Medicare 2018 fee schedule finalized for 2018

December 01, 2017
Area(s) of Interest: Payor Issues and Reimbursement 

The Centers for Medicare and Medicaid Services (CMS) recently published the final Medicare Physician Fee Schedule for 2018. Overall, the California Medical Association (CMA) is pleased to see many positive changes in the final rule, including the reduction of penalties under the flawed Value Modifier (VM) program, the expansion of coverage for telehealth services, the delay in implementation of the Appropriate Use Criteria (AUC) for imaging, and the reduction of documentation requirements for Medicare Shared Savings Program accountable care organizations. CMA also fully supports the continued expansion of the Medicare Diabetes Prevention Program (DPP) and the transition to the new geographic payment regions in California.

In the proposed rule released this summer, CMS announced its “Patients before Paperwork” initiative and invited physicians to submit ideas for regulatory, policy, practice and procedural changes to improve the health care system to reduce unnecessary burdens for clinicians, patients and their families. CMA submitted its “Top 10 List for Regulatory Relief” to CMS and strongly urged CMS to provide immediate relief because it is causing a significant and disturbing trend in physician burnout.

CMA’s top 10 regulatory relief demands include reducing the MACRA reporting burdens, mandating EHR interoperability, reforming Medicare physician audits, reducing Medicare Advantage data requests, removing federal laboratory licensing requirements, paying for translators, rescinding the two-midnight observation care rule and exempting physician in-office drug compounding from the new FDA rule. The regulatory relief issues will be addressed in a separate and upcoming regulation.

Click here to read the the American Medical Association (AMA) summary. Highlights of the 2018 final Medicare Physician Fee Schedule are below. Highlights of the 2018 final Medicare Physician Fee Schedule are below.

Quality Reporting

In response to advocacy from CMA and AMA, CMS revised the 2016 Physician Quality Reporting System (PQRS) and Meaningful Use reporting requirements to only require physicians to report six measures with no domain or cross-cutting measures. This change aligns the 2016 requirements with the new MACRA requirements. CMS estimates this change alone will reduce physician penalties by $22 million. Also, the CAHPS survey for group practices of 100+ physicians will be optional in for the Group Practice Reporting Option.

Value Modifier

CMS made significant changes to the problematic value modifier program, which rewards or penalizes physicians on their Medicare expenditures compared to their peers. (CMA has heavily criticized this program.)

  • Physicians who met the 2016 PQRS reporting requirements will not receive a VM penalty in 2018.

  • Penalties were cut in half for physician groups and small practices who did not meet the PQRS requirements.

  • The proposal to publicly report 2016 VM physician expenditure data on its Physician Compare website was eliminated.

Diabetes Prevention Program

CMA and AMA strongly support the Medicare Diabetes Prevention Program. CMS is allowing a maximum payment per beneficiary of $670 over three years for core and maintenance services. CMS is also shifting a higher percent of the payment resources to the first six months of the DPP services period. CMS delayed the start date of the program until April 1, 2018, and finalized new HCPCS G-codes for reporting DPP services. Unfortunately, CMS declined to approve payment for virtual DPP services.


CMS finalized numerous expansions of telehealth and remote patient monitoring services coverage pursuant to AMA and CMA advocacy.

Appropriate Use Criteria for Imaging

At CMA and AMA’s urging, CMS has again delayed implementation of the Appropriate Use Criteria program until January 1, 2020. The program would have denied payment for advanced imaging services unless the physician ordering the service had consulted the AUC. In 2020, the AUC program will transition in with an educational and operations testing period. Physicians may voluntarily report starting in July 2018. 


CMS will allow separate coding and payment for each approved biosimilar product.

Medicare Shared Savings Program

CMS has substantially reduced the documentation requirements for 1) the initial Medicare Shared Savings Program application; 2) Skilled Nursing Facility 3-day waiver application; and 3) reporting for Rural Health Clinic and Federally Qualified Health Center claims. CMS is also allowing seven additional primary care services codes for Chronic Care Management and Behavioral Health Integration.

Medicare Site of Service Price Transparency

In the outpatient services final rule, CMS announced plans to establish a public website in 2018 that makes available the estimated payment amount for an item or service under the Outpatient Services Fee Schedule pursuant to the 21st Century Cures Act that Congress passed last year.

Contact: Elizabeth McNeil, (800) 786-4262 or emcneil@cmadocs.org.


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