As many of you are aware, CMS has made significant changes to the Physician Fee Schedule (PFS) for the 2021 calendar year. These modifications to the PFS are the most significant changes made since 1997 and will undoubtedly affect the way in which otolaryngologists practice, from documentation to reimbursement.
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April 2021The two largest areas of change in the PFS are those in ambulatory/outpatient evaluation and management (E/M) services and those in payment to providers.
Payment Changes
As a review, the CMS reimbursement payments are calculated as follows:
(Relative Value Unit) x (Geographic Practice Cost Index) x Conversion Factor = Payment
Each procedure’s relative value unit (RVU) is composed of three parts: work RVU (wRVU), practice expense RVU (PE RVU), and malpractice RVU (MP RVU). RVUs for each outpatient CPT code (99202-99205/99211-99215) increased substantially from calendar year 2020 to calendar year 2021. All components of the RVU, including wRVU, changed; the wRVU for 99203-99205 and 99213-99215 increased:
- 99203 wRVU increased from 1.42 to 1.60
- 99204 wRVU increased from 2.43 to 2.60
- 99205 wRVU increased from 3.17 to 3.50
While, on the surface, an increase in RVU for E/M visits might seem favorable, budget neutrality requirements require that the increases in payment for these E/M visits be offset by reductions in payments for other services. This was achieved in two fashions. First, CMS did rebalance the RVU attribution for some services, which affected other subspecialties much more than otolaryngology.
The second, and more impactful, way that budget neutrality was achieved was the decrease in the Conversion Factor (CF) for the first time in many years, from $36.09 to $32.41. We have to look back over 25 years ago to 1994 to identify a comparable CF of $32.91, without any consideration of inflation.
The degree of history documented, including family, past surgical and medical history, and a review of systems, is no longer used for coding. As such, providers may document only a history that’s relevant to the medical encounter.
While, on the whole, these changes translate to an increase in payment for ambulatory/outpatient E/M services, it means procedures and other services in which RVUs did not meaningfully increase will be reimbursed at a significantly lower rate.
Many organizations have attempted to model what the changes in RVUs and payments will be, but this is difficult to project due to coding practices. Most agree, however, that otolaryngologists will receive an approximately 7% increase in wRVUs but a corresponding 3%-4% decrease in reimbursement for identical services rendered.
Physicians paid on a $/RVU model can expect that organizations will propose decreasing the amount paid per RVU. Even for those with no or few Medicare patients, private payor contracts typically mirror CMS payment models, so changes throughout the year should be expected. Otolaryngologists who provide mostly ambulatory care with few procedural services may see increases in reimbursement or payments as a result of these changes.
Coding Complexities
In addition to changing the finances of how reimbursement will take place, there have been material changes regarding what’s included for coding that physicians should be aware of.
Elements of Medical Decision Making – Must Meet at Least 2 of 3 Elements Below
| CPT Codes / Complexity | Number and Complexity of Problems Addressed (Element 1) | Amount and/or Complexity of Data to be Reviewed and Analyzed (Element 2) | Risk of Complications and/or Morbidity or Mortality from Additional Diagnostic Testing or Treatment (Element 3) |
|---|---|---|---|
| 99202 99212 Straightforward | Minimal • 1 self-limited or minor problem with short time course (i.e. cold, insect bite, tinea corporis, URI) | Minimal or none | Minimal Risk |
| 99203 99213 Low | Low (only 1 bullet needed) • >2 self-limited or minor problems • 1 stable chronic illness (expected duration >1 year; i.e. DM, cataract, BPH, dementia) • 1 acute, uncomplicated illness or injury (i.e. cystitis, allergic rhinitis) | Limited (only 1 category needed) Category 1: Tests and documents (>2 of below): • Review of prior external note(s) from each unique source*; • Review of the result(s) of each unique test*; • Ordering of each unique test* Category 2: Assessment requiring an independent historian | Low Risk Examples only: • No prescription drugs • Decision regarding minor surgery without any identified patient or procedure risk factors |
| 99204 99214 Moderate | Moderate (only 1 bullet needed) • >1 chronic illnesses with exacerbation or side effects of treatment (i.e. worsening HTN) • >2 stable chronic illnesses • 1 undiagnosed new problem with uncertain prognosis (i.e. lump in breast) • 1 acute illness with systemic symptoms (i.e. pyelonephritis, pneumonitis, colitis) • 1 acute complicated injury (i.e. head injury with LOC) | Moderate (only 1 category needed) Category 1: Tests, documents, or independent historian (>3 of below): • Review of prior external note(s) from each unique source*; • Review of the result(s) of each unique test*; • Ordering of each unique test*; • Assessment requiring an independent historian Category 2: Independent interpretation of tests performed by another provider Category 3: Discussion of management or test interpretation with another provider | Moderate Risk Examples only: • Prescription drug management • Decision regarding minor surgery with identified patient or procedure risk factors • Decision regarding elective major surgery without identified patient or procedure risk factors |
| 99205 99215 High | High (only 1 bullet needed) • >1 chronic illnesses with severe exacerbation, progression, or side effects of treatment (i.e. COPD exacerbation requiring hospitalization) • 1 acute or chronic illness or injury that poses a threat to life or bodily function (i.e. MI, PE, respiratory distress, peritonitis, acute renal failure, suicidal ideation with plan) | Extensive (at least 2 categories needed) Category 1: Tests, documents, or independent historian (>3 of below): • Review of prior external note(s) from each unique source*; • Review of the result(s) of each unique test*; • Ordering of each unique test*; • Assessment requiring an independent historian Category 2: Independent interpretation of tests performed by another provider Category 3: Discussion of management or test interpretation with another provider | High Risk Examples only: • Drug therapy requiring intensive monitoring for toxicity • Decision regarding elective major surgery with identified patient procedure risk factors • Decision regarding emergency major surgery • Decision regarding hospitalization • Decision to resuscitate or to de-escalate care because of poor prognosis |
| Notes / Coding Tips: | Referral to another provider does not count toward addressing a problem | *In Category 1: Each unique test, order, or document contributes to category credit (i.e. reviewing or ordering a CBC, CMP, and TSH counts as 3 items toward category credit) | You may find that using elements 1 and 3 is a quick yet accurate method of determining the appropriate code |
Used with permission of the American Medical Association. ©Copyright American Medical Association 2019. All rights reserved.
