Top 5 Takeaways: 2017 Medicare Physician Fee Schedule Rule

On November 2, 2016, CMS issued a final rule to update payment rates, policies, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) in the 2017 calendar year.  Released just weeks after CMS published its final 2,000+ page MACRA regulation, the Physician Fee Schedule regulation has received less media and industry attention than the MACRA regulation, but it remains critically important for healthcare providers to understand as they move into 2017.

Indeed, totaling a massive 1,401 pages in length, the breadth and complexity of the rule reflects the breadth and complexity of Medicare payment schemes as well as CMS’ commitment to accelerate the pace of value-based payment reform in 2017 and beyond.  That being said, here are the top 5 takeaways from the 2017 Medicare Physician Fee Schedule Rule:

  1. Medicare physicians will receive a minimal across-the-board payment rate increase in 2017.  The 2017 Medicare Physician Fee Schedule conversion factor (which is used to update every PFS reimbursement code rate each year on January 1) increased 0.24% from 2016. This was the result of the 0.5% annual update that was included in the MACRA legislation being partially offset by other budgetary provisions that were responsible for a 0.26% decrease. For providers, this means that all PFS code reimbursement rates received a standard 0.24% payment increase January 1, with individual codes receiving additional positive or negative adjustments as the result of other policies included in the rule.

  2. CMS is doubling down on chronic care management. Since 2015, CMS has been reimbursing providers under CPT 99490 approximately $40 per patient per month for providing 20 minutes of non-face-to-face care management services to patients with multiple chronic conditions. However, adoption of the codes has been slow to date in part due to the strict billing requirements and relatively low reimbursement rates. In response, CMS used the 2017 PFS rule to loosen certain regulations governing 99490 and add two new codes to allow providers to bill for more than 20 minutes of CCM services per patient per month. Deemed “complex chronic care management” codes, taken together CPT 99487 and CPT 99489 would reimburse providers $140 per patient per month for providing 90 minutes of complex CCM services.

  3. CMS continues to tweak its ACO regulations. The regulations governing Medicare’s Shared Savings (MSSP) ACO Program, which is the largest of Medicare’s ACO programs and offers multiple participation tracks, were again altered by CMS through the 2017 PFS rule. In 2017, MSSP ACOs will be required to report a revised set of 31 quality measures (down from 34 in 2016), while in 2018 the ACO beneficiary assignment formula will change to allow for voluntary beneficiary enrollment in all MSSP ACO tracks.

  4. CMS is moving ahead to establish clinical decision support requirements for certain imaging tests. As mandated by The Protecting Access to Medicare Act of 2014, CMS is in the process of establishing a new program to apply the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. Building on policies established by the 2015 and 2016 PFS rules, the 2017 PFS rule finalized the clinical decision support mechanism requirements and approval process, and defined several areas of clinical priority. Starting January 1, 2018, to comply with these provisions and receive reimbursement, ordering providers will be required to consult appropriate use criteria through a qualified clinical decision support mechanism.

  5. MACRA performance in 2017 will impact Medicare Physician Fee Schedule payments in 2019.  With so much attention paid to MACRA as of late, it’s easy to get confused as to when and how MACRA will impact providers and how it impacts other CMS regulations, such as the Physician Fee Schedule. As we move in 2017, providers should keep in mind that 2017 performance in MACRA will impact 2019 payments under the Medicare Physician Fee Schedule; while 2015 performance in Medicare’s Meaningful Use (MU) EHR incentive program, Physician Quality Reporting System (PQRS), and Physician Value-Based Payment Modifier (VBM) will impact 2017 payments made under the Physician Fee Schedule.

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