Global fees: The hidden cost of proposed E/M pay boost
CMS wants to pay more for E/M services in 2020, embracing higher work Relative Value Units (wRVUs) for E/M codes in its Physician Fee Schedule (PFS) proposed rule for next year. However, CMS is not proposing to adopt corresponding wRVU increases to surgical procedure codes with global operative periods, which means that under Medicare’s budget neutrality provision, the overall conversion factor must be reduced.
Remember: CMS is proposing to adopt revised wRVUs for outpatient office visit codes (CPT 99211-99205, with 99201 being deleted in 2021) beginning in 2021. The biggest dollar increases would go to the level 4 and 5 codes, though the level 2 and 3 codes would see significant percent increases in wRVUs (see table, pg. XX).
The E/M changes would clearly benefit specialties that do not bill for procedures with global periods, such as infectious disease and rheumatology. “If finalized, the current CMS proposal would more appropriately value time-intensive healthcare services provided by cognitive specialists such as rheumatologists,” the American College of Rheumatology (ACR) writes in a letter to CMS commenting on the proposed rule. “The result would be an increase in Medicare reimbursement across the board for rheumatology beginning in CY 2021.”
Surgical specialties argue that CMS’ 2020 proposal amounts to a hidden cost, one that singles out providers who perform procedures with global periods and therefore render multiple follow-up E/M visits without separate payment.
“The failure to apply the proposed increases to E/M services provided in the global surgical package effectively creates two different conversion factors for E/M services in the Medicare fee schedule,” the American Academy of Otolaryngology-Head and Neck Surgery (AAO-HNS) writes in a letter to CMS commenting on the proposed rule. “If this proposal is finalized, it is imperative that the revaluation be applied to the entire office-based E/M service line including the E/M services included in the global surgical package.”
The American Academy of Family Physicians (AAFP) was more receptive to the E/M changes, registering its “appreciation and strong support” for the CMS proposal. But even the AAFP acknowledged the potential lop-sided, long-term impact of leaving the global fees unchanged, and offered its own solution to the problem. “The AAFP suggested that the best approach would be to convert all codes with a 10- or 90-day global period to zero-day global periods and have physicians code and document pre- and post-operative services using E/M codes,” the Academy writes in an online article commenting of the PFS proposed rule.
A promising start, but an uneven future
In its 2020 PFS proposed rule, CMS was off to an apparently promising start: By increasing payment for E/M codes and eliminating an earlier proposal to use a single blended payment rate for all outpatient E/M codes, CMS finally appeared to produce a win-win for providers of all specialties, because nearly all providers bill for E/M services. Another reason for optimism was CMS’ recent efforts to reduce administrative burdens on providers – an initiative that led to several finalized proposals to simplify documentation requirements for E/M codes.
However, by not taking action on global fees, the agency is effectively proposing a policy that would benefit some specialties and not others. Primary care and “cognitive specialties” such as infectious disease and rheumatology, which rely heavily on E/M services, would benefit the most, while surgical specialties would actually lose money over the long term.
The revised wRVUs being proposed by CMS are taken from a special AMA working group on E/M services which conducted a survey of various physician specialties in order to revalue E/M codes. Surgical specialties have objected to the survey methodology; the American College of Surgeons (ACS) has called for CMS to freeze current E/M wRVUs and to collect data in 2021, to determine if the E/M documentation changes have any effect on utilization. “We suggest that the [AMA] conduct a survey after physicians and coders have had at least one year of experience with the new codes in order … to collect more accurate data from providers who have actually used the new coding paradigm,” the ACS writes in its comment letter to CMS on the proposed rule. “This delay will also provide valuable information on a shift in reporting that will likely take place and that CMS should take into consideration before implementing new code values.”
|Payments for E/M Codes: 2019 vs. 2021 (proposed) wRVUs|
|Code||Current wRVU||Proposed 2021 wRVU||Percent
|Estimated $ change*|
|99211||0.18||No change||No change||No change|
|99202||0.93||No change||No change||No change|
|+99XXX||Does not exist yet||0.61||n/a||n/a|
|Source: Medicare 2020 PFS proposed rule; national, non-facility values are used. Add-on code +99XXX is the proposed prolonged services code. *Based on proposed 2020 conversion factor of $36.09.|
Budget neutrality or preferential treatment?
Because the one-sided application of E/M payment increases won’t change surgical codes with a global period, the conversion factor is key. It is one of the main levers CMS has to keep the Medicare program compliant with a budget neutrality provision in the law, which requires that any RVU change not increase or decrease expenditures for physician services by more than $20 million.
The proposed 2020 conversion factor is $36.09, a barely noticeable increase from the current 2019 conversion factor of $36.04. The AAO-HNS acknowledges that the conversion factor is statutorily mandated, but argues that the end result is a payment scheme that prefers more RVUs for primary care and less for specialties who rely on surgical procedures with global fees.
Disclaimer: This blog post is not intended to provide any legal advice, guidance or opinion. The information contained in this blog post is a non-legal interpretation of statutes, acts, laws and should not and does not substitute for the advice, guidance or opinion of legal counsel. The author bares no liability and make no warranties for the information provided if implemented as is without confirmation of its applicability by the end user.
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