Authors: Aaron Starr Jon Delaney
Beginning January 1, 2026, the Centers for Medicare & Medicaid Services (CMS) is implementing an efficiency adjustment for service reimbursement by reducing the work relative value units (wRVUs) and adjusting the intraservice physician time for most non-time-based services.1
The agency has recalibrated the efficiency adjustment to account for efficiencies gained as medical procedures become more common and as providers gain experience and use more advanced technology.
For years, CMS hasn't reviewed or revalued most non-time-based service codes, leading to over-crediting wRVUs for many Current Procedural Terminology (CPT®) codes that fail to account for efficiency improvements. To ensure wRVU credit remains aligned with the time, effort and advancements in care, CMS plans to implement an efficiency adjustment every three years, beginning with an initial adjustment of 2.5% on January 1, 2026.
Efficiency adjustments to exclude time-based services
Efficiency adjustments won't apply to time-based services, including evaluation and management (E/M) services, care management services, behavioral health services, services on the Medicare telehealth list and maternity codes with a global period of multiple months.2
To understand the impact of the efficiency credit on a specialty basis, our provider compensation team analyzed the impact of efficiency adjustments on wRVUs across a variety of specialties.
We compared total wRVUs on the 2025 Physician Fee Schedule (pre-efficiency adjustment) to adjusted total wRVUs reflecting the CMS 2026 Physician Fee Schedule, inclusive of all efficiency credit adjustments. To evaluate the impact at a specialty level, our analysts used the Medical Group Management Association (MGMA) 2025 Procedural Profile database to identify the CPT codes and their associated volumes billed across each clinical specialty.
The following table summarizes the results, showing the percentage change in wRVUs across seven specialties to highlight the varying impact from the proposed efficiency adjustment.
| Estimated percentage change in wRVUs by specialty | |
| Specialty | Percent Change in wRVUs |
| Cardiology: Invasive-Interventional | -1.5% |
| Cardiology: Noninvasive | -0.9% |
| Endocrinology/Metabolism | -0.1% |
| Family Practice (Without OB) | -0.1% |
| Neurology | -0.6% |
| Orthopedic Surgery: General | -1.8% |
| Surgery: Neurological | -2.1% |
Procedurally focused specialties (Cardiology: Invasive-Interventional; Orthopedic Surgery: General; and Surgery: Neurological) experience larger reductions in wRVUs. In contrast, efficiency adjustments will minimally impact fewer procedural specialties (Endocrinology/Metabolism and Family Practice without OB).
The decrease in wRVUs presents a challenge for provider compensation, especially for procedure-based specialties paid under productivity-based models. As such, we make the following three recommendations.
Assess your compensation frameworks
Assess your organization's existing provider compensation frameworks to understand potential implications of the projected wRVU reductions. Given the anticipated reduction in wRVUs, providers paid under production-based compensation models may experience a drop in cash compensation.
While the efficiency adjustments are modest, the actual impact to compensation can be meaningful for providers. At Gallagher, we consider it important to recalibrate organizational expectations and potentially adjust wRVU thresholds/targets as appropriate.
Plan as needed for budget adjustments
Your organization may need to make budget adjustments in 2026 and beyond to account for the potential need to increase provider compensation rates to offset reductions in wRVUs. Additionally, the reduction in wRVUs directly affects professional reimbursement, which may cause financial pressure on organizations that depend heavily on procedure-based specialties and/or where Medicare represents a sizable portion of their payer mix.
Take this opportunity to evaluate your payer mix to determine the exact impact to reimbursement, ensure financial sustainability and identify areas of vulnerability to plan proactively for revenue adjustments.
This change aligns with a larger CMS goal to transition compensation from specialists to primary care providers to incent the long-term care of patients. This compensation transition has created ongoing contention as primary care has benefited from increased wRVUs to E/M codes in 2021 and 2023, and add-on G-Codes in 2024. Procedure-based specialties, on the other hand, received limited to no benefit, with continued decrease in conversion factor as a result of increased wRVUs.
Gain fresh data: Participate in Gallagher's 2026 Physician Compensation and Production Survey
Our provider compensation team will incorporate questions related to CMS efficiency adjustments into our 2026 Physician Compensation and Production Survey. Participate now and receive a complimentary PDF and Excel copy of the survey report.
Gallagher's Physician Compensation and Valuation team is equipped to help your organization navigate physician and Advanced Practice Provider market trends related to efficiency credits. Let our industry-leading data help to drive your decisions to face the future with confidence.
