In epic reversal, CMS proposes nixing blended E/M payment rate
Grant Huang, CPC, CPMA
Director of Content
CMS had seemingly finalized its decision to create a single, “blended” payment rate for outpatient E/M code levels 2 to 4, set to take effect Jan. 1, 2021 – this was arguably the most explosive provision in its 2019 Medicare Physician Fee Schedule (PFS) final rule. Now, in a complete about-face, the agency proposes to eliminate the blended rate and continue with separate payment rates for each code level in 2021.
The rationale for this dramatic reversal was a flood of objections from physician groups, including the AMA, which created a working group to develop its own reforms to the E/M codes.
“Many stakeholders have continued to express objections to our assignment of a single payment rate to level 2-4 office/outpatient E/M visits stating that this inappropriately incentivizes multiple, shorter visits and seeing less complex patients,” CMS writes in the 2020 PFS proposed rule.
There were also objections to CMS creating new HCPCS add-on codes for primary care and specialty E/M visits that would increase reimbursement above the blended E/M payment. The value of these add-on codes was low, as little as $7 based on some projections, and they would be accompanied by the usual confusion associated with new add-on codes, only this time the change would be widespread because all providers and specialties bill E/M codes.
“Many stakeholders also stated that the purpose and use of the HCPCS add-on G codes that we established for primary care and nonprocedural specialized medical care remain ambiguous … and asserted that Medicare’s coding approach is unlikely to be adopted by other payers,” CMS writes in its 2020 proposed rule.
Now what? Looking at the current 2021 proposal
Having absorbed these critiques of its finalized policy, CMS decided to change course and follow the AMA, which had already begun planning revisions to the E/M chapter of its CPT Manual for 2021 to align with the CMS changes. “Consistent with our goals of burden reduction, we are proposing to align our E/M coding with changes laid out by the CPT Editorial Panel for office/outpatient E/M visits,” CMS writes in an analysis accompanying the 2020 proposed rule.
Here’s what CMS proposes for 2021, bearing in mind that the agency has several more opportunities to change its mind, beginning with the 2020 PFS final rule this November, and the 2021 PFS proposed and final rule next year.
- Retaining 5 levels of service for established patients but only 4 levels for new patients. The AMA plans to delete 99201, a code that was barely ever used, in 2021 and now CMS will follow suit. For established patients, 99211-99215 will remain unchanged and each code will have its own separate payment amount. For new patients, the code range will be 99202-99205 and each code will have its own separate payment amount.
- No add-on codes to accompany outpatient E/M codes. CMS proposes not to create and implement the new HCPCS add-on codes it had introduced in the 2019 PFS rule that were designed to offset some of the expected reimbursement loss from having a single blended payment rate.
- E/M pay boost based on the AMA’s Relative Value Update Committee (RUC) research. As part of its work on the E/M revisions, the AMA’s RUC conducted a nationwide survey of all specialties to update and revalue E/M services, a move that physicians have seen as long overdue. For the lower-level codes (99211, 99202), the RUC recommends no RVU change. For the new patient codes (99203, 99204, 99205), the RUC recommends RVU increases from 7% to 12% (higher for the higher-level codes). For the established patient codes, the RUC recommends significant RVU increases, anywhere from 20% to 30%. CMS proposes adopting the RUC’s recommendations in full.
- Relaxed documentation provisions will remain for 2021. CMS had offered significant changes reducing the level of documentation required for the history and exam components of outpatient E/M services to reduce “administrative burden.” This includes allowing an outpatient code level to be determined based on either medical decision making or time spent on the encounter. The time would be expanded to include non-face-to-face time, and the counseling requirement for time-based coding would be eliminated. All of these changes will still be in effect for 2021.
Look for a much more detailed analysis of the potential E/M revenue impact in future articles of The Business of Medicine.
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