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

CMS Issues Proposed Rule for 2021 Medicare Physician Fee Schedule: Specific Impact to Spine Procedures Published by Machelle Morningstar, CPC, COC, CEMC, COSC, August 4, 2020

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/RVU to $32/RVU. This, along with other code-specific adjustments, has impacted spine procedures by decreasing Medicare payments between 5% and 12%, compared with CY 2020 Final rates.

Public comments are being accepted by CMS between now and 5pm eastern on October 5^th, which may be made 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.

Access the ISASS Spine Codes Comparison 2020 vs. Proposed 2020

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. Relative value units (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:

Table 1. Commonly Reported Spine CPT Coding by Anatomy, Procedure Type and Surgical Approach / Access (including % Payment Change +/- Compared with CY 2020 Payment)
 
 

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 $32.26, from $36.09, a dramatic decrease of $3.83 (-10.6%) compared with CY 2020 PFS conversion factor of $36.04. This applies to all codes. For specific impact of this rule on spine codes, access the spine codes comparison spreadsheet here: ISASS Spine Codes Comparison 2020 vs. Proposed 2020

Evaluation and Management (EM) Services

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

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

Another key change is allowing physicians, based on their documentation, to decide code choice by time or medical decision making (MDM). There are major changes and revised terminology with MDM which provide much more clarification per the guidelines. As an example, CPT 99213 would now have a low number/complexity of problem(s), medically appropriate history/exam, limited review of data, and low MDM or 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 that 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. Due to 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 number of 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 them act in 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 gone down. Congress should address these latest cuts, as well as address the consistent reduction in reimbursement over the last 16-17 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 E&M 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.

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

To make an individual public comment on the Proposed 2021 Rule, visit regulations.gov here (deadline: Oct 5).