Congress Considers Legislation to Offset Physician Fee Schedule Budget Neutrality Impacts

As physicians continue to battle the worsening COVID-19 pandemic, the last thing they should have to worry about is cuts to their Medicare payments. Unfortunately, without Congressional action before January 1, 2021, that nightmare scenario will become reality.

Under current law, CMS is required to make budget neutrality adjustments to the Medicare physician payment schedule whenever changes in relative value units (RVUs) generates a payment increase or decrease by $200 million.

As a result, significant increases in RVUs for office evaluation and management (E/M) services finalized by CMS this month and scheduled to take effect in 2021 will lead to a wide range of payment increases and decreases based on the mix of services each specialty provides. Unfortunately, there is broad consensus that these adjustments will compound the COVID-19 pandemic’s negative impact on physician practices and further aggravate concerns about the viability of independent practices. Budget neutrality requirements will lead to lower payments for a multitude of services crucial to combatting the pandemic, including hospital visits, critical care visits, nursing home visits, and home visits.

In late October, Reps. Ami Bera, MD (D-CA), and Larry Bucshon, MD (R-IN), introduced bipartisan legislation to address these concerns. The “Holding Providers Harmless from Medicare Cuts During COVID-19 Act” (H.R. 8702) would freeze payments at 2020 rates for services scheduled to be cut in 2021 for two years while allowing the scheduled E/M increases to take place. Analyses of this approach show improved overall impact numbers for all physician specialties.