Medicare Payment Increase in Final Budget Reconciliation Bill

This article was updated July 9.

The House of Representatives voted July 3, to pass the Senate version of H.R. 1 (One Big Beautiful Bill Act) and the president signed it into law July 4. The law includes a 2.5% increase to the Medicare Physician Fee Schedule for calendar year 2026. However, it does not include previously House-passed language tying Medicare updates to the Medicare Economic Index. Furthermore, despite objections from both sides of the aisle, the law contains significant Medicaid reductions.

“The inclusion of an updated Medicare Physician Fee Schedule conversion factor in this bill is a step forward,” said Cindy R. Moran, American College of Radiology® Executive Vice President of Government Relations and Health Policy. “We look forward to working with CMS, regulators, lawmakers and other stakeholders to arrive at a sensible long-term physician payment plan that supports practices’ ability to continue to provide care in their communities and enables greater patient access to lifesaving care.”

The law also imposes significant changes to federal student loans, including lifetime loan limits for borrowers, impacting students pursuing higher education. Specifically, loan limits are $100,000 for graduate programs, and $200,000 for professional programs (e.g., medical and dental school). The law also phases out GradPLUS loans — an important tool to help students pay for education — that are currently capped at the total cost of attendance.

The law does not include a provision opposed by the ACR and included in earlier versions of the bill that eliminated pass-through entity tax deductions for many small businesses, including medical practices.

For more information, contact Ashley Walton, ACR Government Relations Director.