How the E/M code RVU increases could affect family physicians’ pay

The work relative value units (RVUs) for office-based E/M codes 99202-99215 increased on Jan. 1 as part of the 2021 Medicare Physician Fee Schedule. (See the new values in the table below.) The increased values were part of a broader effort to reform E/M coding and reduce the documentation burden.

How the increased RVUs will affect family physicians depends on several factors, including their payer contracts and their compensation model.

For Medicare, total RVUs (comprised of work, practice expense, and malpractice RVUs) are multiplied by the year’s conversion factor ($34.89 for 2021) to determine the payment allowance for each code. Overall, Medicare payments for family physicians are expected to increase more than 10% due to the E/M revaluation and other changes.

For private payers, the Medicare physician fee schedule often forms the basis of their own fee schedules, but they may use a prior year’s fee schedule or pay only a negotiated percentage of the Medicare physician fee schedule. If private payers do not automatically adjust their fees based on the updated RVUs, physicians may need to renegotiate these contracts. Physicians in solo and independent practice should check with their private payers on this issue. (See “Questions to Ask Private Payers.”)

For employed physicians, compensation usually takes the form of a base salary supplemented with an incentive/productivity bonus based on factors such as work RVUs, collections, and quality. If RVUs make up a significant portion of your compensation formula, talk to your administrator about how the increased values for office visit E/M codes will affect your pay and whether productivity targets will change. (See “Talking Points for Employed Physicians.”)

Read about additional payment and coding changes in the full article in FPM: “The 2021 Medicare Payment and CPT Coding Update.”