Proposed Rule for CY2021 Medicare Physician Fee Schedule Includes a 10% Cut to Conversion Factor; Minor Changes to MIPS

The Center for Medicare & Medicaid Services (CMS) released its proposed rule for the 2021 Medicare Physician Fee Schedule (MPFS). This 1,355 page rule includes conversion factor and code-level updates to the fee schedule as well as updates for the 2021 Quality Payment Program.  The QPP updates relate to a 2021 performance period which will impact payment in 2023.

Estimated Conversion Factors

Increases to the office/outpatient evaluation and management (E/M) codes previously finalized by CMS have a substantial impact on the 2021 conversion factors since by law, those updated E/M values must be implemented in a budget neutral manner.  There is no offsetting statutory update factor as MACRA does not include any statutory  update until 2026.   The 2021 Medicare Anesthesia Conversion Factor estimate  is $19.9631 and the estimated Resource Based Relative Value System (RBRVS) Conversion Factor is $32.2605. These estimates reflect a decrease of approximately 10% from the 2020 conversion factors – a decrease affecting a full range of physician specialties.

            Source:  CMS-1734-P, Table 88 and Table 89

ASA and many other physician specialties  have been actively engaged in working to convince CMS of the implications of these cuts to physician practices.  ASA and these stakeholders have also worked with Congress regarding the need to override the budget neutrality requirements associated with the E/M update.  That work will continue.  Physician practices cannot withstand decreases that are the result of law that does not recognize the threat that COVID-19 brings to the economic viability of medical practice.

Merit-based Incentive Payment System (MIPS):

CMS is proposing the following updates to the MIPS program for 2021 performance period (2023 payment period):

• Out of 100 MIPS points available, 40% will be allocated to Quality, 20% to Cost, 25% to Promoting Interoperability (formerly Advancing Care Information) and 15% to Improvement Activities.
• The proposed performance threshold for 2021 is 50 MIPS Total Points. Eligible Clinicians (ECs) or groups who fail to participate, when required, or to meet the 50-point threshold may incur up to a negative 9% payment adjustment in 2022.
• CMS proposed no changes to the MIPS Anesthesiology Measure Set.
• CMS has delayed the implementation of MIPS Value Pathways (MVPs) until the 2022 performance period.

Additional information on the Medicare Physician Fee Schedule and Quality Payment Program will be published in the weeks ahead.

The 2021 Proposed Medicare Physician Fee Schedule and Quality Payment Program is located here. 

• A fact sheet on the CY 2021 Physician Fee Schedule proposed rule is available here.
• A fact sheet on the CY 2021 Quality Payment Program proposed rule is available here.