Last year, the Centers for Medicare and Medicaid Services (CMS) physician fee schedule (PFS) included a reimbursement increase for emergency department evaluation and management (E/M) codes.
This increase was approximately 3% and corrected a valuation disparity between the emergency medicine E/M codes and the office and outpatient E/M codes.
The proposed PFS for 2021 increases reimbursement for office and outpatient E/M codes and thereby reduces the conversion factor by approximately 10.6% to maintain budget neutrality. The proposed conversion factor for 2021 will be one of the lowest in the past 25 years. This not only offsets the increase in 2020 for emergency department E/M codes, it creates a net negative effect to the PFS of approximately 6% for emergency medicine providers. The proposed 2021 rule undoes all the good work to attain equivalency achieved in 2020 and more.
There is agreement that the PFS must support patients’ access to care first and foremost, yet front-line emergency providers are being targeted for cuts during a pandemic. “Emergency physicians are not eligible for inflationary adjustments, and reimbursements have declined roughly 30% over the past 20 years,” according to Dr. Anthony Cirillo, Director of Health Policy & Legislative Advocacy, U.S. Acute Care Solutions. “Physicians put themselves and their families at risk to ensure that patients receive quality care. It’s disingenuous to call them heroes while reducing their funding. It’s like sending military personnel to war while cutting their pay.”
Other Factors Contribute to Gathering Clouds
Emergency department volume has dropped as much as 50% at its nadir in many markets. While numbers have begun to rebound, volume remains 15 to 20% below pre-pandemic levels. Emergency departments have tightened their belts to the point that there is no room for additional cuts. This may force the elimination of part-time staff, fewer available hours for less experienced physicians, or permanently unfilled positions.
According to Credible, an online lending marketplace, 8 in 10 medical school graduates carry an average of $251,600 in student loan debt. The average time to repay this debt is thirteen years. With this debt burden, as well as the desire for career experience, purchasing a home, and raising a family, the current economic situation for physicians early in their careers is full of uncertainty.
According to data from the National Center for Health Statistics, approximately one in seven emergency department patients is uninsured. “Emergency physicians enter a social contract when it comes to saving lives, even when patients are unable to pay. This contract relies on the other constituents in the healthcare ecosystem to fulfill their obligations, including holding commercial payers accountable,” says Jeffrey Davis, Director of Regulatory Affairs at the American College of Emergency Physicians (ACEP). In some cases, large payers are earning tens of millions of dollars per day in profit. Shouldn’t payers, hospitals, outpatient facilities, and physicians work together to fund services during this time of extreme need?
Uncertainty surrounding proposed surprise billing legislation puts additional financial pressure on vulnerable hospitals — especially rural hospitals. Emergency physicians must be considered in any surprise billing law.
Davis adds, “Many legislators don’t realize that most emergency physicians are not employees of the hospitals where they work. Hospital funding from the CARES Provider Relief Fund is not shared with them. Despite their essential role on the front lines of the pandemic, they don’t have a voice when it comes to standing up for their interests.”
Opportunity Emerges from Tragedy
Perhaps one positive outcome of the pandemic is the bright light shining on inconsistencies and gaps in the healthcare system. There is an opportunity to reimagine how to deliver care over the next decade or more and ask:
- How will providers deliver exceptional care to Medicare beneficiaries when the Medicare Trust is running low, even as rolls and incidences of chronic illness grow?
- How can high-quality care be provided at a sustainable cost?
- How can providers leverage telehealth to provide more convenient, cost-effective care?
- How can the operation of the rural hospitals and those with high volumes of Medicare, Medicaid, or uninsured patients be reimagined?
We must tackle these questions with a long view when re-envisioning the U.S. healthcare system. “That includes keeping patients’ needs top of mind while pursuing value. This may be one of the most important initiatives for us to tackle as a nation,” says Cirillo
For the near term, advocating for hospitals to provide emergency physician subsidies is one option for closing the compensation gap. ACEP suggests some alternatives in its comments on the Medicare PFS proposals for 2021, including:
- Delaying the implementation of the add-on code for complexity (GPC1X), estimated to free up more than $3 billion in 2021
- Implementing a 20% COVID-19 professional services claims-based payment adjustment
- Using the 1135 waiver authority under the public health emergency to waive budget neutrality requirements for 2021
- Increasing the value of emergency department E/M codes to bring parity with office and outpatient E/M codes
Cirillo and Davis agree that implementing ACEP's recommendations would give emergency physicians a lifeboat to ride out the looming imperfect storm. Advocating for change has never been more important than right now. Let your voices be heard.
To learn more about ZOLL Data Systems, click here.