Healthcare Strategic Growth Blog

Be Equipped to Address the Fallout of this Legislation 

By Stephen Burgess, Ancore Health, and Michael Shipley, Stratasan

On July 1, 2021, the Departments of Health and Human Services, Labor, and Treasury, and the Office of Personnel Management issued an interim final rule to implement fundamental parts of the No Surprises Act (NSA). Despite the disarming title, the No Surprises Act will lead to many surprises, around lack of parity in reimbursements within a market. In upcoming years, payers and providers will be forced to evaluate their value proposition, market positioning, customer/patient transparency, and data analytics.

The NSA contains key protections to hold consumers harmless from the cost of unanticipated out-of-network medical bills. According to the Kaiser Family Foundation, “surprise bills lead the list of affordability concerns for many families; 2 in 3 adults say they worry about unexpected medical bills, more than the number worried about affording other health care or household expenses.  Surprise bills can number in the millions each year.”

While the major implications of the NSA will benefit consumers, the severity of impact that this legislation will have on payers and providers will depend on how they react. In this post, we’ve worked to summarize this new law and discuss some of the ways that both providers and payers can be prepared to act.

How E&M Code Changes Will Impact Reimbursement Discussions

By Michael Shipley and Morgan Atkins

Beginning in Q1 2021, significant adjustments went into effect for how payments are calculated for physician services. These changes are the result of modifications to the Calendar Year 2021 Medicare Physician Fee Schedule (MPFS).

These updates will particularly help both primary care providers (PPC) and specialists that bill high volumes of Evaluation and Management (E&M) codes. It will hurt specialists who bill mostly for procedures rather than E&M visits. Consider these specialist examples:

• An orthopedic surgeon who derives the majority of their income from surgeries, and bills few E&M visits. Their surgery reimbursement will go down, and the increase in E&M reimbursements may not be enough to cover the difference.
• An endocrinologist who bills a lot of E&M visits for the management of diabetes will benefit from these code changes, receiving more for each E&M billed visit.

As summarized by Gist Healthcare, the implication of these changes will result in “higher pay for some primary care physicians and medical specialists, but reduced payment for many proceduralists.”

Our partners at Ancore Health provided a helpful summary of how reimbursement is calculated, and the impact of this update, in this blog post.

How will Payers Respond?

These changes, which make E&M coded visits more financially valuable, were a significant move by CMS to prioritize primary care and increase the focus on value-based interactions. The clear goal is to encourage more facetime with patients, which can give physicians the opportunity to catch health issues in earlier stages. Quality primary care patient interactions can happen when quantity isn’t the priority.