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Last-Minute Changes to Medicare 2021 E/M Reimbursement

The new 2021 E/M Rules have been in effect for a month; have you measured your performance?

By Brian S. Herdman, Operations Manager - Financial Reimbursement

Healthcare providers dependent on the Medicare Physician Fee Schedule (MPFS) had an unusually busy December keeping track of changes for 2021 reimbursement. In a year where pandemic-related public health emergencies spawned many Interim Final Rules and an unusually reduced timeline for Final Rule adoptions, providers who rely on the Medicare Physician Fee Schedule were thrown one last tweak at the end of 2020, but thankfully it was a welcome one.  

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The 2021 Consolidated Appropriations Act contained a number of important stimulus and COVID-19 response provisions, but for the provider community it contained a welcome adjustment to keep payments from significantly changing. The effect of the key MPFS provisions are summarized here:

  • Additional funding and policy changes limited what would have been a 10.6% reduction to the payment conversion factor to only a 3.3% reduction. It has been known that the additional RVU weight for E/M services would shift MPFS reimbursement to those services, but the action taken by Congress limits the decrease to a fraction of what it would have been. Recall that E/M levels are increasing 24% on average and will be paid more in 2021 than in 2020. Other MPFS services decrease 3.3% when RVUs are unchanged from past values.
  • No additional payment for inherently complex E/M visits. This finalized provision was cut by Congress and postponed until 2024.
  • Added donut hole for time-based codes beyond a level five. Providers will need to exceed the top level time for a level-five visit by 15 minutes before beginning to bill for the additional time.

The new 2021 E/M Rules have been in effect for a month; have you measured your performance? Although it may be a limited sample, these first claims are an important measure of how well your group practice or organization is documenting and applying the 2021 standards. At a minimum, physician practices need to review their E/M billings to review unfavorable trends in level assignment and reimbursement. Proactive practices looking deeper into their margins have also scrutinized managed care rates from key payers and reviewed physician compensation for changes to RVU bases.

For additional information contact Brian Herdman at [email protected] or 609-918-0990. 

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