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2016 Medicare Proposed Fee Schedule: A Few Key Provisions


On July 8, the Centers for Medicare and Medicaid Services (CMS) issued a proposed rule updating payment policies, payment rates, and quality provisions for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2016. The proposed rule implements several policies mandated under the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) back in April, the same legislation that fixed the flawed Sustainable Growth Rate formula.

Among the many provisions of the proposed fee schedule, the following items are among those most noteworthy for the coming year.

Advance Care Planning

CMS is proposing to establish payment rates for two advance care planning services provided to Medicare beneficiaries in addition to the current “Welcome to Medicare” visit where those service currently can be reimbursed. Advance care planning helps patients make important decisions about the type and timing of the care they receive, and establishing separate payment for the services allows beneficiaries and practitioners greater opportunity and flexibility to utilize them at the most appropriate time for patients and their families.

The American Medical Association CPT Editorial Panel and the AMA Relative Value Update Committee (RUC) recommended new CPT codes and associated payment amounts for calendar year 2015. However, CMS did not make the new codes payable for 2015 in order to allow the public full opportunity to comment on whether Medicare should pay separately for these services and, if so, how much beginning January 1, 2016.


The guidelines to successfully report or participate in the Physician Quality Reporting System (PQRS) for the 2016 reporting year (affecting 2018 payments) remain largely the same. One change is that group practices using the GPRO option will now be able to choose the Qualified Clinical Data Registry reporting option, which was previously available only to providers who reported as individuals.

As well, more than 40 new individual measures are proposed across all reporting options, including four new cross-cutting measures. As well, three new measures groups (registry only) and one new GPRO web measure is included in the proposed rule.

Finally, under MACRA, PQRS is set to expire with the 2016 reporting year (affecting 2018 payments). The Merit-Based Incentive Payment System (MIPS), mandated through MACRA, will replace PQRS and other Medicare quality programs beginning with the 2017 reporting year (affecting 2019 payments)

Appropriate Use Criteria for Advanced Imaging Services

In the 2014 Protecting Access to Medicare Act (PAMA), Congress required that providers who order advanced diagnostic imaging services must consult with appropriate use criteria via a clinical decision support mechanism specified by CMS not later than November 15, 2015. PAMA also requires CMS to take other steps toward collecting information on claim forms and ultimately developing a prior authorization program by January 1, 2020.

In the proposed rule, CMS provides definitions for the statute and establishes a process by which the agency will identify clinical areas of priority, specify appropriate use criteria, and lay out a timeline to accomplish these goals.

Value-Based Payment Modifier

For the 2016 reporting year (affecting 2018 payments), CMS will now include several non-physician practitioners (NPPs) in the Value-Based Payment Modifier (VBPM) program: PAs, NPs, CNSs, and CRNAs. As in the past, those providers newly introduced to the program will be held harmless from downward adjustments, but that provision applies only to those providers who practice as solo NPPs or those who are in a group of only NPPs. Any solo physician or group of two or more physicians and/or NPPs will be subject to upward or downward payment adjustments based on their ratio of quality to cost as compared to other providers in the Medicare program.

CMS did hold steady the adjustment factors and percentages for the upward or downward payment adjustments to +2.0x and -2.0 percent for solo practitioners and groups up to nine providers and +4.0x and -4.0 percent for groups of 10 or more providers.

Like PQRS, the VBPM program is set to expire with the 2016 reporting year (affecting 2018 payments) to be replaced by MIPS.

Potentially Misvalued Codes

The Affordable Care Act (ACA) instructed CMS to identify “misvalued codes” in the Physician Fee Schedule, and PAMA mandated a target for adjustments to misvalued codes in the fee schedule for calendar years 2017 through 2020, with a target amount of 0.5 percent of the estimated expenditures under the PFS for each of those four years. Subsequently, the Achieving a Better Life Experience Act of 2014 (ABLE) accelerated the application of the target by specifying it would apply for calendar years 2016 through 2018, and increasing the target to 1 percent for 2016.

In the 2016 proposed rule, CMS is introducing a methodology for the implementation of this provision, which includes how net reductions in misvalued codes would be calculated. Based on that methodology, CMS has identified changes that achieve 0.25 percent in net reductions. Within that methodology is a review of high expenditure services across specialties with Medicare allowed charges of $10,000,000 or more. Look for CMS to make further misvalued code changes in the final rule as they move closer to the statutory goal of 1 percent.

For more information, review the CMS Fact Sheet about the Proposed Fee Schedule, or view the Proposed Fee Schedule in its entirety.

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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