Medicare Bonuses for Primary Care Expire Dec. 31

Primary care doctors who see a high volume of Medicare patients need to brace themselves for a pay cut starting Jan. 1, 2016. A provision in the Affordable Care Act that provided Medicare payment bonuses to primary care physicians is expiring on Dec. 31. That means some Texas physicians will lose hundreds of thousands of dollars with the extinction of the Centers for Medicare & Medicaid Services (CMS) Primary Care Incentive Payment Program (PCIP), which aimed to narrow the gap in Medicare payments between primary care physicians and specialists.

To receive the quarterly incentive payments, which began in 2011, physicians' primary care services (CPT codes 99201 through 99215 and 99304 through 99350) had to account for at least 60 percent of their total allowed charges under the physician fee schedule in the calendar year. Eligible physicians include those with a Medicare specialty designation of family medicine, geriatrics, pediatrics, and internal medicine.

According to CMS, incentive payments are equal to 10 percent of the Medicare paid amount for primary care services. In 2012, the most recent year of available data, Medicare paid more than $664 million to about 170,000 eligible PCIP practitioners, who each received an average of $3,938, per a report last year by the Medicare Payment Advisory Commission. CMS reports health professionals, including nurse practitioners, physician assistants, and clinical nurse specialists, practicing in urban and rural areas of Texas received PCIP payments totaling $43.6 million in 2012.

One family physician who contacted TMA, said his 13-physician practice expects to lose $100,000 in Medicare payments next year due to the elimination of PCIP.

Medicare Payment for Doctors Not Looking Good in 2016

The Medicare Access and CHIP Reauthorization Act (MACRA), also known as the "doc-fix" bill, completely eliminated the old Sustainable Growth Rate (SGR) budgetary formula that threatened us with large fee cuts every January for the past 15 years. That's the good news. The bad news is: 

  • The new required fee updates are not adequate to cover increasing costs; and;
  • While we were scrambling every year to convince Congress to appropriate some money to avoid those steep SGR cuts, we accepted some provisions in those temporary doc-fix bills that are now coming back to bite us.

One of those provisions from a 2014 bill is now causing a fee cut instead of the small increase that MACRA required for Jan. 1, 2016. Instead of the MACRA-required fee update of one-half of 1 percent, physicians will get a cut of about half that size. The 2016 conversion factor will be $35.8279, down from $35.9335 in 2015. This produces a cut of about 20 cents in the fee for a midlevel office visit (code 99213).

Overall, Medicare fees are not improving, and compliance to avoid penalties is adding cost for physicians. Further congressional action will be required to improve the situation.  

Other factors affecting 2016 fees are: 

  • The extension of the work geographic practice cost index (GPCI) until 2017, raising fees by a few percent in three Texas payment localities.
  • Various relative value unit (RVU) fee revisions.
  • Expiration of the 10-percent primary care bonus, effective Jan. 1, 2016.
  • Possible effect of the value-based payment modifier on practices with 10 or more eligible providers.
  • Possible application of meaningful use and Physician Quality Reporting System penalties, even for nonparticipating physicians.
  • The continuation of the 2-percent sequestration. 

Action, Dec. 15, 2015

Last Updated On

April 19, 2018

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