reimbursement framework.