Medicare Physician Fee Schedule Conversion Factor Updated to Reflect 2021 Federal Funding Package

January 6, 2021

The Centers for Medicare & Medicaid Services (CMS) announced a revised Medicare Physician Fee Schedule (PFS) Conversion Factor (CF) of $34.8931 for 2021. This represents a 3.3% reduction from the 2020 CF of $36.0869. CMS updated the CF as a result of a provision in the $1.4 trillion Consolidated Appropriations Act of 2021 (H.R 133), which was signed into law on December 27, 2020.

The legislation injects $3 billion into the PFS in 2021, directing Medicare to make a 3.75% positive adjustment to physician payments in 2021, offsetting some of the 10.2% reduction originally finalized. This 3.75% increase is temporary in 2021. Following 2021, the Association for Clinical Oncology (ASCO) expects the conversion factor to be reduced by 3.75%—prior to budget neutrality adjustments—without congressional action. The legislation also placed a three-year moratorium on payment for the add-on code (G2211) for inherently complex evaluation and management (E&M) visits under the Physician Fee Schedule until 2024, further offsetting the cut.

ASCO’s internal analysis shows that the medical oncology specialty benefits from increased E&M values with an estimated 12% rate increase. The gynecologic oncology specialty benefits with a rate increase of 5.4%, and the radiation oncology specialty is expected to receive a 2.1% rate increase. These are estimates, since actual rate changes will vary by practice, patient mix, and geographic location. CMS did not adopt updates to Relative Value Unit (RVU) values for E&M services included in global surgical and radiation services, resulting in disparate impacts by specialty. For the full report, visit ASCO Practice Central.

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