Medicare Payment and Reimbursement

Proposed change to Medicare E/M payment leads to disagreement among both providers and health plans

October 12, 2020 1:05 pm
  • Specialties were split on whether Medicare should move forward with payment changes for evaluation and management.
  • E/M payment cuts could reach as high as 11% for some specialties, CMS said.
  • Some Medicare Advantage health plans worry the new E/M financial incentives will lead to a decrease in needed data.

Medical specialties, hospitals and health plans are squaring off — among themselves, in some cases — over proposed Medicare changes in payment rates for evaluation and management (E/M) codes.

In recent comments submitted to CMS on proposed 2021 Medicare physician payment policies, E/M changes drew thousands of conflicting responses from physician, hospital and health plan groups. The proposed changes include:

  • Revaluing services closely tied to office/outpatient E/M visits
  • Requiring a budget neutrality adjustment of a net 10.61% cut in the Medicare conversion factor for any E/M payment changes in 2020 and beyond

According to CMS modeling, the changes are expected to have widely divergent effects based on medical specialty. For example, the agency expects payment increases of between 13% and 17% for endocrinology, family medicine, rheumatology and hematology/oncology. Conversely, payment cuts of between 8% and 11% are expected for surgeons, nurse anesthesiologists, chiropractors and radiologists.

The net 6% cut projected for emergency physicians after all 2021 changes are implemented will cause some practices — already battered by the COVID-19 pandemic’s financial losses — to close, according to a letter from the American College of Emergency Physicians (ACEP).

“At a time when emergency physicians are risking their lives to combat this disease, they should NOT also be worrying about staying in business and keeping the ED doors open,” William Jaquis, MD, president of ACEP, wrote to CMS.

Like other specialties benefiting from the change, the American College of Rheumatology (ACR) urged CMS to waive budget neutrality and not offset the E/M increases with cuts to other payments.

“However, the process of waiving budget neutrality or otherwise mitigating payment decreases must not delay the implementation of the previously finalized E/M valuations,” wrote Ellen Gravallese, MD, president of ACR.

The American Medical Association (AMA) warned against both the use of budget neutrality in the payment changes and CMS’s decision to exclude the revised E/M values from global surgical codes.

That decision “disrupts relativity and treats the same physician work differently based on whether the service is a stand-alone or post-operative visit,” AMA wrote.

The American Hospital Association (AHA) also warned that budget-neutral implementation of the E/M changes “would significantly strain the finances of hospitals and health systems.” AHA previously estimated hospitals and health systems will lose more than $300 billion in 2020 due to the pandemic.

The proposed physician payment changes also came as the share of physicians affiliated with health systems increased from 40% in 2016 to 51% in 2018, according to recent data from the Medicare Payment Advisory Commission.  

If CMS cannot obtain a budget neutrality waiver from Congress, AHA urged delaying implementation of the revaluation of E/M and related-visit codes.

Health plan reactions also diverge

Health plan advocates similarly were split on the issue.

America’s Health Insurance Plans (AHIP) warned about unintended consequences of switching the basis for E/M payments from patient history and exam, as well as number of body systems/areas reviewed. Payments instead would hinge on either the level of medical decision-making or the total time personally spent by the reporting practitioner.

Specifically, “Medicare Advantage plans are concerned that decreased documentation will justify fewer conditions for risk adjustment purposes, resulting in a negative impact on plan payment,” AHIP wrote.

But the Alliance of Community Health Plans, which represents not-for-profit, provider-aligned health plans, praised the E/M payment changes as needed to “substantially promote primary care services that are critical to managing patient care and keeping costs low.”

Additional concerns about the proposed rule

Other Medicare physician policies that drew concerns from AHA included:

  • The new Advanced Payment Pathway (APP) in the Merit-based Incentive Payment System (MIPS)
  • Changes to the Medicare Shared Savings Program’s quality measurement approach
  • Changes to requirements governing the electronic prescribing of controlled substances

The APP requirements for all MIPS alternative payment models (APMs) to report the same six quality measures would “lead to a misalignment between APMs and the quality measures to which they are held accountable,” AHA wrote.

The proposed measures for all APP participants, regardless of APM model, are for:

  • Diabetes control
  • Depression screening/follow-up
  • Blood pressure control
  • Patient experience
  • Hospital-wide readmissions
  • Admissions for multiple chronic conditions

“The AHA believes that requiring all MIPS APMs to report on the same six quality measures would be a misguided, ‘one size fits all’ policy that fails to improve upon current policy,” the hospital association wrote. “We urge CMS not to adopt it, and instead to retain the existing requirement that MIPS APMs report the measures already required under their models.”


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