California Medical Association (CMA) physician leaders recently traveled to Baltimore, M.D., to meet with the Centers for Medicare and Medicaid Services (CMS) leaders responsible for implementing the California Geographic Practice Cost Index (GPCI) fix, which will overhaul California’s outdated geographic payment localities.

CMA was represented at the GPCI meeting by Larry DeGhetaldi, M.D., division president of the Palo Alto Medical Foundation in Santa Cruz, and Edward Bentley, M.D., a gastroenterologist in solo practice in Santa Barbara.

Both physicians have worked on the GPCI issue for CMA for more than a decade. They presented CMS with a new CMA white paper outlining the implementation issues and legislative intent. They also presented a spreadsheet of extensive calculations that they personally performed to help guide CMS with the transition to the new localities.

The transition was authorized in 2014, when Congress enacted H.R. 4302, the “Protecting Access to Medicare Act.” The law included a mandate for CMS to move California’s Medicare physician payment localities to the same Metropolitan Statistical Areas (MSA) used to pay hospitals, which more accurately reflect the cost of practicing medicine.

The transition to the new localities starts next year, with the higher payments being phased in over a six-year period starting in 2017. It is long overdue. Congress was compelled to enact this change because CMS had not updated California’s Medicare physician localities since 1997. Because of this inaction, Medicare payments in 14 California counties were vastly inaccurate, with under-payment errors up to 14 percent. While Medicare updates hospital payment regions annually, it will be 20 years since Medicare last updated the physician payment regions, and regional costs have changed dramatically in that time. The outdated locality payments were negatively impacting access to care in many areas of California.

Under the new law, all California physician Medicare payment localities will move to the Office of Management and Budget-defined MSAs, as recommended by the Institute of Medicine. The MSAs will be updated annually.

The long-overdue fix updating California’s Medicare physician payment regions will raise payment levels for 14 urban California counties misclassified as rural, while holding the remaining rural counties permanently harmless from cuts. CMS must issue regulations in 2016 for the January 1, 2017, implementation date.

CMA will remain vigilant and actively involved in the GPCI implementation on behalf of California physicians.

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