• AAFP Advocacy Focus: Medicare Physician Fee Schedule (MPFS)


    The Centers for Medicare & Medicaid Services (CMS) annually updates the MPFS for the upcoming calendar year. The regulatory update addresses physician payment and coverage for services under Medicare Part B and the Quality Payment Program through revisions to payment policies, rates, and other provisions, including geographic adjustments and the relative value units assigned to services.

    Office/outpatient evaluation and management (E/M) services are a major category of Current Procedural Terminology (CPT) codes (99202–99215) that family physicians and other clinicians use to bill for office visits. During outpatient E/M visits, physicians provide screenings and other preventive services, diagnose and manage patients’ chronic conditions, treat acute illnesses, develop care plans, coordinate care across providers and settings, and discuss patients’ preferences. The office/outpatient E/M patient visit is most frequently billed by family physicians and is the core of most family physician practices.

    2021 Medicare Payment Rates and Conversion Factor

    CMS released the calendar year 2021 MPFS final rule on December 1, 2020, and it included plans to adopt increased values for outpatient E/M services, originally finalized in 2019, and to implement the updated outpatient E/M coding and documentation guidelines developed by the CPT Editorial Panel.

    The changes are in effect as of Jan. 1, 2021. The AAFP advocated for these E/M increases, which will help to ensure that primary care services are valued more appropriately and begin to correct a longstanding imbalance in the MPFS.

    Congress then passed legislation in December 2020 to increase the CY 2021 Medicare conversion factor and provide temporary relief to physician practices during the COVID-19 pandemic. The new CY 2021 conversion factor is $34.8931. While this is about 3% lower than the CY 2020 conversion factor, it is much higher than the conversion factor that CMS had planned to implement.

    Family physicians will see Medicare payment rates increase for most office/outpatient E/M services in 2021, but rates for other services are likely to go down slightly due to the reduction in the conversion factor. Overall, the AAFP expects that family physicians will experience an increase in Medicare payment in 2021.

    Other Changes in the CY 2021 MPFS

    CMS did not finalize permanent coverage of audio-only telehealth services, which also has been a priority for the Academy in order to improve equitable telehealth access. The agency signaled that broader expansion of Medicare telehealth coverage, including eliminating or modifying geographic and originating-site restrictions, will require congressional action.

    In February, CMS announced that it would automatically apply the MIPS extreme and uncontrollable circumstances (EUC) policy to all individual MIPS-eligible clinicians for the 2020 performance year. This means that individuals who do not submit data, or submitted data for only one performance category, will automatically receive a neutral payment adjustment for the 2020 performance year. The agency also reopened the application period for groups to apply for an EUC exception and request MIPS category performance reweighting. The new deadline is March 31, 2021. The AAFP strongly advocated for CMS to automatically apply the EUC policy to provide physicians adequate relief from the ongoing COVID-19 pandemic.

    CMS did not finalize the proposal to increase payment for the immunization administration base codes (90460, 90471, 90473).

    You can find a comprehensive summary of the final rule here. The AAFP’s comments on the 2021 proposals can be found in a Sept. 28, 2020, letter to CMS Administrator Seema Verma.

    Why We Fight

    More than 90% of family physicians accept Medicare. The MPFS is also often the basis for payment schedules used by other payers, including TRICARE, state Medicaid plans, and many private payers. What happens with the MPFS therefore has an enormous impact on primary care. Yet the annually updated MPFS does not necessarily advance a primary care–centered health system that improves health and reduces system costs.

    As noted, CMS has adopted policies to increase values for office visit/outpatient E/M services and updated office visit/outpatient E/M coding and documentation guidelines. The new values and guidelines are in effect as of Jan. 1, 2021. These changes are a direct result of years of lobbying by the AAFP and amount to a significant increase in Medicare payment for family medicine — a long-sought raise for family physicians. To the extent that other payers rely on the MPFS, family physicians may experience a payment increase beyond Medicare, too.

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