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 7, the Centers for Medicare & Medicaid Services (CMS) released the 2017 proposed Medicare physician fee schedule( In a letter(56 page PDF) sent to CMS on August 19, the AAFP responded to the proposed rule. The letter expressed appreciation that that the proposed rule continues a multi-year effort on the part of CMS to both prioritize and promote primary care as foundational to the Medicare program. 

The AAFP letter recognized that CMS has made a commitment to improving payments for family medicine through the 2017 proposed Medicare physician fee schedule (PFS) and that proposed changes are estimated to result in approximately $900 million in additional funding to primary care physicians. The AAFP urged CMS to maintain these payment changes in the final rule. To improve the final 2017 Medicare physician fee schedule rule, in summary the AAFP:

  • Appreciated that this proposed rule continues a multi-year effort on the part of CMS to both prioritize and promote primary care as foundational to the Medicare program, especially since APMs and MIPS are based on fee for service.
  • Supported CMS’s proposals to pay separately for complex chronic care management services.
  • Expressed ongoing, significant concerns about the disproportional burden primary care physicians will face when trying to comply with Appropriate Use Criteria (AUC) requirements and therefore, strongly urges CMS to delay the implementation of this program so that AUC would be aligned with the forthcoming MIPS program in 2019, versus being introduced as a stand-alone program.
  • Supported revisions to policies that create unnecessary barriers to the responsible and appropriate use of telemedicine services.
  • Applauded CMS for its diligence in identifying and reviewing potentially misvalued codes.
  • Recognized that evaluation and management (E/M) services are undervalued relative to procedural services, especially procedures with 10- and 90-day global periods.
  • Continued to support CMS in its efforts to adjust work relative value units.
  • Fully supported the expansion of the Medicare Diabetes Prevention Program.
  • Strongly supported that patients be prospectively assigned a primary care physician or provider along with a simple process for the beneficiary to change the physician or provider to whom he or she was attributed. 

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