2017 Physician Fee Schedule Final Rule (MPFS) Sets Conversion Factor at $35.8887

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  • November 9, 2016
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The Centers for Medicare & Medicaid Services (CMS) has released the Medicare Physician Fee Schedule (MPFS) 2017 Final Rule, which sets the MPFS conversion factor at $35.8887 (up slightly from $35.8279 in 2016). The conversion factor accounts for a a budget neutrality adjustment of 1.0050, a 0.5 percent update factor required by MACRA, and a slight downward change due to the non-budget neutral 5 percent Multiple Procedure Payment Reduction (MPPR) for the professional component of imaging services.
Other significant changes under the final rule, to be enacted Jan. 1, 2017, include:

Quality Payment Programs

The coming year (2017) will be the first performance year for Merit-based Incentives Payment System (MIPS), as described in the U.S. Department of Health and Human Services (HHS) October 14, 2016 final rule. The MPFS final rule finalizes changes to align with the policies adopted for MIPS and Alternative Payment Models (APMs), and:

  • finalizes a policy to streamline the quality validation audit process and, absent unusual circumstances, to use the results to modify an ACO’s overall quality score;
  • finalizes revisions to references to the Quality Performance Standard and Minimum Attainment Level;
  • revises policies regarding the application of flat percentages to provide that measures calculated as ratios are excluded from use of flat percentages when such benchmarks appear “clustered” or “topped out”;
  • modifies Physicial Quality Report System (PQRS) alignment rules to permit flexibility for EPs to report quality data to PQRS to avoid the PQRS and VM downward adjustments for 2017 and 2018 in cases where an ACO fails to report on their behalf;
  • updates the assignment methodology to include beneficiaries who identify ACO professionals as being responsible for coordinating their overall care.

Less Burdensome Chronic Care Management

CMS believes that chronic care management (CCM) services may be underutilized, and is proposing changes to increase utilization and to pay for CCM services for more complex patients. Medicare has made several changes to reduce the administrative burden of CCM, such as removing the requirement for a written consent for patient enrollment, eliminating that beneficiaries have access 24/7 to the care plan as a condition of payment, and removing an initiating visit requirement for patients who seen within the past year.


CMS expanded coverage for telehealth services including: End-stage renal disease (ESRD) related services for dialysis; advance care planning services; and critical care consultations furnished via telehealth using new Medicare G-codes. CMS “expect[s] these changes to increase access to care in rural areas, based on recent utilization of similar services already on the telehealth list, [CMS] estimate[s] no significant impact on PFS expenditures from the additions relative to overall PFS expenditures.”

Expanded Diabetes Prevention Program Model

CMS expands the duration and scope of the Diabetes Prevention Program, or Medicare Diabetes Prevention Program (DPP), beginning January 1, 2018. Medicare beneficiaries will be able to access the benefits of the program, which may prevent diabetes, improve health, and reduce cost.

Reduced Burden for Global Package Reporting

Following instructions from Congress to collect data to assess the resources used in furnishing pre- and post-operative care, CMS finalized a data collection strategy for global services to reduce the reporting burden associated with the proposed rule. Claims reporting of post-operative visits will be required only for high volume/high cost procedures instead of all global services. High volume/high cost procedures are those furnished by more than 100 practitioners, and are either furnished more than 10,000 times or have allowed charges of more than $10 million annually. Additionally:

  • 99024 will be used to report post-operative visits instead of the proposed global surgery codes (G-codes).
  • Reporting will only be required for a sample of practitioners in practices of 10 or more in specified states.
  • Practitioners who are required to report would need to do so for services furnished on or after July 1, 2017.
  • Teaching physicians will be subject to the reporting requirements in the same way as other physicians and should use the GC or GE modifier as appropriate to indicate the involvement of residents.

Medicare Enrollment Required for Providers Servicing MA Enrollees
This final rule requires providers or suppliers that furnish health care items or services to a Medicare enrollee who receives Medicare benefit through an MA organization to be enrolled in Medicare and be in an approved status. The term “MA organization” refers to both MA plans and MA-PD plans (MA plans that provide drug coverage. Out-of-network or non-contract providers and suppliers are not required to enroll in Medicare to meet the requirement.
Keep an eye on this blog and AAPC’s Healthcare Business Monthly magazine for more, in-depth information on these and other aspects of the Final Rule, in the weeks and months ahead.

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John Verhovshek
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John Verhovshek, MA, CPC, is a contributing editor at AAPC. He has been covering medical coding and billing, healthcare policy, and the business of medicine since 1999. He is an alumnus of York College of Pennsylvania and Clemson University.

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