Localities Under the Medicare Physician Fee Schedule

Medicare is statutorily required to adjust payments for physician fee schedule services to account for differences in costs due to geographic location. There are 89 different localities that have not been revised since 1997. In the CY 2009 Physician Fee Schedule notice of proposed rulemaking released June 30, 2008, CMS indicated a preliminary study of several options for revising the payment localities would be posted on the CMS Web site. The report entitled "Review of Alternative GPCI Payment Locality Structures," which was produced by Acumen, LLC under contract to CMS, may be found at the following link:
http://www.cms.hhs.gov/PhysicianFeeSched/downloads/ReviewOfAltGPCIs.pdf.

CMS’ study of possible alternative payment locality configurations is in the early stages of development. At this time CMS is not proposing to make any changes to the payment localities. CMS encourages interested parties to submit comments on the options presented in the report as well as suggestions for other options. These comments will be considered in the development of possible future notice and comment rulemaking. When CMS is ready to propose any changes to the locality configuration, extensive opportunities for public comment will be provided (for example, a town hall meeting or open door forum) on specific proposals before implementing any change.