CMS Issues 2021 Physician Payment Schedule – Budget Neutrality Requirements Impose Cuts

The Centers for Medicare & Medicaid Services (CMS) released the 2021 Medicare Physician Payment Schedule Final Rule. The AMA is now analyzing the rule and will release a detailed summary shortly. Despite lobbying by the AMA, state medical associations including ArMA, and other physician organizations that CMS should waive the budget neutrality impacts of the Medicare E/M policies in light of the COVID-19 public health emergency, CMS has finalized a significant budget neutrality adjustment.

The CY 2021 physician payment conversion factor is $32.41, a decrease of $3.68 from the CY 2020 conversion factor of $36.09. This is a decrease of 10.2%. The CY 2021 anesthesia conversion factor is $20.04, a decrease of $2.15 from the CY 2020 conversion factor of $22.20. For a table showing the specialty payment impacts, see the chart here. R distributions will be significant, with family medicine increasing by 13% and many specialties that do not perform office visits decreasing by 8% or more.

Because CMS does not offer any relief from the budget neutrality cuts in the final rule, pressure is being applied to Congress to avert the more than 10% cut as physicians are experiencing substantial economic hardships due to the COVID-19 public health emergency. Organized medicine, including ArMA, will continue to be vocal about the fact that these cuts will directly impact care to COVID-19 patients, as payments for hospital visits, critical care visits, nursing home visits, and home visits are among those being slashed. Stay tuned for updates as we receive additional information.