CMS Releases 2017 Physician Fee Schedule Final Rule

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  • November 14, 2016

On Wednesday, November 2, 2016, CMS released the 2017 Physicians Fee Schedule Final Rule. This final rule updates payment policies, payment rates and other provisions for services furnished under the Medicare Physician Fee Schedule.
The Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) calls for a conversion factor (CF) increase of 0.5% from 2016 – 2019. However, the 2017 CF is also impacted by the Achieving a Better Life Experience (ABLE) Act of 2014. The ABLE Act sets a target for adjustments to misvalued codes in the fee schedule of 1.0% for 2016, and 0.5% for 2017 and 2018.

In the 2017 final rule, CMS finalized misvalued code changes achieving a 0.32% net expenditure reduction. This does not meet the misvalued code target of 0.5% for 2017. Therefore, as required under the ABLE Act, CMS must apply a reduction of equal to the percentage difference between the target 0.5% and the percentage of net reductions (0.32% for 2017) to all Physician Fee Schedule (PFS) services in 2017. This estimated “target recapture” amount for 2017 is estimated to be a -0.18% reduction in the Conversion Factor (CF). The 2017 CF is further reduced by the 2017 Budget Neutrality adjustment and a 2017 Imaging MPPR adjustment resulting in a slight increase of next year’s CF from $35.80 in 2016 to a PFS CF of $35.89 in 2017.

Finalized proposals include:

• Separate payment for non-face-to-face prolonged evaluation and management (E/M) services CPT® codes (99358-99359).
• Revalue existing CPT codes describing face-to-face prolonged services.
• Make separate payments using a new code to describe the comprehensive assessment and care planning for patients with cognitive impairment (e.g., dementia).
• Make several changes to reduce administrative burden associated with the chronic care management codes to remove potential barriers to furnishing and billing for these services.
• Make separate payments for codes describing chronic care management for patients with greater complexity (99487-99489).

In addition, Section 218(b) of the Protecting Access to Medicare Act (PAMA) of 2014 establishes a new program under the statute for fee-for-service Medicare to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. In the final rule, CMS identified the first eight priority clinical areas, which includes Cancer of the lung (primary or metastatic, suspected or diagnosed).

CMS estimates the 2017 PFS estimated impact on total allowed charges for hematology/oncology and radiation oncology to be 0%.
We will provide details of both the 2017 Medicare Outpatient Prospective Payment System (OPPS) and Physician Fee Schedule (PFS) final rules in the next Oplinc Best Practices Newsletter.

In the meantime, our most recent newsletter provides details on the MACRA Final Rule and is available on the Oplinc website at under the publications tab or by clicking the links below:

Oplinc’s Best Practice Review Volume 11 Issue 3:
html version: MACRA Final Rule
iBook version: MACRA Final Rule