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CODING

Impact of 2021 evaluation and management coding changes to WRVU based physician compensation

By John McDaniel bio

As you may know, all physician contracts which include any form of WRVU based compensation will need to be reviewed and probably amended due to the increase in WRVUs (work relative value units) associated with E&M CPT codes effective Jan. 1, 2021.

We recently conducted an assessment for one of our hospital clients which showed the ʺunintended consequencesʺ of increased compensation to the physicians/providers and the resultant impact to fair market value standards. This has been necessitated by CMS whereby the final decision involved eliminating CPT Code 99201 and leaving CPT Code 99211 unchanged. The changes for CPT Codes 99202‐99205 and 99212‐99215 have resulted in increased reimbursement since the WRVUʹs for these codes have increased. Indeed, the increase in the WRVU component will certainly affect physician compensation where applicable.

While the major commercial payers have not announced their intention to utilize the 2021 E&M codes, those decisions will greatly impact both provider reimbursement and WRVU utilization. It should be noted that CMS is making these changes on a budget neutral basis whereby the increase in selected WRVUʹs, particularly E&M codes, will be offset by CMS decreasing the Medicare compensation rate from $36.09 to $32.26. Following is an Executive Summary of the Medicare Physician Fee Schedule Rule published by the Healthcare Financial Management Association (HFMA). Please note the overall impact of the WRVU changes by specialty.

For further information regarding the assessment of the potential impact on physician compensation, productivity and fair market value considerations, please contact us.


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