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 29, 2019, the Centers for Medicare & Medicaid Services (CMS) ( the proposed 2020 Medicare Physician Fee Schedule (MPFS)( This regulation also impacts the Quality Payment Program (QPP). CMS released a related fact sheet( on the fee schedule and a 28-page summary on the proposed changes to the QPP( The final 2019 MPFS conversion factor is $36.04, whereas the proposed 2020 MPFS conversion factor is $36.09.

On September 18, the AAFP filed formal comments with the agency in response to the 2020 proposals.  The AAFP first commended CMS’ commitment to improving the Medicare program for all beneficiaries.  The AAFP then offered comments on the following high-level issues:

  • Office/Outpatient Evaluation and Management (E/M) Coding. The AAFP supports the adoption of the work relative value units (RVUs) recommended by the RVU Update Committee (RUC) for all the office/outpatient E/M codes, the new prolonged services add-on code, and CMS’ proposal to maintain separate values for levels two through four visits rather than implement its plan for a blended payment rate for those services. However, since most family medicine practices already operate on extremely thin margins and these services have been undervalued for decades, we implore CMS to implement these changes in 2020 rather than 2021 as proposed.
  • Global Surgical Packages. Based upon analysis available from RAND and the Medicare Payment Advisory Commission, we believe the proposed recommendations put forth by CMS are the appropriate policy. Therefore, we strongly support CMS’ proposal to not adjust the office/outpatient E/M visits for codes with a global period to reflect the changes made to the values for office/outpatient E/M visits.
  • Chronic Care Management. The AAFP is concerned the addition of new principal care management (PCM) codes would move away from the continuous, comprehensive, and coordinated value-based care and primary care CMS has otherwise been encouraging as a cost-effective way to care for Medicare patients. We offered alternative recommendations to strengthen care for beneficiaries with chronic conditions and urge CMS to use the existing Current Procedural Terminology (CPT) coding process to make changes to these codes.
  • Merit-based Incentive Payment System (MIPS) Value Pathways. We share CMS’ goals of reducing administrative complexity in the MIPS program, structuring the program to help providers move to Alternative Payment Models (APMs), and strengthening the ability of providers and practices to engage in continual quality improvement through the sharing of performance data and feedback. The AAFP offers a number of recommendations to accomplish these objectives.
  • MIPS Cost Measures. Many of our members are small practices, including those who practice in rural areas. We remain concerned about the impact of outlier, high-cost cases on these practices and their performance on cost measures—and we offer recommendations to mitigate these potential impacts. We are also concerned about the potential for overlap between the total cost of care and episode-based measures as primary care physicians will be measured on total costs that also include episodes. This discrepancy would hold primary care physicians doubly accountable for costs, particularly on episodes where they are unable to control costs.
  • MIPS APMs. The AAFP continues to be concerned about the impact of MIPS APMs—and their preferential scoring—on the MIPS program and providers in smaller practice settings. The differential treatment between MIPS and MIPS APMs disadvantages small and rural practice MIPS providers and creates an incentive for larger practices and organizations to remain in MIPS APMs and not move to the Advanced APM track.
  • Advanced APMs. The AAFP is cautiously optimistic about CMS’ recent announcement of the Primary Cares First (PCF) initiative and its potential to strengthen access to comprehensive and coordinated primary care. However, we continue to believe more Advanced APM options must be available to primary care physicians to move the Medicare program towards value—especially for small and rural practices.

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