Medicare's 2026 Fee Changes: What Agencies Should Watch for in Workers' Comp

Federal Fee Adjustments Introduce New Variables for Workers' Comp Medical Costs

Medicare’s 2026 fee schedule includes a 3.3% increase in the physician reimbursement rate and a 2.6% rise in facility payments. While these changes are relatively small, they may affect workers’ compensation medical costs depending on the state and the nature of the services involved. Agencies need to understand how these updates may influence cost trends in their markets and how carriers respond to them.

RVU Rebalancing and Service-Specific Impacts

Medicare has adjusted how it assigns value to different types of medical services. Evaluation and Management (E/M) services are now reimbursed at a higher rate, while Surgical services face reduced rates. This shift means the financial impact will vary depending on which services are most common in a given state’s claims. Agencies placing coverage in regions where surgical procedures are frequent may see less pressure compared to those in areas where E/M services dominate the medical cost profile.

DMEPOS and the Competitive Bidding Program: A Smaller but Still Relevant Factor

The 2026 fee update for Durable Medical Equipment, Prosthetics, Orthotics, and Supplies (DMEPOS) includes a 2% increase. While this category represents a smaller portion of workers’ comp medical spending (4–13% depending on the state), it remains important. Most DMEPOS claims in workers’ comp involve codes not subject to Medicare’s Competitive Bidding Program, so the impact of this change may be less widespread compared to adjustments for physician or facility services. Nonetheless, agencies should monitor it as part of their overall cost management strategy.

State-Level Variations: The Key to Predicting Cost Exposure

The real complexity of these fee changes lies in how they play out at the state level. The impact depends on three factors: which medical services are included in a state’s fee schedule, how closely those rates align with Medicare's, and the distribution of medical costs within the state. States that mirror Medicare’s fee schedule may experience a sharper increase in physician-related costs, while those with unique structures may see minimal effects. Agencies should analyze these local nuances to better model and anticipate their own cost exposure.

Strategic Adjustments for Agencies in a Changing Landscape

These updates offer agencies a chance to refine their placement strategies. The National Council on Compensation Insurance (NCCI) has noted that even modest federal adjustments can create different outcomes at the state level. This means agencies may need to adjust their risk modeling and expectations for specific markets. It also underscores the value of ongoing monitoring, especially with the RVU rebalancing introducing a new variable that could evolve over time.

Next Steps: Evaluating Coverage and Placement Strategy

Medicare’s 2026 fee updates are a signal, not a mandate. For agencies, it’s a chance to revisit how medical costs are trending in their own markets and how those trends align with the carriers they place with. Explore our resources on workers’ comp coverage and placement or join Cennairus to streamline your wholesale placements and policy management.

Frequently asked questions

Will these Medicare changes cause a big increase in workers’ comp medical costs?

The National Council on Compensation Insurance says the 2026 changes are not expected to cause a major spike in costs. However, the impact will vary by state and the services involved in claims.

How do the RVU changes affect workers’ comp costs?

The rebalancing of Relative Value Units between E/M and Surgical services means the cost impact will depend on the types of services used in a claim. States where surgical services are more common may see less impact than those where E/M services are dominant.

Do these changes affect all states equally?

No, the impact varies by state based on the state’s fee schedule structure, how closely it mirrors Medicare rates, and the distribution of medical costs. Agencies should understand these nuances to anticipate local cost exposure.

What should agencies do to prepare for these changes?

Agencies should evaluate how these changes may affect their specific markets and adjust their strategies accordingly. Understanding the local impact and monitoring trends can help manage cost exposure more effectively.

How can agencies use Cennairus to respond to these changes?

Cennairus streamlines placement and policy management: one submission reaches several carriers and specialty markets, and ACORD forms and loss runs are read automatically.