Medicare Payments

In the 2021 MPFS final rule, the Centers for Medicare and Medicaid Services moved forward with the implementation of a significant 10.2% cut to the annual conversion factor.  This payment reduction was necessary in order to meet the statutorily required budget neutrality requirement, while at the same time implementing new values for the Evaluation and Management (E/M) code set.  In the COVID-19 Emergency Relief Package, Congress recognized the significant payment cuts on top of declining revenues due to COVID-19 would put many medical practices at significant financial risk.  Therefore, a provision was included in the package that transfers $3 billion from the General Fund of the Treasury to the Federal Supplementary Medical Insurance Trust Fund that increases 2021 MPFS payments by 3.75% for 2021. Furthermore, the package includes a caveat that allows for the infusion of more funding, if necessary, from the Part B/Part D Medicare Trust Fund. The additional payment associated with the $3 billion increase will be exempt from the MPFS budget neutrality requirement. Finally, the action requires CMS to report on the aggregate amount of the increase, including payments made in excess of the $3 billion by April 1, 2022.

Congress also extended the temporary suspension of the 2% sequestration that was established by the CARES Act. In combination, payment rates under the 2021 MPFS will receive a 5.75% increase in payment between January and March 2021, which will then decline to 3.75% for the remaining year.  This does not completely off-set the overall 10.2% cut in the 2021 MPFS but offsets a portion of it.

Additionally, the COVID-19 Emergency Relief Package included a three-year hold on the implementation of CPT Code G2211 Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. This code was developed as part of the Evaluation and Management (E/M) code revaluation process but had received a significant amount of criticism due to unclear guidance on its use.  The removal of this code from the MPFS for the 2021-2024 period will also have an impact on the MPFS payment rates, which is currently under review.