Yes. In a February 24, 2026 MGMA Stat poll of 166 medical groups, 80% said Medicare reimbursement is below the cost of delivering care. Another 15% said rates equal cost and 5% said rates exceed it.
What 166 groups said about Medicare rates
MGMA runs its Stat polls weekly with a panel of practice leaders. The February 2026 poll drew 166 applicable responses. Eighty percent of those groups put Medicare below break-even, which leaves 20% who say it pays at or above cost. Practices cannot negotiate Medicare rates. CMS sets them by rule each year, so the 80% figure reflects a price that groups take as given.
The same question has run before. MGMA's September 30, 2026 review of its first ten years of polling reports that 67% of respondents said Medicare rates fell below cost in 2019. MGMA's Medicare payment article says that in 2021 nearly three-quarters of practices, 73%, said Medicare payments did not cover the cost of care.
| Year | Groups saying Medicare pays below cost | Source |
|---|---|---|
| 2019 | 67% | MGMA Stat at 10, September 30, 2026 |
| 2021 | 73% | MGMA Stat, Medicare payment article, 2026 |
| 2026 | 80% (166 responses) | MGMA Stat, February 24, 2026 poll |
Source: MGMA Stat. MGMA does not state sample sizes for the 2019 and 2021 polls, so the three readings are not a controlled trend. MGMA Stat is an opt-in panel of practice leaders, so the results describe that panel and not every practice. The share rose 13 percentage points from 2019 to 2026.
Costs climbed while the conversion factor barely moved
MGMA's Medicare payment article compares two long-run numbers. Operating cost per full-time physician rose more than 63% from 2013 to 2022. Over the same years, the Medicare conversion factor rose 1.7%.
Recent cost polls show the pressure continued. In MGMA's June 23, 2026 poll of 251 applicable responses, 84% of groups reported higher year-to-date operating costs than at the same point in 2025. Another 8% reported costs about the same and 8% reported a decrease. Groups with higher costs put the average increase at about 11%, and most answers fell between 5% and 20%.
The share of groups reporting higher costs has fallen each year in MGMA's June polls: 95% in 2023, 92% in 2024, 90% in 2025 and 84% in 2026. A falling share still means more than 8 in 10 groups paid more than a year earlier.
What the 2026 fee schedule changed
CMS released the final CY 2026 Physician Fee Schedule rule on October 31, 2025. The Association of American Medical Colleges (AAMC) reports two conversion factors. Clinicians who qualify as participants in advanced alternative payment models get $33.57, up 3.77% from 2025. All other clinicians get $33.40, up 3.26%.
The rule also applies a 2.5% efficiency adjustment to the work component of non-time-based services. AAMC says the adjustment generally excludes time-based codes such as evaluation and management, care management and behavioral health. Practices that bill mostly office visits see less of this cut than practices that bill procedures. MGMA describes the 2.5% figure as based on a five-year lookback of the Medicare Economic Index productivity adjustment.
A 3.26% rise for most clinicians sits below the 11% average cost increase reported by MGMA's June 2026 respondents. The two numbers measure different things, since one is a rate update and the other is a cost change across all payers, but practices feel them in the same budget.
Wage and price pressure inside the practice
MGMA's June 2026 cost review cites federal inflation data. Consumer prices rose 4.2% in May 2026, 3.8% in April and 3.3% in March. Medical care prices rose 3.1% year over year in March 2026, and medical services rose 3.7%.
Labor is the largest driver. In a July 8, 2025 MGMA poll, 65% of practice leaders named labor as the area with the biggest cost increase in 2025. MGMA's 2026 DataDive data show median total compensation for medical receptionists, medical assistants and licensed practical nurses up 15% to 22% over five years.
Budget plans for 2026 were modest. In a September 2025 MGMA poll, 64% of groups targeted base-pay increases of 1% to 3%, and 23% planned 4% to 6%. Pay for managed care administrative and patient accounting roles fell in 2025, per MGMA's DataDive data, but stays well above the five-year and 10-year benchmarks. MGMA also cites a PwC projection of an 8.5% medical cost trend for the group market in 2026, the third straight year at that level.
Margins and fixed Medicare terms
Margins reflect the gap. In an October 14, 2025 MGMA Stat poll, 48% of medical groups reported worse operating margins per full-time physician than the year before. In an October 28, 2025 poll, 37% said workforce was their largest area of new 2026 budget investment. MGMA's page lists these as headline figures and does not state their sample sizes.
Some Medicare terms are fixed for the next two years. MGMA lists Medicare telehealth flexibilities as extended through December 31, 2027. The MIPS performance threshold stays at 75 points through the 2028 performance period, which sets payment year 2030. Practices that budget for 2027 know these two terms and not the conversion factor, which CMS resets each year.
Sources
- MGMA Stat, 2026 Medicare reimbursement changes: Tracking what matters, 2026
- MGMA Stat, Operating costs keep climbing for medical practices in 2026, June 2026
- MGMA Stat, MGMA Stat at 10: What more than 380,000 responses show about a decade of change, September 30, 2026
- AAMC, CMS releases 2026 Medicare Physician Fee Schedule and Quality Payment Program rule, November 7, 2025
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