High-level changes include the elimination of CPT code 99201 (Office or other outpatient visit for new patient evaluation and management requiring these three key components: a problem-focused history; a problem-focused examination; straightforward medical decision making). The CPT codes for new ambulatory patient services are now limited to four level of service (LOS) codes: 99202-99205. Established office/outpatient visits will continue to be coded through five levels using CPT codes 99211-99215.
In a sweeping change from the past, coding is no longer based on the extent of medical history or physical exam documentation. The degree of history documented, including family, past surgical and medical history, and a review of systems, is no longer used for coding. As such, providers may document only a history that’s relevant to the medical encounter.
A provider can choose the level of service either by the time spent in the visit or the complexity of medical decision making (MDM).
Time. The criteria used to determine total time spent in the visit now include all time spent on the day of the encounter. This includes, but isn’t limited to, precharting, reviewing test results, obtaining and reviewing the patient’s history, performing a physical exam, educating the patient, writing orders, and documenting in the chart. The previous requirement that 50% or more of the time be dedicated to counseling and coordination of care no longer exists. The time required for each CPT code is as follows:
| New Patient | Minutes |
|---|---|
| 99202 | 15-29 |
| 99203 | 30-44 |
| 99204 | 45-59 |
| 99205 | 60-74 |
| 99205 & 99417* (x1) | 75-89 |
| 99205 & 99417* (x2) | 90-104 |
| Established Patient | Minutes |
|---|---|
| 99211 | N/A |
| 99212 | 2021-10-19 00:00:00 |
| 99213 | 20-29 |
| 99214 | 30-39 |
| 99215 | 40-54 |
| 99215 & 99417* (x1) | 55-69 |
*CPT code 99417 is a prolonged services code that may be used when care extends beyond the maximum time allowed for codes 99205 or 99215. It’s billed in 15-minute increments.
The services used to justify time-based coding should be specified in the encounter. There are many ways to do this; one method is to include a phrase such as, “I spent 38 minutes on the day of the patient encounter reviewing the patient’s diagnostic tests, seeing the patient, discussing imaging with the radiologist, and documenting in the EHR.” Some EHRs may feature smart buttons or phrases with which a provider can select the time and activities for purposes of documentation.
The criteria used to determine total time spent in the visit now include all time spent on the day of the encounter.
If a physician and advanced practice provider (APP; i.e., nurse practitioner or physician assistant) perform a shared visit, the time that each provider spends separately can be counted and added together to determine the level of service for the visit. Time that the physician and APP spend together can be counted only once, however, and time that a resident physician spends with a patient alone does not count toward the total time. It’s also important to note that time spent during procedures billed through separate CPT codes, such as flexible laryngoscopy, does not count toward total time.
Medical Decision Making (MDM). The complexity of MDM is based on meeting elements from two of the three following categories (see the table on page 18 for more detailed information):
- Number and complexity of problems addressed during the encounter;
- Amount and/or complexity of data reviewed and analyzed; and
- Risk of complications and/or morbidity or mortality of patient management.
For otolaryngologists, MDM complexity is most often established through documentation of information from elements 1 and 3. It’s important for providers to separately list each problem along with its management. As always, detailing what information is reviewed and outcomes of patient management are vital not only for risk management but also for billing and coding.
Disclaimer note: Please check with your own compliance and risk office as per their interpretation of the CMS rules.
Dr. Verma is an assistant dean of clinical affairs at UC Irvine. He is also the director of the UCI Health Voice and Swallowing Center and the medical director of the department of otolaryngology–head and neck surgery.