H.R. 8163 — Provider Reimbursement Stability Act of 2026

This section revises the budget neutrality de minimis threshold under the Medicare physician fee schedule (PFS), which exempts conversion factor adjustments otherwise required to offset estimated PFS expenditure increases from relative value unit (RVU) revisions if those increases are below the threshold (previously a flat $20 million). Specifically, it (1) maintains the threshold at $20 million for years before 2027, (2) increases it to $54.3 million for 2027, (3) sets it for 2028 and subsequent years at the prior year's amount, and (4) indexes it every fifth year beginning in 2032 by the cumulative percentage increase in the Medicare Economic Index applicable to physicians' services over the prior five years.

This section amends the budget neutrality requirements applicable to the Medicare physician fee schedule (PFS) (i.e., payments to physicians and other practitioners under Medicare Part B) as follows: (1) effective for years beginning with 2027, it requires the Secretary, in the final PFS rule for the second year after a given year (the assumption correction period), to adjust the PFS conversion factor if the difference between estimated and actual utilization expenditures for a specified service exceeds the threshold amount of 0.1 percent of total estimated PFS expenditures for that year, where a specified service is one for which payment was bundled into another service in the prior year but furnished as a separate or add-on payment in the year and had expected expenditures exceeding that threshold based on estimated utilization; and (2) it excludes such conversion factor adjustments from triggering further budget neutrality adjustments under the PFS target spending percentage.

This section requires the Secretary, at least once every five years, to simultaneously update on a category-wide basis the prices and rates for direct cost inputs—clinical staff wage rates, prices of medical supplies, prices of equipment, and other categories used in the Medicare physician fee schedule methodology for calculating practice expense relative value units (RVUs) for physicians' services. Updates must occur in the same year for all categories after consulting relevant stakeholders, including physician specialty societies. (As background, practice expense RVUs account for approximately 50% of total RVUs under the physician fee schedule and cover non-physician costs such as staff, supplies, and equipment.)

This section establishes a limitation on budget neutrality adjustments to the conversion factor used in the Medicare Physician Fee Schedule (MPFS), which sets payments for physicians' services under Medicare Part B. Beginning with 2027, the adjustment may not cause the conversion factor—prior to other adjustments under subsection (d)—to vary by more than 2.5% from the prior year's factor. (Thus, the overall budget neutrality requirement continues to apply, but large swings in the conversion factor from such adjustments are capped.)