2017 Final Medicare Physician Fee Schedule

Healthcare

2017 Final Medicare Physician Fee Schedule

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Medical Group Management Association (“MGMA”) performed an analysis of the final 2017 Medicare physician fee schedule (“Fee Schedule” or “Regulation”) published by the Centers for Medicare & Medicaid Services (“CMS”) in the Federal Register on November 15, 2016.

Background

CMS uses the Fee Schedule to reimburse physician services. The Fee Schedule became effective January 1, 1992 and replaced the old “customary, prevailing, and reasonable” charge system. As explained on CMS’ website, the Fee Schedule provides more than 10,000 physician services, the associated relative value units (“RVU”), a fee schedule status indicator and various payment policy indicators needed for payment adjustment. The Fee Schedule pricing amounts are adjusted to reflect the variation in practice costs from area to area. A geographic practice cost index (“GPCI”) has been established for every Medicare payment locality for each of the three components of a procedure’s RVU. The GPCIs are applied in the calculation of a fee schedule payment amount by multiplying the RVU for each component times the GPCI for that component.

MGMA Analysis of the Fee Schedule

Outlined below are a number of key components of MGMA’s analysis of the Regulation.

Medicare Part B beneficiary cost-sharing

The Regulation includes policies that affect Medicare Part B payments for physician services furnished on or after January 1, 2017. It also sets the calendar year 2017 PFS conversion factor to $35.8887 and the CY 2017 national average anesthesia conversion factor to $22.0454.

Under the new regulation, Medicare Part B’s monthly premiums will increase to $134 in 2017; up from $121.80 in 2016, for one-third of Medicare beneficiaries. For beneficiaries “held harmless” due to a lower than usual Social Security cost-of-living adjustment, the average 2017 premium will be approximately $109, up from $104.90 in 2016. The annual deductible will increase to $183 in 2017 for all Medicare Part B beneficiaries.

Medicare telehealth services

The following Medicare telehealth services were added by CMS to the approved list for 2017:

1. Advance care planning Current Procedural Terminology (“CPT”) codes 99497 and 99498;
2. End-stage renal disease home dialysis CPT codes 90967, 90968, 90969, and 90970; and
3. Critical care evaluation and management using new Medicare G-codes G0508 and G0509, with finalized work RVUs of 4.0 and 3.86; respectively.

Reporting requirement for global surgical codes

CMS has mitigated its complex proposal to collect data on services furnished during global surgical periods and will require surgeons and practitioners in medium and large practices (groups of 10 or more practitioners) in selected states to report CPT code 99024 for each post-operative visit during global surgical periods. States where the practitioners are required to report this data include Florida, Kentucky, Louisiana, Nevada, New Jersey, North Dakota, Ohio, Oregon, and Rhode Island.

Chronic care management (“CCM”) and transitional care management (“TCM”) in rural health clinics (“RHC”) and federal qualified health centers (“FQHC”)

CMS has also revised the CCM and TCM billing rules in order to allow RHCs and FQHCs to contract with third parties to provide aspects of CCM and TCM services. The revised rules now allow auxiliary clinical staff to furnish these services under general supervision of a RHC or Protecting Quality Health Care practitioner as opposed to direct supervision.

Payment recoupment or offset to providers sharing same tax identification number (“TIN”)

CMS also made a change to its notification process for overpayments that may be recouped or offset in cases where there are multiple entities sharing the same taxpayer identification number. CMS will notify the entity responsible for the overpayment and plans to take part in provider outreach and education before implementing this change.

Stark Law Updates

CMS now requires that rental charges for office space or equipment must not be determined using a formula based on a per-unit of service rental charges, to the extent that such charges reflect services provided to patients referred by the lessor to the lessee. However, this is not absolute and the formula is permissible in instances where the referral for the service to be provided in the rented office space or using the rented equipment did not come from the lessor.

Medicare Shared Savings Program (“MSSP”)

There have been modifications to the quality measures in the MSSP. The changes to the accountable care organization (“ACO”) quality measures include adding, replacing, and removing certain measures. One of the most prominent modifications is to ACO-11 to assess Certified Electronic Health Record Technology use by all eligible clinicians participating in the ACO, as opposed to exclusively primary care providers. Future changes to web interface measures will be automatically applied to MSSP ACO quality measures.

Conclusion

The Regulation includes a number of technical changes and clarifications in addition to new Medicare payment policies in 2017, reporting requirements for certain providers that furnish global surgical services, simplification of chronic care management billing requirements and updates to the MSSP for ACOs. MGMA prepared the analysis to explain the new and updated policies associated with the Medicare program for 2017.

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