CMS Final Rules Detail Big Changes to Evaluation and Management Coding
CMS recently released several “final rules” detailing changes to Medicare over the next two years.
The highly contentious and publicized proposed rule to force hospitals to publicly display some of their fees and contractual rates have not been finalized yet. Among the rules that were, perhaps most notably, CMS announced they will adjust their guidelines for evaluation and management services (E&M) to align with recommendations from the AMA. Starting in January 2021, the changes will slightly increase reimbursement for E&M codes, and simplify their documentation requirements.
Specifically, Medicare will reduce the current five levels of established patient visits to four. Plus, providers will only need to perform a history and exam when medically appropriate. This change is designed to give providers more flexibility when treating patients on a recurring basis for chronic conditions. The rule also looks to simplify the process of selecting an appropriate E&M level, as providers will be able to code based solely on the time spent with a patient or the complexity of the medical decision making. Providers no longer have to take both factors into account.
Other notable changes from the physician fee schedule final rule include fee reductions ranging between 7% - 8% for physical and occupational therapists, social workers, and psychologists. The cuts are set to take effect in 2021, but in response to significant pressure from the affected medical fields, CMS stated it will further evaluate the matter over the course of the next year.
Changes from the hospital outpatient/ASC final rule include an average increase in fees of 2.7%. More notably, CMS is pushing forward with its effort to promote “site neutrality” by no longer paying hospital outpatient centers using hospital rates. For example, the rule intends to pay hospital-owned, off-campus physician offices the same fees as independent physicians. Currently, hospital-owned clinics receive payment using the hospital outpatient prospective payment system, which pays significantly more for the same services provided at non-hospital associated sites.
Medicare started implementing these cuts in 2019, but a recent federal court ruling overturned them. Nevertheless, CMS plans to continue pushing forward next year while planning an appeal. If the fee cuts are enacted long term, they will reduce Medicare’s costs at hospitals’ expense, and may slow the growing trend of hospitals acquiring physician practices.
For further details, click HERE for CMS’s summary of the physician fee schedule rule and HERE for the hospital outpatient and ASC summary.