Office Hours: Urology's 17% Reimbursement Swing

The 2026 Medicare Physician Fee Schedule has dropped a bombshell on urology. Between massive payment swings favoring office-based procedures and the first real differentiation in prostate biopsy reimbursement in years, the entire urology landscape is about to shift.

For medical device companies calling on urologists, this isn't just another CMS update to file away. This is your chance to fundamentally rethink your commercial approach. 

What's actually happening

CMS is implementing two changes that will reshape where and how urology care gets delivered:

Payment methodology overhaul: The new Practice Expense (PE) methodology creates a 17-percentage point swing between office and facility payments. Office-based procedures will see a 6% increase, while hospital-based procedures face an 11% cut. For a busy urology practice, that's the difference between growth and contraction.

Biopsy code updates (finally): After years of everyone billing the same code (55700) regardless of technique, CMS is introducing nine specific prostate biopsy codes. For the first time, advanced techniques like MRI-fusion and transperineal approaches will have their own codes and appropriate reimbursement levels.

Add in a 2.5% “efficiency adjustment” that reduces reimbursement for most procedures under the assumption of productivity gains – a change that hits procedural specialties like urology hardest, and you have a perfect storm of financial pressure pushing practices to rethink their entire operational model.

The real-world impact

For urology practices, the implications go beyond the percentages. Practices that have been on the fence about where to perform procedures now have a clear financial incentive to choose the office when clinically appropriate. The 17-point spread doesn't mean offices suddenly get paid more than hospitals - it means the gap is narrowing fast. And for practices already feeling margin pressure, an 11% facility cut versus a 6% office increase makes the decision much easier.

But it's not just about the money. The new biopsy codes finally recognize the clinical value of advanced techniques. Practices that invested in MRI-fusion technology or transperineal approaches can now be paid appropriately for that sophistication.

For medical device companies, this creates an entirely new strategic landscape:

• Office-based equipment becomes the growth market - Capital equipment for office settings will see unprecedented demand as practices scramble to shift procedures
• Hospital capital sales face headwinds - With an 11% payment cut, hospitals will scrutinize every capital purchase
• Technology differentiation finally matters - The new biopsy codes mean your advanced features translate directly to better reimbursement

The one time it’s safe to read comments on the internet

The American Urological Association (AUA) submitted formal comments on September 12, and their response reveals just how disruptive these changes will be.

What they support: The AUA acknowledges that the biopsy code changes were long overdue and supports most of the RUC-recommended values. They recognize CMS is trying to accurately value procedures.

What they're fighting: The efficiency adjustment and PE methodology changes. The AUA argues the 2.5% cut doesn't reflect that procedures are becoming more complex, not simpler. They're especially concerned about the immediate implementation of PE changes, calling for at least a one-year delay.

Their bottom line: If changes must happen, phase them in. Reduce the PE adjustment to 25% instead of 50%. Exempt recently valued codes from efficiency cuts. The AUA believes its members need time to adapt.

What this means for your commercial strategy

1. The hidden opportunity in biopsy codes creates unprecedented targeting precision.

It's been difficult to truly understand the prostate biopsy market. Everyone billed 55700, whether they were doing basic systematic biopsies or sophisticated MRI-fusion. Starting in 2026, when practices bill the new codes, you'll finally have visibility into which practices actually perform advanced procedures and which don’t. This transforms how you identify, prioritize, and engage targets, letting you segment the market based on actual clinical sophistication rather than guesswork.

2. The office migration accelerant identifies your growth accounts.

We've been talking about the market changing to favor office-based procedures for years, but this rule is going to supercharge that shift with a 17% payment differential. The immediate opportunity will be practices with strong office capabilities but still billing facility-based procedures. They have the infrastructure to shift procedures immediately and could benefit most from understanding these payment changes. 

These hybrid practices can move quickly once they understand that a practice performing 40 prostate biopsies monthly sees their hospital payments cut 11% while office payments go up 6%. That’s a spread that fundamentally changes the ROI calculation for where to perform procedures.

3. The urgency factor rewards vendors who move now

Smart practices are already running the numbers and making equipment decisions before the final rule drops in November. For companies with strong office-based solutions, this creates an opportunity to help practices plan their transition thoughtfully. 

Practices that optimize their layout and workflow early will be best positioned for 2026. The vendors who help practices understand these changes today, with specific calculations using actual procedure volumes, will lock in relationships before the market fully grasps what's happening.

It’s time

For medical device companies, this is your moment. The practices that successfully navigate this transition will need partners who understand both the clinical and financial implications. They'll need equipment that enables office-based procedures. They'll need technology that justifies higher reimbursement codes. 

Larger, integrated urology groups will be well-positioned to invest in office-based technologies and new biopsy procedures. But some device companies may decide that opportunity lies with independent and smaller practices. Many will need the right partners to stay competitive in a market tilting toward efficiency and site-of-service flexibility.

The question isn't whether the urology market will change - it's whether you'll help shape it or just react to it.