On January 1, 2026, a 2.5% positive adjustment to the conversion factor to mitigate the impact of Medicare cuts in 2026 went into effect. As a result, on average (based on the CMS’s final rule and inclusive of the CMS’s efficiency adjustment policy), pathologists received an average .34% increase in their Medicare reimbursement. Absent Congressional action, the 2.5% adjustment conversion factor adjustment will end on December 31, 2026. CAP continues to advocate for payment reform policies including full annual inflationary updates to the Medicare Physician Fee Schedule, modifications to the fee schedule’s budget neutrality requirement, and reforms to the Medicare Access and Chip Reauthorization Act’s physician quality programs. Until permanent reforms are enacted, the CAP is calling on Congress to pass legislation before the end of the year to ensure that the 2.5 percent conversion factor adjustment Congress passed in 2025 for 2026 continues in 2027, and beyond.
While the CAP has forecasted an average -2.4% decrease to pathology payments in 2027 compared, the estimated increase to physician practice costs is 2.5 percent. This is unsustainable. Over the last 11 years payments to pathologists have decreased by 11 percent. At the same time practice costs increased by nearly 27 percent.
While we continue to tell Congress that short-term fixes to Medicare’s payment system are still required, Congress must also provide a Medicare inflationary update to improve the financial stability in the physician fee schedule.
The lack of an annual inflationary update for pathologists, especially those that operate small businesses, compounds the wide range of shifting economic factors impacting the practice of pathology. The absence of an annual inflationary update, combined with the physician fee schedule’s statutory budget neutrality requirements and ongoing Medicare payment cuts, further compounds the difficulties pathologists face in managing resources to continue caring for patients in their communities.
The CAP remains committed to the fight against further cuts to pathology services. The financial instability of the Medicare payment system, including the lack of an inflationary update, ongoing Medicare cuts, and budget neutrality requirements, are all eroding our nation’s laboratory infrastructure.
Take Action to Stop the Cuts
Without significant engagement by CAP members with their respective members of Congress, getting this issue addressed before the end of the year is going to be a major challenge. The CAP has asked its members to contact their members of Congress on the Medicare cuts. Take action here.
Latest News on Medicare Cuts to Physicians
The CAP has urged Congress to provide further economic assistance to pathology practices by directly engaging with congressional leaders with their concerns regarding the instability of Medicare’s payment system.
- The Centers for Medicare & Medicaid Services (CMS) Has Released the Proposed 2027 Medicare Physician Fee Schedule (July 14, 2026)
- 2026 Medicare Pay Changes Congress Needs to Address (January 6, 2026)
- Pathologists Meet with Congress (April 23, 2024)
- Congress Passes Bill Giving Pathologists $19.1 Million in Additional Medicare Payment Relief through 2024 (March 12, 2024)
- CAP, AMA and Medical Organizations Call on Congress to Pass Legislation to Reverse Physician Medicare Cuts (January 16, 2024)
- Pathologists Urge Congress to Mitigate Medicare Cuts at CAP ‘Virtual Fly-In’ (October 31, 2023)