Medicare Releases 2017 Physician Fee Schedule Final Rule

The Centers for Medicare and Medicaid Services released its final rule for its 2017 physician fee schedule payment policies, which updates payment policies and payment rates for services provided under the Medicare Physician Fee Schedule (PFS) starting Jan 1, 2017.

The 1,400-page 2017 final rule discusses changes to a number of new policies that reflect a broader agencywide strategy to enhance quality, spend smarter and improve Americans’ health.

Here are eight changes to note:

CMS will begin gathering data on postoperative visits. The final rule requires reporting of postoperative visits for high-volume/high-cost procedures by a sample of practitioners in practices with 10 or more physicians. Reporting is required for services related to global procedures provided on or after July 1, 2017.

Changes were made to provider and supplier requirements for Medicare Part C. Providers and suppliers will be screened and enrolled in Medicare to contract with a Medicare Advantage organization to provide items and services to those enrolled in Medicare Advantage health plans.

CMS finalized its proposal to expand eligible telehealth services. The additional codes include those for end-stage renal disease-related dialysis, advanced care planning and critical care consultations. The critical care consultations provided via telehealth will use the new Medicare G-codes.

CMS will improve data transparency. Medicare Advantage organizations use a bidding process to apply to participate in the Medicare Advantage program, and the bidding process will reflect the organization’s estimated costs to provide benefits to enrollees. Under the final rule, Medicare Advantage organizations are required to release data associated with these bids on an annual basis. CMS will also require Medicare Advantage organizations and Part D sponsors to release medical loss ratio data on a yearly basis to help beneficiaries make enrollment decisions.

The agency revised the methodology used to calculate geographic practice cost indices. CMS adjusts payments under the physician fee schedule to reflect local differences in practice costs using geographic practice cost indices. The agency will revise the methodology used to calculate GPCIs to increase overall physician fee schedule payments in Puerto Rico. The updates will be phased in over 2017 and 2018.

CMS finalized expansion of the Medicare Diabetes Prevention Program. The 2017 rule finalizes some aspects of the expanded model, but future rulemaking will address payment policies, program safeguards and other issues. CMS expects to begin payment for MDPP services in 2018.

CMS revised the billing codes to more accurately pay for primary care, care management and other cognitive specialties. Among the changes are new codes to pay primary care practices that use interprofessional care management resources to treat patients with behavioral health conditions.

Physician payment rates will increase by 0.24 percent in 2017. CMS arrived at this increase after accounting for a 0.5 percent increase required by the Medicare Access and CHIP Reauthorization Act and mandated budget neutrality cuts, according to the American Hospital Association.

For more information, please see Final Policy, Payment, and Quality Provisions in the Medicare Physician Fee Schedule for Calendar Year (CY) 2017