Medicare & Medicaid

2021 Medicare pay schedule eases physicians’ documentation burdens

Kevin B. O'Reilly , Senior News Editor

What’s the news: The final 2021 Medicare physician payment schedule includes a simpler, more flexible process for coding and documenting evaluation and management (E/M) office-visit services. But those positive changes, set to take effect in January, are accompanied by significant pay cuts for many physicians in specialties that provide relatively few office visits—cuts that come as the pandemic is imposing major financial strains on doctors of all stripes.

E/M coding update checklist

Get step-by-step advice on navigating the office visit documentation coding changes and meet the January 2021 deadline for CMS’ E/M coding update with confidence.

The changes coming Jan. 1 to the coding, documentation and payment of E/M office-visit services amount to “foundational improvements,” said AMA President Susan R. Bailey, MD. The Medicare changes are in line with the Current Procedural Terminology (CPT®) Editorial Panel and the AMA/Specialty Society RVS Update Committee and allow doctors to pick the right code based on total time or medical decision-making. Physicians have a raft of E/M resources from the AMA to help them prepare for these shifts.

But the newly adopted office-visited pay rates and other pay raises finalized in the Centers for Medicare & Medicaid Services (CMS) rule must, by statute, be offset by pay cuts to other Medicare services for the sake of budget neutrality.

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Why it’s important: “This will result in a shocking reduction of 10.2% to Medicare payment rates in the midst of the worsening COVID-19 pandemic while physicians are continuing to care for record numbers of patients diagnosed with COVID-19 and trying to keep the lights on in their practices,” Dr. Bailey said. “These cuts will hurt all Medicare patients,” she added. That includes patients seeking care for COVID-19 because payments for critical care, hospital visits and nursing-home visits will be cut dramatically.

The AMA is strongly urging Congress “to prevent or postpone the payment reductions resulting from Medicare’s budget neutrality requirement,” Dr. Bailey said. “Physicians are already experiencing substantial economic hardships due to COVID-19, so these payment cuts could not come at a worse time.”

Read about a U.S. House bill, H.R. 8702, that would put a two-year freeze on Medicare services set for 2021 pay cuts.

Learn more: AMA staffers are continuing to analyze the massive rule and will release a detailed summary shortly. Meanwhile, the AMA has got you covered when it comes to helping you prepare for the 2021 changes to E/M coding and documentation guidelines.

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The AMA’s extensive resource library includes:

The AMA’s work in this area is part of its continuing effort to cut administrative burdens and other obstacles to patient care.