The Medicare fee schedule, decoded

The number that sets every Medicare payment fell five years straight. In 2026 it finally reversed, and behavioral health got the largest carve-out. Here is what your rates actually are now, and the one exception to watch.

A psychiatric mental health nurse practitioner (PMHNP) in Nashville runs 20 medication management visits a day on a Medicare panel. In early 2026, a colleague mentioned her reimbursements looked better. She pulled her explanation of benefits (EOB) documents going back to 2020 and did the math herself. They had been quietly shrinking for five years. And then, this year, they weren't.

Here is what she found. The Medicare conversion factor (CF) is a single dollar multiplier that the Centers for Medicare and Medicaid Services (CMS) applies to every code in the Medicare Physician Fee Schedule (MPFS). Every Current Procedural Terminology (CPT) code carries a work relative value unit (RVU) count; multiply that by the CF and you get the payment rate. When the CF falls, every code's payment falls with it, no notice, no negotiation, no appeal.

From 2020 to 2025 the CF dropped from $36.09 to $32.35: a 10.4% nominal cut over five years. Against practice cost inflation running 20% to 30% over the same stretch, the real purchasing power fell considerably faster than that number suggests.

The 2021 drop of -3.32% was the worst single year. It came from budget-neutrality rules: CMS raised evaluation and management (E/M) code payments that year, and the budget-neutrality mechanism required offsetting cuts everywhere else, including the CF itself. Congress passed partial patches in 2022 and 2024, but each fix expired, and each expiration pushed the rate back down.

2026 broke the streak. The CY 2026 MPFS final rule (CMS-1832-F) set the conversion factor at $33.40 for non-qualified payment program (non-QPP) providers, a 3.26% increase over 2025. For behavioral health (BH) practices, the gain is compounded. CMS applied a -2.5% efficiency adjustment to roughly 7,700 non-time-based codes across the fee schedule, then explicitly exempted behavioral health services, E/M codes, care management codes, Medicare telehealth services, and maternity codes from that cut.

In numbers: CPT code 90837 (individual psychotherapy, 60 minutes) moved from $154.29 in 2025 to approximately $167.00 in 2026. CPT code 90791 (psychiatric diagnostic evaluation) moved from $166.91 toward approximately $173. For the Nashville PMHNP with a full Medicare panel, that is the first meaningful rate increase in four years.

One exception worth flagging before you declare 2026 a win: four neuropsychological and developmental testing codes (96132, 96112, 96170, 96171) received payment decreases through a separate practice-expense methodology change. If those codes are a significant share of your billing, model the net impact before assuming the overall direction holds for you.

The PMHNP who caught the five-year erosion by pulling her own EOBs will catch the next shift for the same reason: she checks the number. The practices that don't will collect the higher rate without understanding why it moved, which means they won't know when it moves again.