Physicians who treat Medicare patients must decide each year whether to remain a participating provider, become non-participating or opt out entirely. The 2026 participation year begins January 1, 2026, and any change in status must be finalized by December 31, 2025.

The Centers for Medicare & Medicaid Services (CMS) on October 31 released the final rule for the 2026 Medicare Physician Fee Schedule, outlining sweeping changes that will significantly reshape how physicians are paid under Medicare. While the rule provides gains for some primary care physicians and independent practices, many specialists – and physicians who provide most of their services in hospital outpatient departments, ambulatory surgery centers, or skilled nursing facilities – face substantial payment reductions. For more information, see “CMS finalizes significant changes in 2026 Medicare Physician Fee Schedule.”

Medicare Participation Options

As always, physicians have three choices regarding Medicare: be a participating provider, be a non-participating provider, or opt out of Medicare entirely. Details on each of the three participation options are as follows:

• A participating physician must accept Medicare-allowed charges as payment in full for all Medicare patients. A participating provider receives 5% more reimbursement than a non-participating provider.
• A non-participating provider can make assignment decisions on a case-by-case basis and bill patients for more than the Medicare allowance for unassigned claims. Non-participating physician fees are 95% of participating physician fees. If you choose not to accept assignment, you can charge the patient 9.25% more than the amounts allowed in the participating physician fee schedule (which equates to 15% of the non-participating fees).
• Physicians who opt out of Medicare are bound only by their private contracts with their patients. Medicare's limiting charges do not apply to these contracts, but Medicare does specify that these contracts contain certain terms. When a physician enters into a private contract with a Medicare beneficiary, both the physician and patient agree not to bill Medicare for services provided under the contract. Validated opt-out affidavits automatically renew two years after the effective date.

Physicians who want to change their participation status for 2026 must submit a signed Medicare Participating Physician or Supplier Agreement (CMS-460) to Noridian, California’s Medicare contractor, postmarked by December 31, 2025. While participation agreements automatically renew each year, a new agreement must be completed if there is a name or EIN (tax identification number) change.

There is also information on physicians' Medicare participation options in California Medical Association (CMA) health law library document #7209, "Medicare Participation (and Nonparticipation) Options." Health law library documents are free to CMA members at cmadocs.org/health-law-library. Nonmembers can purchase documents for $3 per page.

More information on open enrollment is available on the Noridian website.