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 (SGR) 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.

On July 13, 2017, the Centers for Medicare & Medicaid Services (CMS) released the 2018 proposed Medicare Physician Fee Schedule. The AAFP issued a media statement with an initial reaction that recognized that CMS included several AAFP-recommended administrative simplification provisions. If finalized, these provisions will significantly reduce the burden of primary care practices when participating in the Medicare program. These favorable steps include CMS proposals to:

  • Overhaul and modernize Medicare’s evaluation and management (E/M) documentation guidelines.
  • Begin implementing site-neutral provisions to ‘new’ off-campus provider-based departments.
  • Delay the Appropriate Use Criteria (AUC) program for advanced diagnostic imaging services until January 1, 2019.
  • Lower the maximum amount of risk under the 2018 Value Modifier program from 4.0 percent to 1.0 percent for practices of less than 10 physicians.
  • Retroactively reduce the number of 2018 Physician Quality Reporting System (PQRS) measures from nine to six to further align with Merit-based Incentive Payment System (MIPS) quality measure reporting requirements.

The AAFP is currently analyzing the regulation’s impact on family physicians and will provide extensive feedback to CMS before their comment deadline of September 11, 2017. The agency is expected to issue the final version of this regulation in the fall of 2017.


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