As we all know, 2020 was a difficult year in the healthcare due to the COVID pandemic. Now, with a large number of people vaccinated, there is hope that things will stabilize.
Some changes in healthcare were planned for 2021 before the pandemic occurred. One of those changes was the outpatient E&M guideline changes finalized with the 2020 Medicare Physician Fee Schedule. The changes were not delayed because the change was meant to simplify choosing a level of service in outpatient visits and to give flexibility to providers in counseling and focusing on the patient. The work relative value units (wRVU) for these visits were increased, with the established visit levels seeing a 12 to 15 percent increase in some specialties. Some specialties will see a loss, and others, such as primary care, endocrinology, rheumatology and nephrology are projected to see an overall increase to income of 10 to 12 percent. The release of the 2021 Physician Fee Schedule started a roller coaster effect with the unexpected decrease of the conversion factor to 32.41. An increase of 3.75 percent through the Consolidated Appropriations Act 2021 just three weeks after the release of the fee schedule resetting the conversion factor to 34.89 left us scrambling to project our 2021 revenue.
While we expected an increase of reimbursement in some specialties, we did not expect the ongoing impact of COVID-19 on physician compensation. We are starting to hear of health systems renegotiating physician contracts to adjust the dollar per wRVU to standardize the compensation, so it compares to 2020 wRVU rates as opposed to increased wRVU rates in 2021. Physicians in the private sector will have control over their own destiny, depending on specialty. Some have sustained production through offering new services, such as COVID-19 testing, vaccine administration or new ancillary services. Some practices are functioning close to normal, while others are still restricting services. Telemedicine has been effective in serving the patients, but patients not entering the office has restricted routine laboratory and radiological services.
What can all physicians and administrators do to assure coding, production and revenue is optimal?
- Assure understanding of the new 2021 E&M Guidelines.
- Monitor and compare E&M dispersion utilization patterns for 2019, 2020 and 2021.
- Monitor payer mix, and understand the payment rates for commercial and government payers.
- Assure understanding of the new guidelines, and improve documentation and diagnosis coding.
- Perform quarterly internal review of documentation to assure compliance in selection of the code level.
- Analyze current production to optimal production, and pinpoint problem areas.
- Use technology to streamline workflows when possible.
As new industry benchmarks are released, administrators will have the tools to compare and establish a new normal. As we support each other through networks, academy support and medical management organizations, we can share experiences and grow through the challenges.
To learn more about the E&M changes, you can view a more detailed article I wrote on the main BMN website:
Tammie Lunceford, CMPE, CPC is based in Warren Averett’s Birmingham office and serves as the Firm’s Senior Healthcare Consultant.