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Significant E/M Changes Coming to 2021 Office Visit Services in Medicare Physician Fee Schedule

E/M reimbursement is changing in 2021 for physician office visits. This article features many of the key updates for work RVUs and the Medicare conversation factor.

By Brian Herdman, Operations Manager - Financial Reimbursement Services and Rupal Trivedi, CPC, CPMA, Manager - Physician Services

After years of various proposals and comment periods, the Centers for Medicare and Medicaid Services (CMS) will finally implement changes in January 2021 to the Medicare Physician Fee Schedule (MPFS) that will have a notable impact on reimbursement for professionals across all disciplines.  CMS adopted the recommendation of the American Medical Association (AMA) to both partially redefine the billing codes used for Evaluation and Management (E/M) office visits and increase the work relative value unit (wRVU) weights that determine Medicare payments.  The impact is significant: CMS projects a 28% increase in office and outpatient E/M wRVUs across all MPFS.

The effect of E/M RVU increases is budget-neutral to the remainder of the Medicare Physician Fee Schedule population.  As a result, the conversion factor has decreased from $36.0896 to $32.2605 (-10.6%), the biggest drop since the Sustainable Growth Rate wreaked havoc a decade ago.  Professionals with many office/outpatient E/M services will see an increase from RVU-based payments; however, surgeons and other procedure-dependent professionals will have a marginal decrease in payment.  Physicians, group practices, and the systems they work with will need to anticipate a host of potential downstream effects.

From the very first Medicare Physician Fee Schedule proposed rule in 2017, CMS, under Seema Verma, has solicited feedback on how to implement their “Patients over Paperwork” initiative to the benefit of primary care physicians.  CMS argued that medical professionals spend far more time on record keeping than current reimbursement levels presume, and in response the AMA’s various working groups surveyed their membership to log their time when providing typical services.  Eventually, the AMA Relative Value System Update Committee released in the spring of 2019 what will be implemented in 2021. In their report, the committee outlined several major changes to the core E/M CPT codes:

  • Elimination of level 1 for new patients, and change of level 1 for established patients to be a charge for supervision that might not require a professional’s presence.
  • Changes to Medical Decision Making (MDM) that de-emphasizes the history and physical portion of the visit, and builds off established concepts such as:

- Number and complexity of problems addressed
- Amount and/or complexity of data to be reviewed and analyzed
- Risk of complications and/or morbidity or mortality of patient management

      • Time standards are available for professionals to use as an alternative to documentation – however physicians will still need to document key elements of the visit
      • New add-on codes for prolonged care (additional time) and primary care
      • Increased wRVUs based on an increase in AMA time studies
      • 99283-99285: Emergency Department E/M, levels 3-5
      • 90791-90792: Psychiatric Diagnostic Evaluation
      • 90832, 90834, 90837: Psychotherapy 30 – 60 minutes
      • Miscellaneous physical, occupational, and speech therapy evaluations

      CMS has proposed to adopt all of these changes, and to increase wRVUs an additional 28% in other areas that overlapped with AMA’s increase to office E/M, in particular:

      Table: Notable changes to RVU’s in 2021 Medicare Physician Fee Schedule

      EM Table 2021 Change.png

      Because providers will have the option to keep billing practices consistent with 1997/1995 E/M selection criteria, many providers can keep the same electronic health record (EHR) tools currently in use. However, those providers wishing to take advantage of new MDM methodologies, add-on codes, or time-based standards will have to work to revamp EHR screens for the new work flow, and educate professionals on the revised flow.  Encounters for some specialties may be more advantageous under 2021 guidelines, and it will be up to each specialty group to measure the benefits of the revised methodology against a “typical” patient encounter.

      In addition to the new documentation and education considerations, practice managers will need to consider a number of downstream impacts from the AMA and CMS changes.  Physician compensation agreements with a wRVU basis will be affected, perhaps unevenly between physician specialties.  Furthermore, metrics tied to work RVUs will change significantly and analytics will need to compensate for trending.  Finally, managed care payers may not be quick to update rates to reflect AMA’s new RVUs, creating a point of negotiation to be addressed in the near future.

      2020 continues to be a year of significant change across the healthcare industry.  For medical professionals, these long-awaited changes come on top of shifts in volume and telehealth services.  Those group practices that have analyzed their volume to understand the coming impact will be on firmer footing, as they will be able to separate the unexpected from the expected as various facets of these wRVU changes are integrated into the revenue cycle.

      CBIZ KA Consulting Services has been assisting hospitals during this E/M transition period, from financial modeling of the new regulations to providing E/M review services, focusing on documentation compliance and revenue assurance.  For any questions about CBIZ’s E/M services, please contact Adam Abramowitz at aabramowitz@cbiz.com or at 609-220-5627.

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