Concern Mounting on Capitol Hill Over Impact of Medicare Budget Neutrality

November 9, 2020

As has been previously reported, the Centers for Medicare & Medicaid Services (CMS) finalized long needed reimbursement increases to outpatient evaluation and management (E&M) services starting in January 2021. By law, however, the Medicare Physician Fee Schedule (PFS) must remain budget neutral, so some services will experience a decrease in reimbursement to offset the increase to outpatient E&M services.

CMS proposed a physician fee schedule conversion factor (CF) of $32.2605 in 2021—a $3.83 or 10.6% cut from the 2020 CF of $36.0896. This negative adjustment, which impacts all services across the PFS, is the result of the budget neutrality requirement and changes in relative value units (RVUs). The changes in RVUs are driven largely by updates to Current Procedural Terminology (CPT ®) codes for E&M services that were finalized in the 2020 PFS Final Rule and become effective January 1, 2021.

Recently, Representatives Ami Bera, MD, (CA) and Larry Bucshon, MD, (IN) introduced H.R. 8702, the Holding Providers Harmless from Medicare Cuts During COVID-19 Act of 2020, in the Unites States House of Representatives. This legislation would provide a temporary additional payment in the amount of the difference between 2020 and 2021 CF rates for two years for services seeing a reimbursement cut. This proposal adds to a menu of solutions being considered by Congress as possible provider relief efforts.

Representatives Michael Burgess, MD, and Bobby Rush previously introduced H.R. 8505, which would waive the application of Medicare budget neutrality for one year—legislation that the Association for Clinical Oncology (ASCO) supports.

ASCO believes the best solution to protect resources for patients throughout the cancer care system is to waive budget neutrality. The Association strongly supports the CMS proposed increases to E&M codes and will continue to weigh in as solutions are proposed in Congress.

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