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CMS releases proposed 2017 Medicare physician fee schedule



July 25, 2016
Area(s) of Interest: Payor Contracting Payor Issues and Reimbursement Practice Management 

The Centers for Medicare and Medicaid Services (CMS) recently released the proposed 2017 Medicare physician payment rule. According to CMS, the new payment rule will transform how Medicare pays for primary care through a new focus on care management and behavioral health.


The proposed rule also begins to implement the California Geographic Practice Cost Index (GPCI) fix, which will overhaul California’s outdated geographic payment localities. This 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. The transition to the new localities starts next year, with higher payments being phased in over a six-year period starting in 2017.


The California Medical Association (CMA) is reviewing the complex California GPCI implementation proposal and will provide additional information once that analysis is complete. CMS also made nationwide updates to the GPCI based on new wage, rent and malpractice expense data.


The proposed physician fee schedule for 2017 focuses on improving Medicare payment for services provided by primary care physicians for patients with multiple chronic conditions, mental and behavioral health issues, and cognitive impairment or mobility-related disabilities.


These changes will improve payment for clinicians who are making investments of time and resources to provide more coordinated and patient-centered care. These proposed coding and payment changes will better reflect the resources involved in furnishing contemporary primary care, care coordination and planning, mental health care and care for cognitive impairment, such as Alzheimer’s disease.


CMS estimates that these changes would result in approximately $900 million in additional funding in 2017 to physicians and practitioners providing patient-centered care, mental health care and diabetes prevention.


The proposal would also expand coverage of the Medicare Diabetes Prevention Program (DPP) model to Medicare patients at risk of developing type 2 diabetes. Expansion of the DPP model will help at-risk seniors and people with disabilities lower their risk factors and prevent their condition from advancing to type 2 diabetes. Earlier this year, CMS concluded that the expanded coverage would result in significant cost savings. The proposal also underscores the important role of prevention in stemming the tide of chronic disease.


The proposed rule was published in the July 15, 2016, Federal Register. CMS will accept comments on the proposed rule until September 6, 2016.


CMA is carefully analyzing the multitude of changes to the physician payment system and will be submitting extensive comments.


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

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