November 07, 2019

CMS Finalizes Evaluation and Management Coding and Reimbursement Changes

As announced in the American College of Radiology’s (ACR) preliminary summary of the Medicare Physician Fee Schedule Final Rule for Calendar Year (CY) 2021, the Centers for Medicare and Medicaid Services (CMS) finalized its proposal to adopt a new coding structure for the office/outpatient evaluation and management (E/M) codes as recommended by the American Medical Association, as well as the Relative Value Scale Update Committee recommended times and values for these codes, effective January 1, 2021.

There will be separate payments for each of the five levels of office/outpatient E/M, along with a new add-on code for prolonged visits. CMS notes in the rule that January 1, 2021, implementation will allow additional time for feedback, provider education, and changes to workflow, updates to electronic health records and systems.

With payment changes to the E/M services, many specialties, including radiology, are impacted. CMS estimates a combined 8 percent decrease to radiology as a result of the necessary budget neutrality adjustment. However, The Moran Company, a prominent Washington-based health care research and consulting firm, estimates a nine percent reduction, translating to roughly $452 million a year, trended to $5.6 billion over a ten-year time period.

CMS acknowledges in the final rule the ACR’s concern about the redistributive impact of revaluing the office/outpatient E/M visit code set for practitioners who do not routinely bill E/M visits. The Agency indicated that they understand these concerns, but given these revised codes and values do not take effect until CY 2021, and the magnitude of redistribution resulting from other policies that may be adopted through rulemaking is unknown before then, it was premature to finalize a strategy for mitigating the impacts in this final rule. CMS intends to consider these concerns and address them in future rulemaking.

The ACR® will use every avenue available to work with Congress to modify the impact of these changes. For questions on this issue, please contact Katie Keysor, ACR Senior Director, Economics and Health Policy.