Medicare Physician Fee Schedule

The Medicare Access and CHIP Reauthorization Act (MACRA) was signed in April 2015. 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 12, 2018, CMS released the 2019 proposed Medicare physician fee schedule(s3.amazonaws.com), which also includes new information on MACRA implementation. The proposed rule would make changes to outpatient Medicare Evaluation and Management requirements by collapsing levels 2-5 under one standard for documentation and proposes add-on payments for E/M codes.

As part of this proposed rule, CMS posted a press release(www.cms.gov), a fact sheet(www.cms.gov), and a fact sheet specific to Year 3 of the Quality Payment Program (QPP).  

Read the initial summary of the 2019 proposed schedule from the AAFP »(2 page PDF)

Webcast: CMS Briefing on 2019 Proposed Rule

On September 5, the AAFP provided formal comments to CMS in response to the 2019 proposed Medicare Physician Fee Schedule. The AAFP comments are intended to provide constructive recommendations so CMS can implement policies that will be meaningful for beneficiaries and supportive of family physicians. The AAFP noted serious reservations as to whether the bold reforms included in the 2019 proposed rule can be practically (or at all) achieved under the legacy fee-for-service system. The AAFP response argues that the pathway to true reform of the Medicare program, especially for primary care, lies in the broader proliferation of Alternative Payment Models (APMs). In summary the AAFP recommended CMS:

  1. Proceed with the proposed changes in documentation and implement these immediately – but without the collapse to a single payment for codes 99202-99205 and 99212-99215.
  2. Delay implementation of any changes to E/M policies or codes and their descriptors until the AAFP and other medical associations can work with CMS to develop new or revised office visit codes, descriptors, and values.
  3. Eliminate the proposed primary care add-on code and replace it with a 15% increase in payment for E/M services provided by physicians who list their primary practice designation as family medicine, internal medicine, pediatrics, or geriatrics.
  4. Eliminate the proposed 50 percent Multiple Procedure Payment Reduction (MPPR) for physicians who list their primary practice designation as family medicine, internal medicine, pediatrics, or geriatrics.
  5. Work with Congress to eliminate the applicability of deductible and co-insurance requirements for the chronic care management (CCM) codes. Eliminating CCM cost-sharing requirements would facilitate greater utilization of these codes and increase coordination of care for those beneficiaries with the greatest health care needs. Furthermore, the AAFP urges CMS to further reduce excessive CCM documentation requirements.

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