CMS Issues Proposed Rule for 2021 Medicare Physician Fee Schedule: Specific Impact to Spine Procedures

PHYSICIAN PAYMENT PROVISIONS

The 2021 Proposed Medicare Physician Fee Schedule Rule updated several policies and payment rates of relevance to ISASS members. Notably, budget neutrality adjustments have reduced the Conversion Factor associated with all CPT codes, from $36 per relative value unit (RVU) to $32 per RVU. This reduction, along with other code-specific adjustments, has impacted spine procedures by decreasing Medicare payments between 5% and 12%, compared with calendar year (CY) 2020 final rates.

Public comments are being accepted by Centers for Medicare & Medicaid Services (CMS) between now and 5pm Eastern on October 5. Comments may be submitted electronically via this link. ISASS encourages its members to express their interest in having these payment cuts reduced or reversed by the time of the rule’s effective date for procedures as of January 1, 2021. Comments do not need to be lengthy or formal; the more comments CMS receives from interested stakeholders, the more likely they are to make policy changes.

Among the most notable proposals, aside from the proposed draconian reductions, is a proposal to review the relative value for CPT code 22867, Coflex. Code 22867 was flagged in the proposed rule as potentially misvalued, and stakeholders are invited to provide comment and input on appropriate valuation for 22867, which was added to the Physician Fee Schedule in 2015 as a new Category I CPT code.

Access the ISASS Spine Codes Comparison: 2020 vs. Proposed 2021

Background

Payment is made under the Physician Fee Schedule (PFS) for services furnished by physicians and other practitioners in all sites of service. These services include, but are not limited to, office visits, surgical procedures, diagnostic tests, therapy services, and specified preventive services.

In addition to physicians, payment is made under the PFS to a variety of practitioners and entities, including nurse practitioners, physician assistants, and physical therapists, as well as radiation therapy centers and independent diagnostic testing facilities.

Payments are based on the relative resources typically used to furnish the service. RVUs are applied to each service for physician work, practice expense, and malpractice. These RVUs become payment rates through the application of a conversion factor. Payment rates are calculated to include an overall payment update specified by statute.

In terms of surgical approach/access by anatomy in the spine, the following table of commonly reported spine procedure CPT codes describes how to consider applicable medical coding in CY 2021 relative to proposed payment cuts for 2021 procedures:

CY 2021 PFS Proposed Rate-Setting and Conversion Factor

In the proposed rule, CMS used a budget neutrality adjustment to account for changes in RVUs, as required by law, and updated the CY 2021 Proposed PFS conversion factor to $32.26 from $36.09—a dramatic decrease of $3.83 (-10.6%) compared with CY 2020 PFS conversion factor of $36.04. This conversion factor applies to all codes. For specific impact of this rule on spine codes, access the spine codes comparison spreadsheet.

Evaluation and Management (EM) Services

One bright spot in this Proposed Rule is the proposal by CMS to adopt changes developed by the American Medical Association for better accounting for Evaluation and Management (EM) services by dropping the current history and examination requirements, including dropping of the associated documentation requirements.

In lieu of significant history and examination, the physician can perform, and document, a medically appropriate history and/or examination.

Another key change is allowing physicians, based on their documentation, to select a code by time or medical decision making (MDM). There are major changes and revised terminology with MDM that provide much more clarification per the guidelines. For example, CPT 99213 would now have a low number/complexity of problem(s), medically appropriate history/examination, limited review of data, and low MDM or time (20-29 minutes). When choosing a code based on time, there is a minimum amount of time offered as guidance, which may not be the standard time for a given code’s level, but does represent the time the provider spends with the patient.

These new EM guidelines benefit primary care providers more than specialists. CMS has proposed a policy that they will give these providers an effective “raise” in the amount they are reimbursed for commonly undervalued EM services. While this is good for them, it is not good for specialists who perform specific services, such as surgeries and other interventions, and generally have a bundled payment. Bundled payments include initial EM service, the procedure, and any follow-up EM visits post-procedure. As a result of this proposed planned change, these providers will see a decrease in their payment due to the rule of budget neutrality. Budget neutrality basically says that there are X dollars in the pot, and where dollars are moved for higher payment, there must be a payment reduction in some other area of the pot—most often bundled services.

Congress can change this situation by passing new legislation, waiving budget neutrality, and making a more equal system of addressing the payment needs of EM services while not cutting payments from bundled procedural services, making a more equitable and fair payment system for all. We have seen Congress act in the past with previous ‘doc fix’ legislation. While this latest “fix” is necessary to reverse the 10% cut to payments, the issue is more pervasive as costs of running clinical practices and facilities have increased as reimbursements have continuously decreased. Congress should address these latest cuts as well as the consistent reduction in reimbursement over the past 16 to 17 years.

Overall, while CMS proposed to reduce payment rates for spine procedures due to overarching laws requiring budget neutrality, physicians (and office staff) should be satisfied with the proposed EM changes for CY 2021. ISASS will continue to advocate for spine surgeons and the importance of appropriately reimbursing for medically necessary therapies and surgical procedures performed for Medicare patients.

ISASS will provide comments to CMS on the proposed rule by the October 5, 2020, deadline.

• Read the CMS Fact Sheet on the Proposed PFS Rule here.
• Read the Proposed PFS Rule here.