Recalculated CMS Medicare Physician Fee Schedule Rates for 2021
COVID-19 pandemic hit the world in late 2019 and continued to trouble us all through 2020. Apart from the physical setback, it had a terrible impact on every individual’s social, professional, and psychological well-being. During these challenging times, everything got on hold. Even the biggest of businesses were shut with no positive visibility. This hit the healthcare system too. Even the best of primary healthcare facilities was unsure of keeping themselves open with negligible IPD & OPD.
This concern was raised by nearly 400 medical organizations, including ACR, as they requested Congress to revisit the year-end legislative package and stop the rate cuts. Along with this, more than 300 congress members also wanted to waive off the budget neutrality adjustment in the 2021 Medicare Physician Fee Schedule so as to mitigate or prevent the cuts.
In a December statement, the American College of Radiology (ACR) had said that “While the COVID-19 pandemic rages and wreaks havoc on the health care system, providers continue to contend with overflowing hospitals and the financial impact of the spring-summer government-recommended shutdown of most non-urgent medical care. Against this backdrop, double-digit Medicare cuts will be devastating for patients, communities, and providers.”
Considering the present scenario and to support the healthcare professionals, Congress passed The Consolidated Appropriations Act, 2021 on December 21, 2020, after a COVID-19 stimulus package mitigated budget neutrality cuts finalized in a December rule. As a highlight, the Act ratified a 3.75 % increase in overall Medicare Physician Fee Schedule payments for all providers for 2021.
To reflect the COVID-19 stimulus package changes, CMS updated the Physician Fee Schedule as of January 7. Here are important glimpses:
- 3.75% increase in overall Medicare Physician Fee Schedule payments for 2021
- Suspension of payments for Healthcare Common Procedure Coding System (HCPCS) code G2211 for three years
- Up to 10.2 % cut for certain specialties and services because of a budget neutrality requirement
- Boost rates for E/M (evaluation and management) services that support primary care and chronic disease management
- Suspension of the 2 % payment adjustment for the statutory Medicare sequester through March 31, 2021
- Reinstatement of the 1.0 floor on the work Geographic Practice Cost Index through 2021
- Revision of the conversion factor for the Physician Fee Schedule in 2021 from $32.26 to $34.89
As a surprise in 30 years, this finalized policy has the most significant updates for E/M codes. According to the American Medical Association (AMA), “G2211 (an add-on code for the complexity inherent to evaluation and management (E/M) visits) accounted for about $3 billion, or 3 %, of spending in the Medicare Physician Fee Schedule”. But the finalized policy has reduced the burden of the coding system from doctors and rewarded time to be spent on evaluation and management of patient care. With the delay in implementing the code, there will be a reduction in the budget neutrality adjustment. All this will prevent the significant rate cuts for some specialists and services during the COVID-19 pandemic, as laid out in the 2021 Medicare Physician Fee Schedule final rule.
Also, there is a decrease in the Physician Fee Schedule conversion factor by $3.68 to $32.41. This has been done to reflect a statutory update of 0.00 percent and the adjustment to account for changes in relative value units and expenditures that would result from finalized policies.
To view the revised Consolidated Appropriations Act, 2021, providers can view payment rates in the Downloads section of the CY 2021 Physician Fee Schedule final rule (CMS-1734-F) webpage.
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