How Does the COVID-19 Stimulus Bill Affect Physician Payments?

Betsy Nicoletti, MS


January 12, 2021

Betsy Nicoletti, MS, a nationally recognized coding expert, will take your coding questions via email and provide guidance on how to code properly to maximize reimbursement. Have a question about coding? Send it here.

In a typical year, the Physician Fee Schedule (PFS) Final Rule is the final word on Centers for Medicare & Medicaid Services (CMS) policy for Medicare payments in the coming year. However, 2020 was anything but a typical year.

The Final Rule for the 2021 PFS was released a month late, in early December 2020. Congress then passed a stimulus bill on December 21, which the president signed 6 days later, changing key parts of Medicare policy for 2021. Primary care physicians were going to benefit, but specialists would be at a disadvantage. There were winners and losers.

How so? CMS has long said that it wanted to support primary care through its policies, and the 2021 PFS rule did that. The work relative value units (RVUs) and fees for office and other outpatient services (99202–99215) were increased.

There was also an additional payment for an add-on code (HCPCS code G2211) for inherent complexity associated with complex evaluation and management (E/M) services, to be reported by primary care and medical specialists.

Because CMS is required to maintain budget neutrality, these increases resulted in a 10% decrease in the conversion factor used to calculate reimbursement for a particular procedure or service. As a result, CMS projected that specialty practices that performed many procedures would see a decrease in revenue, while primary care and medical specialties would see an increase in revenue.But the COVID-19 stimulus bill changed all of that. The bill alters Medicare's PFS, including a delay on the new add-on code that was to aid primary care and medical specialties, and changes Medicare policy for 2021.

Medicare Conversion Factor Will Increase; Is That Good or Bad?

In the stimulus bill, Congress delayed for at least 3 years implementation of payment for the new add-on code G2211. The funds that were earmarked for it are instead going to be used to increase the conversion factor, which decreased by 10% in the 2021 PFS. Removing payment for G2211 will mitigate the decrease in the conversion factor by about 3.5%.

In addition, Congress added another $3 billion to the amount that Medicare can pay for Part B services, to support medical practices. This is estimated to increase the conversion factor by about 3.75%.

On January 5, CMS released the updated conversion factor for calendar year 2021. It is $34.89.  Although this is a decrease from the 2020 conversion factor, which was $36.09, it is a significant increase from the $32.41 rate published in CMS's Final Rule.  Combined with the increased payments for office and outpatient codes, many practices will find their Medicare revenue unchanged or increased from last year.


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