Final Rule Changes to the 2017 Medicare Physician Fee Schedule

Final Rule Changes to the 2017 Medicare Physician Fee Schedule

American Academy of Audiology Analysis

On November 2, 2016, the Centers for Medicare & Medicaid Services (CMS) issued the Revisions to Payment Policies under the Physician Fee Schedule, Clinical Laboratory Fee Schedule and Other Revisions to Part B for CY 2017 final rule. The final rule addresses adjustments to the Medicare physician fee schedule (MPFS) and other Medicare Part B payment policies to reflect changes in medical practice and the relative value of services, as well as changes in the statute. The finalized changes will go into effect on January 1, 2017. The Academy has prepared a list of payment rates by CPT code for audiology procedures covered under the fee schedule:  CY 2017 and  CY 2016 rates for reference along with helpful fee calculation definitions. The Academy has also prepared an analysis of the final rule below and will continue to add to this review and update our membership as more information becomes available.

The final rule includes updates to the Medicare Shared Saving Program, the Value Modifier, requirements for Medicare Advantage (MA) Provider Networks, the release of certain pricing data from MA bids and medical loss ratio reports, and expansion provisions of the Medicare Diabetes Prevention Program model. For more information, view CMS' Fee Schedule Fact Sheet. Andy Slavitt, CMS Acting Administrator, also released a blog post entitled "A Healthier Medicare: Focusing on Primary Care, Mental Health, and Diabetes Prevention" that explains the Agency's intent behind key provisions.

CMS Finalizes Conversion Factor of $35.8887 for CY 2017

In April 2015, Congress passed the Medicare Access and CHIP Reauthorization Act (MACRA), which eliminated the flawed sustainable growth rate (SGR) formula. MACRA also established a 0.5 percent update factor for calendar years 2015 through 2025. For CY 2017, CMS determined the MPFS conversion factor to be $35.8887, which reflects a budget neutrality adjustment of 1.0050, the 0.5 percent update factor specified under MACRA, and a 0.993 change due to the non-budget neutral 5 percent Multiple Procedure Payment Reduction (MPPR) for the professional component of imaging services. The CF for CY 2017 is relatively close to the CF for CY 2016 which is $35.8279.

Quality Payment Program

On October 14, 2016, the US Department of Health and Human Services issued a final rule to implement key provisions of MACRA and establish a new Quality Payment Program (QPP) to reward providers for providing high-quality care instead of paying them only for the number of tests or procedures provided. This represents a shift from a fee-for-service to a value-based payment system. These provisions include parameters for the Merit-based Incentives Payment System (MIPS) and Advanced Alternative Payment Models (APMs) which serve as reimbursement pathways for providers. These two parameters connect payment to performance on quality measures, cost, and resource use, advancing care information, and improvement activities. 

To make the transition to quality reporting under MIPS, PQRS will sunset in the performance year of 2017. This means that 2016 is the final year in which providers will be required to participate in the PQRS program. The year 2017 marks the first performance year for MIPS, with payment adjustments being distributed in 2019. It is important to note that audiologists are not eligible for participation in MIPS in the first two years (2017, 2018). The Secretary of HHS has the authority to include other professionals, including audiologists, beginning in 2019. This means that audiologists will not be required to report on anything, including PQRS, in 2017, but will have the option to "practice" reporting on measures through MIPS. The Academy, in conjunction with the Audiology Quality Consortium (AQC), will provide more information on voluntary reporting in the coming months, as the groups continue to review the MACRA final rule. Click here for more details on the new Quality Payment Program and its impact on audiology.

These changes are set to take effect on January 1, 2017, so audiologists are still advised to continue their PQRS reporting through the end of 2016. Visit the Academy's PQRS page for information on 2016 reporting.

Requirement of Medicare Enrollment for Providers Furnishing Services to MA Enrollees

The final rule requires health care providers and suppliers to be screened and enrolled in Medicare to contract with a Medicare Advantage (MA) organization to provide items and services to beneficiaries enrolled in MA health plans. According to CMS, this final rule creates consistency with CMS's current health care provider and supplier enrollment requirements for all other Medicare (Part A, Part B, and Part D) programs. Out-of-network or non-contract providers and suppliers, however, are not required to enroll in Medicare to meet the requirements of this final rule with respect to furnishing items and services to MA enrollees. As part of these changes, the enrollment provisions would be included in CMS contracts with the designated plans and programs. Plans that do not meet these requirements may be subject to contract actions ranging from intermediate sanctions to contract termination. These provisions will begin two years after the publication of this final rule and will be effective on the first day of the plan year.

The Academy supported this proposal in our MPFS proposed rule comments for CY 2017.

Potentially Misvalued Services Under the Physician Fee Schedule

CMS is required to periodically identify potentially misvalued services using certain criteria and to review and make appropriate adjustments to the relative values for those services. CMS is also needed to develop a process to validate the relative value units (RVUs) of certain potentially misvalued codes under the MPFS. For CY 2017, CMS is finalizing the use of the proposed screen for 0-day global services that are typically billed with an Evaluation and Management (E/M) service with Modifier 25 as a mechanism for identifying services that are potentially misvalued. One of these codes identified through this screen is G0268 Removal of impacted cerumen (one or both ears) by a physician on the same date of service as audiologic function testing. CMS does not separately reimburse audiologists for cerumen removal but reimburses physicians using G0268 or 69210 Removal of impacted cerumen (separate procedure), 1 or both ears. The Academy will closely monitor the review of G0268.

Expansion of the Diabetes Prevention Program Model

CMS is finalizing its proposal to expand the duration and scope of the Diabetes Prevention Program, which CMS is referring to as the Medicare Diabetes Prevention Program (MDPP) expanded the model, into Medicare beginning January 1, 2018. Through its expansion, more Medicare beneficiaries would be able to access the benefits of the DPP, which could lead to the prevention of diabetes, improved health, and reduced cost. The Academy will continue to review the changes outlined in the final rule and look for future opportunities for participation by audiologists.

Additional Information

The Academy will update this analysis as more information becomes available. We will also include any updates in the Audiology Today Weekly E-newsletter.


The Academy continues to monitor CMS Medicare Part B policies, provide commentary, and meet with CMS at Agency headquarters as necessary to advocate for the profession of audiology.

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