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CMS-1403-FC
B. Geographic Practice Cost Indices (GPCI): Locality
Discussion
1. Update
Section 1848(e)(1)(A) of the Act requires us to
develop separate Geographic Practice Cost Indices (GPCIs)
to measure resource cost differences among localities
compared to the national average for each of the three fee
schedule components (work, PE and malpractice). While
requiring that the PE and malpractice GPCIs reflect the
full relative cost differences, section 1848(e)(1)(A)(iii)
of the Act requires that the physician work GPCIs reflect
only one-quarter of the relative cost differences compared
to the national average.
Section 1848(e)(1)(C) of the Act requires us to review
and, if necessary, adjust the GPCIs at least every 3 years.
This section also specifies that if more than 1 year has
elapsed since the last GPCI revision, we must phase in the
adjustment over 2 years, applying only one-half of any
adjustment in each year. As discussed in the CY 2008 PFS
final rule with comment period (72 FR 66243), we
established new GPCIs for each Medicare locality in CY 2008
and implemented them. The CY 2008 adjustment to the GPCIs
reflected the first year of the 2-year phase-in.
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