Medicare Payments

AAN strongly supports the inclusion of advance care planning codes in the 2016 Medicare Physician Fee Schedule proposed rule. The AAN has continuously advocated for this coverage and was a part of the process to define and value these codes. 

Total Medicare allowed charges for neurology are slated to be neutral in 2016.

2016 Physician Fee Schedule
2015 Physician Fee Schedule
SGR Repeal Legislation

On March 26, 2015 the House voted to eliminate the sustainable growth rate (SGR) formula. The Senate has held up their vote until Congress returns from its Easter recess the week of April 13. The current SGR patch was scheduled to expire on April 1, 2015; however, Medicare claims for services rendered after April 1 will not be affected before the results of the Senate vote due to the fact that Medicare contractors—by statue—cannot pay on claims until at least 14 days after submission. Read more in Capitol Hill Report.

Details of the SGR Repeal Legislation

The legislation (H.R. 2 of the 114th Congress) permanently repeals the SGR and replaces the formula with a new mechanism to control Medicare’s spending for physician services. This new mechanism ties Medicare’s payments for services provided by physicians to physician performance in a new quality program called the merit-based incentive payment system (MIPS). The MIPS consolidates all three current Centers for Medicare and Medicaid (CMS) programs: the Physician Quality Reporting System (PQRS), Value-based Payment Modifier, and Meaningful Use into one program. MIPS would be implemented in 2019.

Under MIPS, CMS will calculate a composite score based on physician performance in each of the following categories: 

  • Quality
  • Resource use
  • Clinical practice improvement activities
  • Meaningful use of certified EHR technology

Each physician’s composite score will be compared to a performance threshold. The value of the threshold will be equal to a measure of central tendency (either a mean or a median) describing the distribution of all composite scores of all professionals. If your score is above the threshold, you will receive a bonus. If your score is below the threshold, you may receive a cut in reimbursement. Cuts will be capped at four percent in 2019, five percent in 2020, seven percent in 2021, and nine percent in 2022.

 Physicians who participate in Alternative Payment Models (APMs) and receive a substantial portion of their revenue from APMs will not be subject to MIPS. In addition, these physicians will receive a 5 percent bonus from 2019-2024.

Until MIPS is implemented in January of 2019, physicians will see stable annual updates of 0.5 percent. Here is a schedule for updates under the new system: 

  • Update from January through June of 2015 will be 0.0 percent in lieu of the update that would otherwise apply for 2015.
  • Update for July through December 2015 will be 0.5 percent, and then annually through 2019.
  • Update for 2020 through 2025 will be 0.0 percent. The rates in 2019 will be maintained through 2025, but physicians will receive payment adjustments through the MIPS.
  • Update for 2026 and subsequent years: In 2026, CMS will introduce a second conversion factor for physicians who participate in alternative payment models (APM). For 2026 and each subsequent year, the update to the qualifying APM conversion factor will be 0.75 percent, and the update to the no qualifying APM conversion factor will be 0.25 percent. 

    Medicare fee for service claims with dates of service or dates of discharge on or after April 1, 2013, will incur a two-percent reduction in Medicare payment.

    Claims for durable medical equipment (DME), prosthetics, orthotics, and supplies, including claims under the DME Competitive Bidding Program, will be reduced by two percent based upon whether the date of service, or the start date for rental equipment or multi-day supplies, is on or after April 1, 2013.

    Beneficiary payments for deductibles and coinsurance are not subject to the two percent payment reduction BUT Medicare's payment to beneficiaries for unassigned claims is subject to the cut.

    The sequestration, resulting from the Budget Control Act of 2011, was postponed by the American Tax Payer Relief Act of 2012. The two percent Medicare cut is part of broader cuts, including automatic spending cuts to national defense and other non-defense budget, to eliminate a total of $1.2 trillion from the federal budget over the next decade.

    Read the FAQ on Sequestration from the American Medical Association.

    Release of Physician Payment Data

    In May 2015, CMS published physician-identifiable data about services provided to Medicare beneficiaries. The data includes information about payment made to physicians, number of provided services, and billed codes. Anyone can search the data file to see the amounts paid to each FFS Medicare provider.


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