Medicare Physician Fee Schedule


In April 2015, the President signed into law the Medicare Access and CHIP Reauthorization Act of 2015 (HR 2, also known as MACRA). This law:

  • Repeals the Sustainable Growth Rate methodology for determining updates to the Medicare physician fee schedule.
  • Establishes annual positive or flat fee updates for 10 years and institutes a two-tracked fee update afterwards.
  • Establishes a Merit-Based Incentive Payment System that consolidates existing Medicare fee-for-service physician incentive programs.
  • Establishes a pathway for physicians to participate in alternative payment models, including the patient-centered medical home.
  • Makes other changes to existing Medicare physician payment statutes.

The 2016 proposed Medicare physician fee schedule was published in the July 15, 2015 Federal Register and CMS will accept comments on it until September 8, 2015. The AAFP is thoroughly analyzing these proposals and will submit formal comments to the agency prior to the deadline. Of particular interest to family physicians, this regulation proposes to: 

  • Specify the 2016 Medicare conversion factor to be $36.1096, which reflects a budget neutrality adjustment and the 0.5 percent update factor set by the law that repealed the Sustainable Growth Rate (SGR) formula
  • Establish separate payment for two Advance Care Planning (ACP) services provided to Medicare beneficiaries beginning in 2016
  • Improve payment accuracy for primary care and care management
  • Explore the potential expansion of the Comprehensive Primary Care Initiative
  • Establish methodology pertaining to the Misvalued Code Target and identify changes that achieve only a 0.25 percent in net reductions; CMS is expected to make further changes for misvalued codes in the final rule to achieve the statutory goal of reductions of at least 1 percent
  • Develop further the Value-Based Payment Modifier, which provides for differential payments under the physician fee schedule to physicians, groups of physicians, and other eligible professionals based on the quality and cost of care they furnish to traditional Medical beneficiaries
  • Specify policies surrounding the requirement that providers who order advanced diagnostic imaging services must consult with appropriate-use criteria via a clinical decision support mechanism. 

The regulation also includes changes to the Physician Quality Reporting System (PQRS), the Medicare Electronic Health Record (EHR) Incentive Program, and the Physician Compare website. It modifies Part B drugs and payments for biosimilar biological products, makes misvalued code changes for radiation therapy, implements the statutory phase-in of significant RVU reductions, makes misvalued code changes for lower GI endoscopy services, updates the physician self-referral policy, changes the Medicare physician and practitioner opt-out policy, and requests input on other changes.

The regulation will be published permanently in the July 15, 2015 Federal Register and CMS will accept comments until September 8, 2015. 

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