Have you ever wondered how Medicare sets reimbursement rates for physicians? These rates are extremely important because they not only affect Medicare payments, but they serve as the basis for which private payers establish their own individual payment levels.
When CMS released its final 2020 physician fee schedule in November 2019, the agency decided to finalize its proposal to increase the value in the value of the ED E/M codes. This increase was the result of many months of behind-the-scenes work by ACEP members and staff working on your behalf to advocate for the profession as a whole.
Every year, the Centers for Medicare & Medicaid Services (CMS), the federal agency that runs Medicare, identifies specific physician codes that the agency believes are valued too high or too low. CMS sends this list of potentially mis-valued codes to a committee run by the American Medical Association (AMA) called the Relative Value Scale Update Committee (RUC). Through the process described below, the RUC makes specific recommendations for the values of each of the CMS codes. CMS then decides, through federal rulemaking, whether to accept or reject the RUC recommendations for each code.
What is the RUC?
The RUC is comprised of 31 members who represent the entire medical profession, including 21 who are appointed by specialty associations. Members represent those recognized by the American Board of Medical Specialties. ACEP is the only emergency medicine organization with a seat at the RUC table.
Each society represented on the RUC, including ACEP, works through the following process:
As the only voice for emergency medicine on the RUC, ACEP has an appointed RUC Representative and an Alternate RUC Representative who both attend RUC meetings as voting representatives of the House of Medicine. The representatives are not there to advocate for their individual specialties, but rather to contribute their specialized content knowledge to the deliberating body. In 2018, ACEP was represented by Jennifer Wiler, MD, MBA, FACEP, as our RUC Representative, and Michael Gerardi, MD, FACEP, as our RUC Alternate Representative. Our current RUC Representative is John Proctor, MD, MBA, FACEP.
As ACEP’s RUC Advisors in 2018 when these codes were considered, Ethan Booker, MD, FACEP, and Jordan Celeste, MD, FACEP, presented our data to the RUC for consideration and voting. ACEP’s team also includes staff members David McKenzie, CAE, ACEP Reimbursement Director, and Adam Krushinskie, MHA, Reimbursement Manager who conduct the detailed membership surveys as part of the RUC process and provides information and evidence for our RUC representatives to use during his/her presentations to the committee.
In 2017, CMS identified the Emergency Department (ED) Evaluation and Management (E/M) codes as potentially mis-valued. These codes, which include five levels of complexity (Levels 1-5), are billed by the majority of our members and represent roughly 85 percent of EM services.
ACEP’s RUC team managed the RUC’s review of these codes—first surveying ACEP members and then using the survey results to develop recommendations for the RUC. It’s not easy to convince the RUC to increase the value of a code because a budget neutrality requirement under the Medicare PFS dictates that any increases in the value of one code means a corresponding decrease in the value of all other codes. An increase in one specialty’s code results in decreasing the code for another specialty. During the last RUC cycle, only approximately 9 percent of codes identified as potentially mis-valued received value increases.
Our team knew we had to provide a very compelling argument to convince at least two thirds of the other RUC voting specialties to support our recommended values. Using the data collected through our member surveys, Drs. Booker and Celeste convinced the RUC that the ED E/M codes were undervalued. The RUC approved increases of 1.5 to 6.5 percent for Levels 1 through 4 while keeping Level 5 the same.
In the Calendar Year (CY) 2020 PFS final rule, CMS accepted the RUC’s recommendation, thereby resulting in an increase in ED E/M Medicare payments of approximately $130 million in 2020 before any additional budget neutrality adjustments.
CMS has accepted the RUC’s recommendations and is increasing payments for ED E/M services in 2020, but our work is not done. In the same final rule, CMS also finalized a proposal to increase the office and outpatient E/M services in 2021. Medicare requires that overall changes to Medicare physician payments be budget neutral, so this adjustment to the office and outpatient E/M codes is likely to reduce reimbursement to emergency medicine. So, while emergency physician services will be more appropriately valued in 2020, payments for these same services may be significantly reduced the following year. Fortunately, CMS is leaving the door open to re-evaluating this policy in next year’s PFS rule, and ACEP will be working hard to ensure that these payment reductions do not become a reality in 2021.