The billing changes practices are dealing with in 2026 come mostly from payers and regulators: new federal deadlines for prior authorization decisions, payers (including Original Medicare, in some states) using AI to review authorization requests, a Medicare Physician Fee Schedule with two conversion factors and an efficiency adjustment, and the usual code set updates. Each one changes a step in the billing process, so each has something a practice can check.
This guide reflects rules and announcements published by September 2026. The Medicare items apply to Medicare. Commercial payers set their own rules, and state laws vary, so check each payer's policies for the plans you bill.
1. Prior authorization decisions have federal deadlines
Under CMS's Interoperability and Prior Authorization final rule (CMS-0057-F), from January 1, 2026 Medicare Advantage organizations, state Medicaid and CHIP fee-for-service programs, Medicaid managed care plans and CHIP managed care entities must send prior authorization decisions within 72 hours for expedited requests and 7 calendar days for standard requests. (Qualified Health Plan issuers on the federally facilitated exchanges are covered by other parts of the rule but not these timeframes.) Impacted payers must also give a specific reason when they deny a request, and post prior authorization metrics on their websites each year. By January 1, 2027, they must offer a Prior Authorization API that lets providers' systems request authorization electronically. Drugs are excluded.
What to check: Track how long each payer takes to decide, and use the denial reason to fix the request instead of resubmitting it unchanged. Ask your practice management or EHR vendor how it will support the electronic prior authorization API in 2027.
2. Payers are using AI to review requests, including in Original Medicare
Prior authorization has long been a Medicare Advantage and commercial-plan issue. In 2026 it reached Original Medicare in some states. CMS's WISeR model runs from January 1, 2026 to December 31, 2031 in New Jersey, Ohio, Oklahoma, Texas, Arizona and Washington. Technology companies use AI and machine learning, with clinical review, to assess requests for a select list of services, such as skin and tissue substitutes, electrical nerve stimulator implants and knee arthroscopy for knee osteoarthritis. Providers can request prior authorization or have the claim reviewed after the service and before payment. CMS says every recommendation not to pay is made by a licensed clinician.
Practices are adopting AI tools of their own too. The AI in medical billing guide covers what those tools do, their limits and the HIPAA safeguards they need.
What to check: If you practice in a WISeR state, find out whether any of your services are on its list and decide how you'll handle requests. Make sure the documentation for those services meets the published coverage criteria.
3. Medicare physician payment changed in 2026
The CY 2026 Physician Fee Schedule final rule made several changes that affect what Medicare pays for the same code:
- Two conversion factors. As required by statute, from 2026 there is one conversion factor for qualifying alternative payment model participants and another, with a smaller update, for everyone else.
- An efficiency adjustment of −2.5% to the work RVUs (and the matching intraservice time) of non-time-based services. E/M services, care management, behavioral health, services on the Medicare telehealth list and maternity codes are exempt.
- Practice expense. CMS now recognizes greater indirect costs for practitioners in office-based settings than in facility settings.
- Skin substitutes used in a covered application procedure are paid as incident-to supplies rather than as separate biologicals.
Changes for 2027 are already proposed. The CY 2027 proposed rule, released July 14, 2026, includes a proposal to reduce payment when a separately identifiable office E/M visit is billed by the same physician on the same day as a procedure with a 0-, 10- or 90-day global period. Proposals can change before the final rule.
What to check: Load the 2026 Medicare rates for your locality from the Physician Fee Schedule look-up, and compare Medicare payments with them. If your commercial contracts are tied to a percentage of Medicare, check which year's rates each payer uses.
4. Telehealth and supervision rules moved
The CY 2026 final rule lets physicians provide direct supervision through real-time audio and video (not audio-only), and streamlines how services are added to the Medicare telehealth list. Some flexibilities are time-limited: rural health clinics and federally qualified health centers can bill for services furnished using telecommunications technology, including audio-only, through December 31, 2026. Check CMS's current guidance before billing a telehealth service.
What to check: Confirm the place of service and modifiers each payer requires for telehealth, and review how supervision is documented when it happens virtually.
5. Code sets keep changing on a schedule
- ICD-10-CM changed on October 1, 2026 (the FY 2027 code set, for October 1, 2026 to September 30, 2027), with updated official coding guidelines.
- NCCI edits change every quarter. CMS posts changes to its procedure-to-procedure edit files quarterly.
- CPT is maintained by the AMA's CPT Editorial Panel, which meets three times a year to consider new and revised codes.
What to check: Update code files, claim-scrubber edits and charge masters on each release date, and review the codes your practice bills most. The CO-97 guide explains why using the edit in force on the date of service matters.
6. Patients are owed clearer cost information
Uninsured and self-pay patients are generally entitled to a good faith estimate of expected charges when they schedule care at least 3 business days ahead, or when they ask for one. An estimate is due within 1 business day when the service is scheduled 3 to 9 business days ahead, and within 3 business days when it's scheduled 10 or more business days ahead or requested before scheduling. Patients need the estimate if they want to dispute a bill that turns out higher.
What to check: Make sure the front desk identifies self-pay patients, issues estimates on time and keeps a copy with the account.
What do these trends have in common?
Most of them move work to the front of the revenue cycle: authorizations, eligibility, estimates and documentation that has to be right before the claim goes out. A practice that checks those steps well is in a better position whichever way the rules move. The guide to why insurance claims get denied maps each denial reason to the step that prevents it.
If you'd like help working out which of these changes affect your claims, Highview's medical billing team can start with a free call.
Sources
- CMS, Interoperability and Prior Authorization Final Rule (CMS-0057-F) fact sheet: impacted payers, decision timeframes, denial reasons, metrics, Prior Authorization API.
- CMS, WISeR (Wasteful and Inappropriate Service Reduction) Model: dates, states, selected services, review process.
- CMS, CY 2026 Physician Fee Schedule final rule (CMS-1832-F) fact sheet: conversion factors, efficiency adjustment, practice expense, skin substitutes, telehealth and supervision.
- CMS, CY 2027 Physician Fee Schedule proposed rule fact sheet: proposals released July 14, 2026.
- CMS, ICD-10: FY 2027 code files, effective October 1, 2026.
- CMS, Medicare NCCI Procedure to Procedure (PTP) Edits: quarterly updates.
- AMA, CPT overview and code approval: the CPT Editorial Panel's meetings.
- CMS, Good faith estimates: who is entitled and when.
- CMS, Search the Physician Fee Schedule.