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Medicare just split physician payments into two classes. Winners and losers?
For the first time ever, Medicare is paying physicians differently based on their business model.
Starting January 2026, CMS created two conversion factors:
• $33.57 for docs in Alternative Payment Models (APMs)
• $33.40 for traditional fee-for-service physicians
Seems small? That 0.5% gap compounds annually.
Here’s what this really means:
Physicians treating the same patient, doing the same procedure, get paid differently based on whether they joined an APM. A colonoscopy, a hip replacement, a diabetes visit, all worth different amounts depending on your practice structure.
The winners? Large health systems with resources to manage APM requirements. They get the higher rate plus quality bonuses.
The losers? Small independent practices and solo docs who can’t afford the infrastructure for quality reporting, risk contracts, and data analytics that APMs require.
🤔 And guess who serves the most underserved patients?
Those same small practices in rural areas and inner cities. The ones already struggling with thin margins. The ones keeping their doors open for Medicaid patients when others won’t.
CMS says this incentivizes value over volume. But when independent practices close because they can’t compete with a permanent payment disadvantage, where do those patients go?
To overwhelmed FQHCs. To emergency rooms. Or they simply stop seeking care.
This isn’t just about physician income. It’s about accelerating consolidation in healthcare. When payment policy picks winners before the game starts, we all lose choice.
The irony? APMs were supposed to improve access and reduce disparities.
Instead, we’re creating a two-tier payment system that may widen the gap.
♻️ Repost if healthcare payment reform shouldn’t leave small practices behind.
👉 Follow me, Jonathan Govette, for daily, real-time updates on healthcare technology and business news. LinkedIn Profile: https://www.linkedin.com/in/jonathangovette/
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Author:
Jonathan Govette is a seasoned healthcare and technology executive with more than two decades of experience building, scaling, and advising digital health companies. He is the Co-Founder and CEO of Oatmeal Health, an AI-driven Lung Cancer Screening and Diagnostics company focused on expanding access to early detection for underrepresented populations, particularly patients served by Federally Qualified Health Centers and value-based health plans.
With a background in engineering, product development, and strategic partnerships, Jonathan has founded and led multiple health technology ventures across clinical care delivery, regulated medical software, and AI-enabled diagnostics. His work sits at the intersection of medicine, technology, and health equity, with a consistent focus on translating complex clinical problems into scalable, real-world solutions.
Jonathan has spent much of his professional life dedicated to improving outcomes for marginalized and underserved communities. He has designed and implemented frameworks that align clinical quality, reimbursement, and technology to sustainably advance health equity at scale. This mission is deeply personal and informs his leadership philosophy and long-term vision for healthcare transformation.
In addition to his operating experience, Jonathan is an author and long-time writer in the healthcare domain, with over 20 years of published work covering digital health, medical innovation, and healthcare systems. He is a frequent mentor to early-stage founders and regularly advises startups on product strategy, partnerships, and go-to-market execution in regulated healthcare environments.
Before entering industry full-time, Jonathan nearly pursued a career in medicine with an early path toward cardiothoracic surgery, an experience that continues to shape his clinical perspective and respect for frontline care delivery.
CEO | Oatmeal Health | AI Lung Cancer Startup | Engineer | Writer | Almost Became a Doctor (Cardiac Thoracic Surgeon) | 3x Health Tech Founder | Startup Mentor | Follow to share what I’ve learned along the way.
