General Surgery Coding Alert

E/M increase won’t balance conversion factor decline.

The release of the 2021 Medicare Physician Fee Schedule (MPFS) final rule means you have a host of guidance to learn that will impact your surgical practice’s bottom line this year.

Topping the list is the 2021 conversion factor (CF) of $32.41, a decrease of 10.2 percent from the 2020 CF of $36.09. The move is required by law for budget neutrality, primarily to offset the increase in pay for certain evaluation and management (E/M) procedures.

Legislative update: Congress provided some payment relief in the Consolidated Appropriations Act (CAA) of 2021 passed after the MPFS final rule was published, and Centers for Medicare & Medicaid Services (CMS) posted an updated fee schedule on Jan. 5 listing an amended CF of 34.89. This is a one-year reprieve based on a 3.75 percent payment increase for every code for services furnished in calendar year 2021. The increase will not be considered in determining future CF updates.

The law also allows a three-month delay of the Medicare 2 percent sequester payment reductions through March 31, 2021. The CARES Act had suspended these payments back in May 2020, which expired on Dec. 31.

Drill Down to CF Impact

The historic CF decrease for 2021 was due to CMS’ decision to increase reimbursement for the office visit codes (99202-99215), a boon for some specialties, but not for all. The million dollar question is whether your surgeon’s increased pay for office/outpatient E/M services will offset the decrease in surgical procedure relative value units (RVUs) put in place to satisfy the budget neutrality adjustment.

Stakeholder reaction: Provider groups are concerned that the 2021 MPFS will exacerbate the financial challenges physicians are already facing during the COVID-19 pandemic, according to Mary I. Falbo, MBA, CPC, CEO of Millennium Healthcare Consulting Inc. in Lansdale, Pennsylvania.

“The AMA strongly urges Congress to prevent or postpone the payment reductions resulting from Medicare’s budget neutrality requirement,” said American Medical Association President Susan R. Bailey, MD, in a statement. “Physicians are already experiencing substantial economic hardships due to COVID-19, so these payment cuts could not come at a worse time.”

Professional surgeon organizations concur. “We support steps to expand access to care, but this rule takes one step forward and several steps back by disregarding patients’ needs and the surgeons who care for them,” said David B. Hoyt, MD, FACS, American College of Surgeons executive director, in a statement with the Surgical Care Coalition. “The middle of a pandemic is no time for cuts to any form of health care, yet this final rule moves ahead as if nothing has changed. The health care system cannot absorb cuts of this magnitude.”

Focus on Surgical Practice Pay

“Unfortunately cutting the conversion factor means that a lot of services other than E/M are cut severely,” says Stephanie A. Thebarge, CPC, CPMA, CPPM, CEMC, CHONC, PESC, AAPC National Advisory Board member and compliance manager at New England Cancer Specialists in Scarborough, Maine. “If specialists provide … surgeries, it will definitely be felt by these practices.”

Why CF matters: The national CF is what you use when calculating payment, explains Kelly D. Dennis, MBA, ACS-AN, CAN-PC, CHCA, CPMA, CPC, CPC-I, owner of Perfect Office Solutions in Leesburg, Florida. You multiply the CF by the total RVUs for a procedure to determine the national payment amount, to which local contractors apply a geographic adjustment to determine your pay.

Surgical impact: The final rule’s estimated impact on total allowed charges by specialty shows that general surgery practices can expect a 6 percent overall decrease in 2021 Medicare pay. That’s based on changes to RVUs for specific procedures and the CF reduction, so the CAA adjustment to the CF will mitigate that impact for 2021. Those values may be different for your practice depending on the mix of procedures you perform. Generally speaking, those specialties that focus more exclusively on surgeries, rather than E/M visits, will see their revenue share decrease in 2021.

E/M increase: General surgeons bill E/M services such as office/outpatient codes 99202-99205 and 99212-99215, and RVUs for those codes increase significantly in 2021, such as a 28 percent increase for 99214 (Office or other outpatient visit for the evaluation and management of an established patient, which requires a medically appropriate history and/or examination and moderate level of medical decision making…). Even so, this boost will not even the books at a lot of practices, according to Marcella Bucknam, CPC, CCS-P, COC, CCS, CPC-P, CPC-I, CCC, COBGC, revenue cycle analyst with Klickitat Valley Health in Goldendale, Washington. “I doubt that we will see much of an offset. Not every practice is highly dependent on E/M. Surgeons, who are not really doing elective surgery at this time, are going to have fewer E/M encounters. It’s hard to see how such a drastic decrease will be offset under these circumstances. Some specialties may do fine, but I think most will be hurt,” she continues.

Resources: You can access the MPFS Final Rule published in the Dec. 28, 2020 Federal Register at www.govinfo.gov/content/pkg/FR-2020-12-28/pdf/2020-26815.pdf and the Jan. 5 updated RVU file at www.cms.gov/medicaremedicare-fee-service-paymentphysicianfeeschedpfs-relative-value-files/2021.