2016 Medicare Physician Fee Schedule Final Rule Annotated Summary - McDermott+Consulting

2016 Medicare Physician Fee Schedule Final Rule Annotated Summary

The final rule goes into effect on January 1, 2016, with comments due by December 29, 2015. This article details the key changes implemented by the ruling.


The Medicare Program; Revisions to Payment Policies Under the Physician Fee Schedule and Other Revisions to Part B for CY 2016 (CMS-1631-FC) was published in the Federal Register on November 16, 2015. This final rule with comment period updates payment policies and payment rates for services furnished on or after January 1, 2016. The rule also finalizes changes to several of the quality reporting initiatives that are associated with the Medicare Physician Fee Schedule (PFS) payments, including the Physician Quality Reporting System (PQRS), the Physician Value-Based Payment Modifier (Value Modifier) and the Medicare Electronic Health Record (EHR) Incentive Program, as well as changes to the Physician Compare website on Medicare.gov.

This is the first PFS final rule since the repeal of the Sustainable Growth Rate formula by the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). The 2016 final rule updates the relative value unit (RVU) methodology, a fee-for-service (FFS) – based reimbursement formula for Medicare physician services that has been in place since 1992. Yet through provisions related to the implementation of various physician performance initiatives, such as PQRS and the Value Modifier, it also reflects the broader and forward-looking efforts of the Centers for Medicare and Medicaid Services (CMS) and the Administration to move towards a more value-based healthcare system.

The provisions of this final rule with comment period are effective on January 1, 2016, except when noted. Comments are due by December 29, 2015.

To read our fully annotated summary, click here.