The Centers for Medicare and Medicaid Services releases 2017 physician fee schedule

The agency’s final rule explains increases and reductions in 2017 payments, and reveals new behavioral health service codes.

The Centers for Medicare and Medicaid Services (CMS) released the final rule on the 2017 Medicare physician fee schedule, providing information on next year’s payment changes and coverage for new services.

Under the final rule, all healthcare providers next year will receive a 0.5 percent increase in their payments before reductions are applied to Medicare charges. After the increase, providers will lose 2 percent on their Medicare reimbursements because of sequestration, the automatic budget cuts put in place by Congress since 2013.

Additionally, psychologists who did not successfully report measures under the Physician Quality Reporting System (PQRS) in 2015 will lose an extra 2 percent on all of their Medicare charges.

CMS projects there will be no impact on psychologists’ payments due to relative value changes to work, practice expense or malpractice expense for the codes psychologists typically bill.

The adjustments are in line with provisions included in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA). By removing the Sustainable Growth Rate from the payment formula, MACRA protects psychologists who treat Medicare beneficiaries from facing huge reductions in payment each year. In October, CMS released its final rule on MACRA detailing Medicare’s new payment models.

New codes added and created

The 2017 fee schedule also includes several new service codes related to behavioral health. Temporary codes were added to capture services under the Psychiatric Collaborative Care Model (CoCM) in which a primary care team consisting of a primary care provider and a care manager work in collaboration with a psychiatric consultant, such as a psychiatrist.

Psychologists cannot bill the codes created for this model (G0502, -03, and -04) because the services involve evaluation and management (E/M), but they can provide behavioral care management services. The American Medical Association is expected to add permanent codes for CoCM services to the 2018 CPT manual.

The agency created a new temporary code, G0505, for services offered by physicians or other healthcare professionals such as  nurse practitioners or physician assistants, to assess and create a care plan for beneficiaries with cognitive impairment. Although CMS acknowledged the work of psychologists and neuropsychologists in treating beneficiaries with cognitive impairment, the agency views G0505 as a service that must be performed by the billing practitioner subject to established evaluation and management guidelines.

CMS is also adding a code, G0507, for other models of care related to behavioral health integration (BHI). However, the agency is limiting direct billing of this code to physicians and other health care professionals who can provide the BHI initiating visit, something CMS maintains is not within a psychologist’s scope of practice. While CMS expresses interest in adding more codes for services by psychologists and social workers, any new codes would have to be under a different construct because of BHI’s link to E/M services.

CMS’s long-standing prohibition against psychologists billing for E/M services continues to thwart psychologists’ efforts to fully participate in behavioral health integration. As Medicare expands integrated care under MACRA the Practice Organization will continue to work with CMS on ways that psychologists can best participate in new integrated care models.

Other changes

CMS declined to add the psychological and neuropsychological testing codes to its list of telehealth services, a decision the Practice Organization supports. Successful completion of the tests requires the psychologist to closely observe the patient’s response, something that cannot be done through telehealth.

CMS is also finalizing its proposal to expand the current Medicare Diabetes Prevention Program (MDPP) model which aims to prevent the onset of type 2 diabetes among beneficiaries who have been diagnosed with prediabetes. The expanded model will include services furnished in community and health care settings by coaches who might be trained community health workers or health professionals CMS states in the final rule that nonphysician practitioners, such as psychologists, can order or refer eligible beneficiaries for MDPP services. Psychologists who treat patients with diabetes using health and behavior services would not be affected by the expanded MDPP model.


For more information on the fee schedule or other advocacy efforts, contact the Practice Organization Government Relations Office via email or by phone at (202) 336-5889.