Conversion Factor
The Medicare conversion factor is the dollar multiplier that turns a code's total relative value units into a payment amount. For 2026 there are two: $33.5675 for qualifying APM participants and $33.4009 for all other clinicians. It changes every January and drives every Medicare Physician Fee Schedule rate.
- 2026 value (non-QP)
- $33.4009
- 2026 value (QP)
- $33.5675
- Updated
- Every January 1 (MPFS final rule)
- Applies to
- All Medicare Physician Fee Schedule services
What does the conversion factor actually do?
It is the single dollar figure that converts relative value into money. Every service on the Medicare Physician Fee Schedule is priced as RVUs, a resource measure with no currency attached. The conversion factor supplies the currency: total geographically adjusted RVUs times the CF equals the Medicare allowed amount. Because one number scales every code simultaneously, a 2% CF cut is a 2% cut to literally everything a practice bills under the fee schedule.
Example with the 2026 non-QP factor: a code totaling 3.00 adjusted RVUs pays 3.00 x $33.4009 = $100.20. The same code at 2019's CF ($36.0391) would have paid $108.12, which is the compressed-reimbursement story of the last several years in one line.
Why are there two conversion factors in 2026?
MACRA's payment formula split the annual update into two tracks starting in 2026: clinicians who are qualifying participants (QPs) in advanced alternative payment models get a 0.75% statutory update, everyone else gets 0.25%. Layered with budget-neutrality and other adjustments in the final rule, that produced $33.5675 for QPs and $33.4009 for non-QPs. The gap is small this year (about 0.5%) but it compounds annually, which is the long-game financial argument for APM participation.
Operationally: your MACs apply the correct CF automatically based on QP status, but your internal fee analysis, budgets, and any contract pegged to "current Medicare" need to know which track each clinician is on.
How do you measure a conversion factor change on your practice?
- Pull last year's Medicare allowed charges by CPT code and units from the PM system.
- Reprice the same volume at the new year's RVUs and CF (the Medicare fee calculator does the locality math for you).
- Compare line by line. The CF move affects everything equally, but RVU revaluations hit specific codes, and the combined effect is what your cash flow will feel.
- Repeat for commercial contracts that float on current-year Medicare.
A two-physician practice with $420,000 in annual Medicare allowed revenue sees roughly $4,200 move for every 1% the effective rate shifts. That is the number to bring to any conversation about adding APM participation or renegotiating a Medicare-pegged commercial contract.
Frequently asked questions
For the first time there are two: $33.5675 for clinicians who are qualifying participants (QPs) in advanced alternative payment models, and $33.4009 for everyone else. The split was created by the Medicare Access and CHIP Reauthorization Act (MACRA) update formula, which gives APM participants a slightly higher annual update.
Multiply it by the code's total geographically adjusted RVUs. A service totaling 2.00 adjusted RVUs pays 2.00 x $33.4009 = $66.80 as the Medicare allowed amount for a non-QP clinician in 2026. Medicare pays 80% of that and the patient owes 20% after the Part B deductible.
Congress sets the statutory update (currently different for QP and non-QP tracks), and CMS layers on a budget-neutrality adjustment so that RVU changes across thousands of codes do not change total spending. Any year CMS raises RVUs for common services, budget neutrality pushes the conversion factor down unless Congress intervenes.
Indirectly but substantially. Contracts written as a percentage of the current-year Medicare fee schedule move automatically when the CF moves. Contracts pinned to a fixed year (for example, "120% of 2023 Medicare") do not, which is exactly why payers prefer pinning to low-CF years and you should not agree blindly.
Sources & further reading
Reviewed by the ImmediCare Solutions RCM team
Certified billers and coders handling claims across 50+ specialties nationwide. This entry is reviewed against current payer policy and CMS rules. Last review: Jul 5, 2026.
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