The COVID-19 Relief Bill: What It Means For Medicare Payments
By Joey Berlin

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When Congress passed the omnibus spending and COVID-19 relief bill at the tail end of 2020, it carried important implications for physicians operating under this year’s Medicare physician fee schedule, including some changes that will positively affect doctors’ bottom line.

The Consolidated Appropriations Act, signed into law Dec. 27, addresses some of the negative impacts of the 2021 fee schedule’s budget neutrality requirements, meaning better payments for many physicians than outlined in the Center for Medicare & Medicaid Services’ (CMS) original fee-schedule regulation.

TMA staff say the key modifications, noted by CMS following passage of the bill, include:

  • A 3.75% overall increase to the fee schedule payments for 2021, partially offsetting cuts that CMS originally implemented in this year’s fee schedule rule.
  • Delaying implementation of the “inherent complexity” add-on payment code for evaluation and management visits to the beginning of 2024. According to an American Medical Association (AMA) analysis of the law, that code accounted for about 3% of the payment reduction in the original fee schedule, or $3 billion.
  • Extending suspension of the Medicare sequestration payment cut through March 31. Previously, that suspension was scheduled to end on the final day of 2020, meaning physicians would have faced a 2% payment reduction at the start of 2021. Instead, it won’t kick in until April 1.
  • Retaining the work Geographic Price Cost Index (GPCI) floor of 1.0, which helps keep physician payments from decreasing further, through the end of 2023. The 1.0 floor was extended multiple times in 2020 due to the COVID-19 public health emergency.

CMS said to account for the above changes, it recalculated payment rates and the conversion factor used to determine certain payments. The 2021 conversion factor is now $34.8931, an increase from the originally set $32.41.

AMA created a table that illustrates the impact of the conversion-factor increase on various specialties.

“Based on the specialty impact table in the final rule, the AMA estimates that most specialties will now see either a neutral or positive change in total Medicare payments in 2021,” the AMA summary said. “Impacts for particular medical practices will depend on both physician specialty and their particular mix of services, as well as whether or not they would have billed [the inherent-complexity code] if this add-on code was not delayed.”

On its 2021 fee schedule webpage, CMS says it is “ready to process claims correctly and on time. You don’t need to wait to submit your claims.”

Last Updated On

January 11, 2021

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Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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