2026 Medicare Physician Fee Schedule: Radiation Oncology

The 2026 Medicare physician fee schedule radiation oncology practices are billing under this year raised the conversion factor for the first time in several years and still left many freestanding centers worse off. That is because the final rule (CMS-1832-F, released October 31, 2025 and published in the Federal Register on November 5, 2025) did four things at once: it split the conversion factor in two, cut work RVUs on procedural codes by 2.5 percent, halved the indirect practice expense allocated to facility-setting services, and started pricing radiation treatment delivery from hospital outpatient cost data in the same year the delivery codes themselves were rebuilt. A biller does not need to model all of that, but needs to know which change affected each line on the remit.

If the allowed amounts on your 2026 remits did not match what you expected from the headline increase, this is why.

Two conversion factors

For 2026 there are two conversion factors, and which one applies depends on whether the billing clinician was a Qualifying APM Participant (QP) for the year.

	2025	2026	Change
Clinicians in a qualifying advanced APM (QP)	$32.35	$33.57	+$1.22 (+3.77%)
All other clinicians	$32.35	$33.40	+$1.05 (+3.26%)

CMS built the increase from a one-year statutory 2.50 percent increase for 2026, the standard updates of 0.75 percent (QP) and 0.25 percent (non-QP), and an estimated 0.49 percent adjustment for finalized work RVU changes. Every 1.00 RVU is therefore worth $33.57 to a QP and $33.40 to everyone else, a 17-cent gap per RVU that appears on every line of a QP’s claims. Most radiation oncology practices will see $33.40.

Two things to remember when you project 2026 payment from the allowed amount: Medicare pays 80 percent after the beneficiary’s coinsurance, and the 2 percent sequestration reduction that has applied since 2013 remains in effect for 2026. A separate 4 percent statutory PAYGO sequestration that would have started in January 2026 was waived by Congress in H.R. 5371 on November 12, 2025.

The efficiency adjustment

CMS finalized a negative 2.5 percent “efficiency adjustment” to the work RVUs and intraservice time of nearly all non-time-based services, which includes procedures, radiology, diagnostic tests and the radiation oncology 77xxx codes. Time-based services are exempt: evaluation and management visits, care management, behavioral health, services on the Medicare telehealth list, and maternity codes with a global period. CMS derived the figure from the productivity adjustment embedded in the Medicare Economic Index over a five-year look-back, and the American Society of Hematology’s summary of the rule reports CMS will update it every three years.

For a radiation oncology practice this means the work RVU on a procedural code can fall even in a year when the code’s total payment rose. CPT 77387 is the visible example: its surveyed work RVU of 0.70 became 0.68 in the final rule after the adjustment. Payers that build their own fee schedules from Medicare RVUs will carry that reduction forward.

Practice expense: the facility cut and the hospital data

Two practice expense policies matter here.

Facility indirect PE. For services valued in the facility setting, the portion of indirect practice expense allocated on the basis of work RVUs is now half the nonfacility amount, effective 2026 with no phase-in. ACRO estimates this change raised payment for non-delivery radiation oncology codes (planning, management, physics) by about 5.2 percent, which partly offsets what happened to delivery.

OPPS cost data for radiation treatment services. CMS finalized using hospital outpatient (OPPS) data to set relative rates and cost assumptions for radiation treatment services paid under the fee schedule, rather than the practice expense inputs that normally come through the AMA RUC process. In practice this ties the technical payment a freestanding center receives for 77402, 77407 and 77412 to where those codes sit in the hospital APC structure. ACRO objected that the initial APC placements were too low; its estimate is that the 2026 cut to treatment delivery narrowed from about 10 percent in the proposed rule to about 3.8 percent in the final rule after CMS adjusted the placements.

That linkage is why freestanding billers now need to read the hospital rule. The 2026 OPPS final rule (CMS-1834-FC, released November 21, 2025, published November 25, 2025) set a 2.6 percent update, built from a 3.3 percent market basket less a 0.7 point productivity adjustment, for a conversion factor of $91.415 ($89.632 for hospitals that fail quality reporting). It also deleted the G6001 to G6017 series that nonexcepted off-campus provider-based departments used to bill with modifier PN; those departments now bill 77402, 77407 and 77412 with PN and are paid the fee schedule technical rate.

What the impact tables said, and what happened

The ACR’s reading of the final rule put radiation oncology at an estimated negative 1 percent for 2026, the same order as diagnostic radiology (negative 2 percent) and nuclear medicine (negative 1 percent). ACRO’s statement of November 6, 2025 called the final rule an improvement over the proposal while saying the efficiency adjustment should still be reversed.

The specialty-level number does not show how the change falls across codes. CMS valued the new delivery codes expecting roughly 35 percent of external beam delivery to land on Level 3 (77412), with the rest on 77407. A practice whose courses land mostly on 77407 will see delivery revenue for a prostate IMRT course fall against the 2025 IMRT codes even though the fee schedule percentage is roughly flat. The conversion factor and the code mix are separate effects. Check the code mix first when the 2026 remittances arrive.

Worked example: following a 20-fraction course through the rule

A freestanding center treats a single-isocenter IMRT prostate course, 20 fractions, under 2026 rules.

Line	Units	Which 2026 policy sets the price
77407 treatment delivery	20	Technical component priced from OPPS cost data; professional work RVU reduced 2.5 percent
77387-26 image guidance, professional	20	Work RVU 0.68 after the efficiency adjustment; no technical line exists
77427 weekly management	4	Work RVU reduced 2.5 percent; priced in the facility or nonfacility setting as billed
77301 IMRT planning, 77300 and 77334 dosimetry and devices	per course	Work RVU reduced 2.5 percent; nonfacility PE benefits from the indirect PE change

Multiply each line’s RVUs by the geographic adjustment and by $33.40 (or $33.57 for a QP), take 80 percent, then subtract 2 percent for sequestration. The planning and management lines likely came out ahead of 2025; the 20 delivery lines, now on a code that does not say IMRT and is priced from hospital data, are where the course lost payment.

What to do now

Confirm QP status for every billing clinician before you set expected allowed amounts, since the two conversion factors differ on every line.
Rebuild your Medicare expected-payment table from the 2026 RVU file, not by applying a percentage to 2025 rates. The efficiency adjustment and the PE changes moved codes in different directions.
Compare 2026 allowed amounts for 77301, 77427 and 77387-26 against your contracts with payers that pay a percentage of Medicare; several will have repriced from the new RVUs.
Separate the delivery-code loss from the fee schedule in any report to leadership. The 77407 versus 77412 mix is a documentation and coding question; the conversion factor is not.
Count fractions against the plan. Iridium Suite’s CodePath feature maps a course’s expected encounters and codes to the patient’s plan, which is how a billing team can confirm that every fraction produced a 77407 or 77412 line and a 77387-26 line; see CodePath.
Watch the 2027 proposed rule in July. The 2.5 percent statutory increase applies to 2026 only, so the conversion factor is likely to fall again for 2027 unless Congress acts.

What the 2026 Medicare physician fee schedule means for radiation oncology billing