Reimbursement trends every physician must watch for.
Physicians are facing a variety of reimbursement trends in 2021 that range from how they code office visits to payers emphasizing more value-based care. With 2020 being a tough year for many practices, doctors need to understand what’s happening with payments so they can earn every penny possible to help make up for losses suffered during the pandemic and prepare their practices for the future.
Here’s a look at the biggest changes.
E/M codes and the physician fee schedule
The biggest fundamental shifts in reimbursement are the changes to the physician fee schedule and evaluation and management (E/M) codes. For example, there will no longer be an E/M requirement for a specific level of history and exam. Under the new guidelines, history and exam need to be relevant and pertinent based only on the reason for the visit, with a new focus on the level of medical decision or time as defined by the code.
Physicians need to make sure they understand the new coding criteria or they might miss out on revenue, says Anders Gilberg, senior vice president, government affairs, Medical Group Management Association. “It’s something that could potentially impact reimbursement if they’re not prepared,” says Gilberg, adding that it’s important to make sure all the practice workflows and staff training are set up to account for the changes.
The other big change is the reduction in the Medicare conversion factor from $36.09 in 2020 to $32.26 in 2021, which means practices with a large Medicare population need to plan for a likely reduction in revenue.
Telehealth reimbursement trends
The pandemic forced many practices to embrace telehealth as a means to keep seeing patients, and the Centers for Medicare & Medicaid Services (CMS) responded by lifting many restrictions and reimbursing telehealth visits at the same rates as in-person visits. Most private payers also made telehealth reimbursement equal to office visits for common ailments. CMS’s actions are directly tied to the public health emergency declared by Congress, and what happens to telehealth reimbursement post-pandemic remains unknown. Some private payers have already rolled back some of their telehealth payments as patients have begun returning to practices.
Experts say this leaves physicians who may have invested significant sums into telehealth wondering if they will still be reimbursed for virtual visits once the pandemic wanes.
“It’s not that private payers would assume the answer is they shouldn’t pay them more or increase the rates for telehealth, but they want to make certain that what they’re paying for results in changed outcomes,” says Mark Bethke, FSA, managing director, Deloitte Consulting. “My understanding is there is not a whole lot of data out there that really illustrates how effective telehealth is. You need multiple years of data to truly see outcomes, and while telehealth has been around for a long time, it wasn’t adopted by many until very recently. You can’t really trust the last six months of claims data to say this is the long-term impact because we’re affected much more by a pandemic.”
Gilberg says he expects most private payers to revert to their original agreements in 2021, so whatever aspects of telehealth were covered before the pandemic will continue to be covered, but any special exceptions will likely be removed. On the public payer side, Gilberg says CMS’s changes are covered by the public health emergency, and if that legislation expires, so, too, will all the special telehealth payment rules.
“There are some modest changes in the fee schedule for 2021, adding a couple of codes to the telehealth coverage categories, but largely, CMS can’t do that much without Congress,” Gilberg says. “That’s important, because prior to the public health emergency, Medicare didn’t even cover telehealth outside of rural areas, and there were significant geographic restrictions and other administrative restrictions on telehealth. Unless Congress intervenes, all that will change, including the loss of any type of payment parity.”
Payer trends to watch
Value-based care is expected to continue growing as more payers embrace it as a means to control costs and have data that proves improved outcomes, but fee-for-service isn’t going away — at least not yet.
“I can’t say value-based care is going to be all here in three years because it’s a claim we’ve been saying for many, many years and we’ve been wrong every time,” Bethke says. But even though fee-for-service is hanging around, physicians need to embrace value-based care for their long-term success, he adds.
Gilberg says to expect more hybrid types of approaches to payment models, similar to shared savings programs where fee-for-service is the underlying payment methodology, but then there are bonuses or penalties for cost and quality.
The transition away from FFS takes time, because to be successful, it requires more than just a new payment model where physicians take on more risk. “You have to make changes to the care model and that requires a big change for people to essentially be told they have to operate differently than they have historically done,” Bethke says. “It might require changing physician compensation structures, it might be taking on new claims data, or new analytics that a provider has not had to do and think about before. But the people who can organize and have scale, and they can do it competitively, will have an advantage.”
Medicare, through its Quality Payment Program (QPP), is already measuring doctors in various categories as it tries to identify — and reward — the doctors who achieve the best patient outcomes. But whether it’s for QPP or a private payer value-based care contract, scale is important to protect a practice. Without enough patients, a few chronic ones that have major health problems at one time could wreck a physician’s overall score, resulting in missed bonuses or even a payment penalty.
“I think that you can still be independent, but be part of something, whether it’s an ACO (accountable care organization) or some clinically integrated network,” Bethke says. “I absolutely believe independence can still work if they’re willing to take a portion of their business and partner up in some aggregated fashion with some entity. I think it’s important to be in the driver’s seat versus having it forced upon you.”
Physicians who have the data to show payers they are improving quality, improving efficiency and delivering better outcomes with lower costs will be in a position to negotiate the best contracts in 2021 and beyond.
“Data is everything when it comes to value-based care,” Gilberg says. “The most effective value-based arrangements between physicians and payers are those in which the payers provide data back to the physicians, and that’s typically in the form of claims data, and it’s critical for effective care that it be near-real-time claims data. If the agreement is well thought out, there should be pretty good data sharing back and forth between the health plan and the physician. That’s critical today and it’s going to be critical tomorrow.”
This type of arrangement may be the only profitable option in the coming years.
“Unfortunately, I don’t think that the rates on a fee-for-service basis for primary care will keep up with the costs that are representative of the value primary care brings to the system,” Bethke says.