Chester County Medicine Winter 2021 - 7

www.CHESTERCMS.org

2021 Medicare Final Rule:
E/M improvements,
budget neutrality
cuts to payments

I

n the 2021 Medicare Physician Payment Schedule final rule,
the Centers for Medicare & Medicaid Services (CMS) moved
ahead with the adoption of CPT guidelines to report E/M
visits based on either medical decision making or physician time
and to reduce unnecessary documentation starting Jan. 1, 2021.
CMS also adopted recommendations made by the AMA/Specialty
Society RVS Update Committee (RUC), which increase payment
for E/M visits. These coding and payment improvements are the
result of years of significant collaboration across medical specialties.
However, the final 2021 E/M policies differ from the RUC
recommendations in one important respect. Although the surgical
specialties participated in the RUC survey and their data and
vignettes were incorporated into the RUC recommendations,
CMS did not apply the RUC recommended values to the visits
bundled into global surgical payments.
The AMA offers resources to help physicians prepare for getting
the full benefit of the burden relief from the E/M office visit
changes, including a checklist, videos, modules, and guidebooks, as
well as other tools and references.
Unfortunately, by law, significant increases in Medicare
physician payment rates must be offset by across-the-board
decreases. This budget neutrality requirement means that the RUC
recommendations for the office and outpatient E/M visits would
lead to an approximate 5% payment reduction affecting physicians

and other health professionals who provide relatively few office
visits. This reduction was doubled to more than 10% as a result of
other policy changes made by CMS.
Despite the consensus of the AMA and the Federation that the
Administration should waive the budget neutrality impacts of the
Medicare E/M policies in light of the COVID-19 public health
emergency (PHE), CMS did not offer any relief in the final rule.
The CY 2021 physician payment conversion factor is $32.41, a
decrease of $3.68 from the CY 2020 conversion factor of $36.09.
This is a decrease of 10.2%. The CY 2021 anesthesia conversion
factor is $20.04, a decrease of $2.15 from the CY 2020 conversion
factor of $22.20.
The AMA strongly urges Congress to avert the steep cuts due
to budget neutrality as physicians are experiencing substantial
economic hardships due to the COVID-19 PHE. Cuts of this
magnitude are problematic for all services, but the AMA is
extremely concerned that these cuts will directly impact care to
COVID-19 patients, as payments for hospital visits, critical care
visits, nursing home visits and home visits are among those being
slashed.
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WINTER 2021 | CHESTER COUNT Y Medicine 7
Chester County Medicine Winter 2021

Table of Contents for the Digital Edition of Chester County Medicine Winter 2021
