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CMS Proposes Drastic Physician Payment Cuts for Calendar Year 2021

Aug 27, 2020

The proposed rule for the Calendar Year 2021 Medicare Physician Fee Schedule was released on Aug. 3, 2020.  As anticipated, the biggest impact on gynecologic oncology is the reduction in the physician fee schedule (PFS) conversion factor due to a budget neutrality adjustment that accounts for increases in relative value units (RVUs) for certain services, as required by federal law.

Under the proposed rule, CMS would set the PFS conversion factor (CF) for 2021 at $32.26 —a reduction of $3.83, or almost 11% from 2020’s conversion factor of $36.09. The statutory physician payment update for 2021 is zero percent as provided under the Medicare Access and CHIP Reauthorization Act (MACRA). The drastic 11% reduction in the conversion factor is necessitated by proposed additional spending of $10.2 billion.

The American Medical Association RVS Update Committee (RUC)’s recommendations to increase the value of Evaluation and Management (E/M) office visits account for only half of this additional spending, and half of the reduction. The remaining spending increases and resulting conversion factor reduction is attributed to the CMS proposal to increase valuation for several services including end stage renal disease services, initial preventive physical exam and annual wellness visits, and emergency department visits, and increased utilization assumptions about the new E/M office visit primary care add-on code.

CMS also did not propose changes to the valuation of 10- and 90- day global surgical packages to reflect changes made to values for the office E/M visit codes.

The impact of the proposed conversion factor reduction on payment rates is shown below using a few gynecologic surgical procedures as an example:

CPT Code Procedure 2020 CF 2021 CF CY 2020 Payment Rate CY2021 Proposed Payment Rate*
58150 Total Hysterectomy $36.09 $32.26 $1.055.63 $943.62
58544 Lsh w/t/o uterus above 250 g $36.09 $32.26 $946.64 $846.19
58575 Laps tot hyst resj mal $36.09 $32.26 $1,981.70 $1,771.42

*These rates assume no changes to RVUs

In the area of telehealth, the proposed rule expands the list of telehealth services that will remain permanent beyond the COVID-19 public health emergency, including the prolonged office or outpatient E/M visit code and certain home visit services. CMS also proposes to keep additional services, including certain emergency department visits, on the Medicare telehealth list until the end of the calendar year in which the public health emergency ends.

CMS is proposing changes to the Merit-based Incentive Payment System (MIPS), including postponing implementation of the Value Pathways participation option to allow for additional stakeholder feedback and proposing a new MIPS pathway for participants in alternative payment models (APMs) called the APM Performance Pathway. CMS is also proposing to lower the weight of the Quality Category performance score from 45% to 40% of the MIPS final score and increase the weight of the Cost Performance Category from 15% of the MIPS final score to 20%.

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