2021 physician reimbursement trends

The addition of telehealth services and a reduction in the conversion factors are just two changes independent physicians will see in the coming year. These 2021 physician reimbursement trends are reflected in the Physician Fee Schedule (PFS) recently published by the Centers for Medicare & Medicaid Services (CMS) as well as in changes implemented by many private payers.

In general, CMS payments are based on the relative resources typically used to furnish the service. These relative value units (RVUs) are applied to each service for physician work, practice expense, and malpractice. RVUs become payment rates through the application of a conversion factor. Payment rates are then calculated to include an overall payment update specified by statute.

CMS announced that the conversion factor will be reduced in 2021, to account for changes in RVUs, including significant increases for E/M visit codes. The final CY 2021 PFS conversion factor is $32.41, a decrease of $3.68 from the CY 2020 PFS conversion factor of $36.09.

One shift occurring in the new year is reflected in those evaluation and management (E/M) codes. There is no longer an E/M requirement for a specific level of history and exam. The new guidelines states that history and exam are only required to be relevant and pertinent based on the reason for the visit, focusing on the level of medical decision or time as defined by the code.

In response to the public health emergency (PHE) around the COVID-19 pandemic, CMS and many other private payers are increasing the scope of their telehealth reimbursement policies. For CY 2021, CMS has added to the Medicare telehealth list on a Category 1 basis, many services that are similar to those already on the telehealth list, including:

  • Group Psychotherapy (CPT code 90853)
  • Psychological and Neuropsychological Testing (CPT code 96121)
  • Domiciliary, Rest Home, or Custodial Care services, Established patients (CPT codes 99334-99335)
  • Home Visits, Established Patient (CPT codes 99347-99348)
  • Cognitive Assessment and Care Planning Services (CPT code 99483)
  • Visit Complexity Inherent to Certain Office/Outpatient Evaluation and Management (E/M) (HCPCS code G2211)
  • Prolonged Services (HCPCS code G2212)

In addition, a third temporary category of criteria has been added for Medicare telehealth services during the PHE that will remain on the list throughout the 2021 calendar year or until the end of the calendar year in which the PHE comes to an end.

Elation Health has the resources you need to successfully provide telehealth services to your patients. Learn more here.

2021 physician reimbursement trends also include a revaluation of the code sets that include, rely upon, or are analogous to office/outpatient E/M visits commensurate with the increases in values that CMS finalized for office/outpatient E/M visits for CY 2021:

  • End-Stage Renal Disease (ESRD) Monthly Capitation Payment (MCP) Services
  • Transitional Care Management (TCM) Services
  • Maternity Services
  • Cognitive Impairment Assessment and Care Planning
  • Initial Preventive Physical Examination (IPPE) and Initial and Subsequent Annual Wellness Visits (AWV)
  • Emergency Department Visits
  • Therapy Evaluations
  • Psychiatric Diagnostic Evaluations and Psychotherapy Services

Changes to the PFS for 2021 also include reimbursement considerations for direct supervision as it relates to interactive technology, payment for teaching physicians, and clarification on medical record documentation. The final rule also provides clarification on the implementation of Section 2005 of the Substance Use-Disorder Prevention that Promotes Opioid Recovery and Treatment (SUPPORT) for Patients and Communities Act, which creates a new Medicare Part B benefit for Opioid Treatment Programs.

The general consensus for 2021 is that, although value-based is expected to continue growing as more payers embrace the concept, fee-for-service is not going away anytime soon. However, those independent physicians who have the data to show they are improving quality, improving efficiency, and delivering higher quality outcomes with lower costs will be better positioned to negotiate reimbursement-based contracts in 2021 and in the years to come.