Rheumatology Policy and Reimbursement: What Changed and What to Expect in 2021

February 10, 2021
David R. Karp, MD, PhD
David R. Karp, MD, PhD

Dr. Karp is the 84th president of the American College of Rheumatology. He is chief of the Rheumatic Diseases Division at UT Southwestern Medical Center, Dallas, a role he has held for the past 18 years.

Dr David R. Karp, president of the American College of Rheumatology (ACR), outlines some of the legislative and regulatory developments of last year that had significant impacts on rheumatology practices and provides a policy outlook for the year ahead.

2020 was quite a year. As we look to move forward, I would like to outline some of the legislative and regulatory developments of last year that had significant impacts on rheumatology practices and provide a policy outlook for the year ahead, including some of the issues the American College of Rheumatology (ACR) will be closely tracking.

Changes in the Physician Fee Schedule in 2021

Perhaps one of the most significant and closely watched developments was the annual Medicare Physician Fee Schedule (PFS) rule. The 2021 PFS, which took effect on January 1, was particularly important to rheumatology. Beginning this year, the Centers for Medicare and Medicaid Services (CMS) will align reimbursement for evaluation and management (E/M) services with the changes created by the American Medical Association’s (AMA) current procedural terminology (CPT) editorial panel. These changes substantially increase reimbursement for E/M services provided by rheumatologists and other cognitive care specialties to a level that appropriately values these services.

As many providers are aware, E/M services have long been undervalued by Medicare. A 2018 report from the Medicare Payment Advisory Commission (MedPAC) found that E/M services are undercompensated. Other estimates show that Medicare reimburses physicians between 3 and 5 times more for procedural care than it does for equivalent time spent providing E/M services.

This year’s E/M changes were the result of tireless advocacy on the part of the ACR and other specialty groups, who worked in conjunction with the AMA and more than 170 medical societies and state medical associations urging CMS to finalize these changes. It also marks a major reversal from two years ago when CMS proposed a “code collapse” that would have resulted in significant reimbursement cuts for rheumatology care provided to Medicare beneficiaries.

In addition to fee increases, a long-sought modernization of documentation requirements was put in place. Providers will no longer have to select the level of an E/M visit based on repetitive history and physical examination. Instead, E/M services from levels 2 through 5 will be based on either the re-defined medical decision-making or total time spent by the provider. Providers will still need to record the parts of the history and exam in the medical record that are reasonable, necessary, and clinically appropriate, but it will not be used to determine the visit level code submitted for reimbursement. These changes should make coding office visits more straightforward and flexible with fewer documentation burdens and a more streamlined reporting process.

Major Highlights of the COVID Relief and Omnibus Bill

On December 27, 2020, with just days left in the 116th Congress, the president signed the Consolidated Appropriations Act 2021. That bill combined $900 billion from a coronavirus disease 2019 (COVID-19) relief package with a $1.4 trillion omnibus appropriations bill to fund the federal government through September. In addition to supplying crucial relief to providers through the Provider Relief Fund and the Paycheck Protection Program, the bill also made significant investments in the healthcare workforce. A total of 1000 new Medicare-funded graduate medical education (GME) residency provisions will be added starting in 2023.

The bill not only ensured that the new E/M coding changes stay on track for implementation, but it also suspended the 2% Medicare sequester payment reductions through the end of March. The bill included additional support to practices during the COVID-19 public health emergency with a one-time, across-the-board 3.75% increase in Medicare payments for 2021.

Unfortunately, the bill also stipulated that the G2211 add-on HCPCS code (which was created as a part of the 2021 PFS to capture the work of outpatient E/M visits not accounted for in the valuation of the primacy outpatient E/M code) will be delayed until 2024. This was done to mitigate some of the expected cuts other medical specialties were facing from the 2021 PFS.

In summary, rheumatologists are projected to see an estimated average 14-15% increase in reimbursement from previous years. The long-awaited updates to the outpatient office E/M codes are an essential part of the CMS’s commitment to allow providers to spend more time with patients on critical activities related to chronic disease management. On a national average, rheumatologists could see an increase of $16.25 to $21.96 for level 3 and level 4 E/M visits due to higher physician work relative value units (RVUs) and the conversion factor. These changes are the first step in reforming a system that has misunderstood the complexity of and work needed to provide cognitive care to a large portion of the population with rheumatic and musculoskeletal disease.

You can see a complete summary of the highest impact changes here.

Looking Ahead

As we make our way through 2021, we can expect more developments that will impact the rheumatology specialty. For its part, the ACR is closely monitoring developments in the new Congress and Administration as they unfold.

We plan to continue engaging with policymakers to ensure that appropriate reimbursement for cognitive care specialists is protected in upcoming rulemaking and legislation. We will also be advocating for a set of policy priorities that were recently developed by our Government Affairs Committee and approved by our Board of Directors.

These include:

  • Strengthening the rheumatology workforce by advocating for increasing the number of GME residency slots, providing more funding for the GME program and medical student loan forgiveness programs.
  • Expanding patient access to telemedicine by extending reimbursement parity for in-office and audio-visual visits beyond the end of the public health emergency.
  • Reducing the burden of prior authorization on patients and providers by advocating for legislation and regulatory changes that will establish a uniform electronic prior authorization process compatible with electronic health records.
  • Supporting increased federal funding for rheumatic disease research as well as the establishment of a standalone arthritis research program at the Department of Defense.
  • Lowering prescription drug costs by supporting policies that limit or cap out-of-pocket prescription drug costs for Medicare and commercially insured patients, streamline the development of biosimilars and generics, and allow Medicare to negotiate with pharmaceutical companies to achieve more affordable drug prices. The ACR will also continue to oppose misguided efforts to address drug costs like the Most Favored Nation (MFN) demonstration model as well as insurer attempts to control costs through new utilization management techniques.

To conclude, The ACR is optimistic about continued improvements in federal regulations and advocacy success. We look forward to representing the rheumatology community and working closely with legislative and regulatory stakeholders to advance our policy priorities in 2021.

Dr. Karp is the 84th president of the American College of Rheumatology. He is chief of the Rheumatic Diseases Division at UT Southwestern Medical Center, Dallas, a role he has held for the past 18 years.

For the past 15 years, Dr. Karp’s research has focused on systemic lupus erythe­matosus, including the of use of genomics and proteomics to help understand disease progression. He joined the ACR during his fellowship and has been involved as a volunteer for the past 17 years, serving in various committee roles, leading the Rheumatology Research Foundation and serving on the ACR Board of Directors’ Executive Committee.