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Billions at stake: How big pay gains for E/M codes could upend the fee schedule

Editor's note: Gain additional intel about the changes to E/M documentation guidelines and pay rates during the Sept. 5 webinar Adapt to Critical E/M Changes: Prepare for New Documentation Guidelines, Pay Rates.

You've heard by now of the momentous changes coming to your office-based E/M codes in 2021. And perhaps you caught wind of accompanying payment updates. But just how game-changing are the new payments?
An early analysis shows they'll be huge should CMS proceed with the planned revaluation of this group of services that providers bill hundreds of millions of times per year. For established office codes, which are the most commonly billed of the bunch, you'll find an average payment increase of 25%. Looking solely at Levels 2 to 5 established office codes, the average increase is more than 29%.
All told, should the proposed payment rates take hold in 2021 as planned, providers would see a cash influx of more than $6 billion, according to a Part B News analysis of the rates using claims-utilization numbers from 2017.
And this isn't idle speculation. In a learning session that CMS hosted Aug. 12, the agency released dollar figures on the 2021 pay rates. In the chart below, you'll find a comparison of 2020 and 2021 payment rates for codes 99202-99215, along with the total net gain. The example uses claims data from 2017, the latest available, to set the utilization numbers.
While the gains happen across the board, the biggest climbers are established office codes 99203-99204, which would each return more than $2 billion in additional payments based on the announced rates. Overall, assuming utilization numbers remain relatively stable, the total gain would come to roughly 24% for these core services.
Will these rates come to pass? Already, medical societies are voicing displeasure with CMS' big cash infusion to E/M services because that would mean other pieces of the fee schedule would take a hit — a hit that could equate to roughly $6 billion. That's because CMS must proceed with fee schedule pricing in a budget-neutral fashion. So if E/M encounters go up, something else must come down.
With several rounds of rule-making in order before the Jan. 1, 2021, launch date, time will tell what happens with the $6 billion dollar question facing providers across the country.
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