We’ve seen the changes to the 2021 Medicare Physician Fee Schedule (MPFS). Let’s explore the potential financial impact for ophthalmologists.

NEW DETERMINATION

Separate from the MPFS changes, the AMA announced a comprehensive revision of the office and outpatient evaluation and management (E/M) codes (992xx) effective Jan. 1, 2021. The most important aspect of this dramatic change is the determination of the level of service based solely on medical decision making (MDM) or physician time spent. Counting the elements of the history and exam no longer determines the level of service. CMS has embraced the AMA’s changes.

For a typical ophthalmology practice, in-office eye exams represent about 38% of all collections based on average utilization rates and national payments within the Medicare program, excluding physician-administered drugs. Prior to 2021, eye codes represented 57.2% of new patient exams and 77.6% of established patient exams performed on Medicare beneficiaries by ophthalmologists; optometrists had similar proportions. E/M codes weren’t favored because required chart documentation was longer, payment rates were lower than the equivalent eye codes and code selection was more complicated and subjective with a high error rate (42%).¹

Still, eye codes do not suffice for every eye exam due to requirements defined in CPT, so E/M codes are selected in 26.5% of all office visits performed on Medicare beneficiaries.²

WHAT IT MEANS FOR YOU

To assess the financial impact of the 2021 E/M revision and, at the same time, the 2021 MPFS, we need to consider several possible situations and responses. To compare them objectively, we calculated the weighted average value of eye exams in 2020 and 2021 based on:

• The 2020 and 2021 national MPFS
• An assumption of 20% new patients and 80% established patients
• Utilization rates for each CPT code²

First, we looked at the financial impact of the MPFS changes with the assumption that utilization patterns are unchanged. In Table 1, we tabulated the most current Medicare utilization rates for ophthalmologists for eye exams and did not change it in 2021 as shown in the frequency column (λ). The table also shows the national Medicare payment rates for each code in 2020 and 2021.

For new patients, the weighted average payment increased 1.0% ($150.44 to $151.95). For established patients, it increased 4.2% ($107.77 to $112.26). When a 20/80 distribution is used for new and established patients, respectively, the weighted average for all eye exams increased 3.4% ($116.30 to $120.20).

But what happens if a practice were to shift utilization in response to the AMA’s changes and the MPFS? In Table 2, we assumed that the ophthalmologists changed direction in 2021 and used more E/M codes than eye codes (85% to 15%, respectively) but maintained roughly the same level of service as shown in the frequency column (λ). As in Table 1, the MPFS is shown for each year.

For new patients, the weighted average payment increased 5.5% ($150.44 to $158.66). For established patients, it increased 6.6% ($107.77 to $114.87). When the same 20/80 distribution is used for new and established patients, respectively, the weighted average for all eye exams increased 6.1% ($116.30 to $123.63).

IT’S GOOD FOR EYE CARE

What can we learn from these analyses? A partial shift from eye codes to E/M codes significantly improves the financial outcome for ophthalmology. History teaches us that a mix of eye codes and E/M codes is best to optimize income and ensure accurate coding, but the proportions can change to favoring E/M codes. In our experience, certain third-party payers, particularly vision plans, prefer eye codes to report routine eye exams, so using E/M codes exclusively isn’t practical. Furthermore, despite the proposed lower payment rates for eye code, there are many instances where the corresponding E/M code for the same eye exam would be a worse choice, so it is best to keep your coding options open.

These results do not account for increasing the number of eye exams thanks to reduced physician and staff time spent on charting. The AMA estimates 180 hours of time saving per year per full-time physician that can be put to better use seeing patients.³ That represents about 11% of the time spent in clinic by the average ophthalmologist (1,656 clinic hours per year, 46 weeks a year, 4 days a week, 9 hours a day).

In summary, the 2021 MPFS preserves payment rates for eye codes, which is good news, but the increase in payments for E/M codes is even better. After careful analysis, we believe educating physicians and staff about the new E/M coding and billing guidelines and simultaneously partially shifting away from eye codes will significantly increase payments while offering an opportunity to see a few more patients per day and improve revenue. Using conservative assumptions of one additional visit per half day session, Corcoran Consulting Group estimates the increased income amounts to $36,800 per full-time physician per year. OM

REFERENCES

1. Levinson DR, Department of Health and Human Services, Office of inspector General. Improper payments for evaluation and management services cost Medicare billions in 2010. May 2014. https://oig.hhs.gov/oei/reports/oei-04-10-00181.pdf . Accessed Jan. 13, 2021.
2. Utilization rates for Medicare Part B claims as calculated by Corcoran Consulting Group, using CMS Summary Data for 2018.
3. Cobuzzi B. AMA on Evaluation and Management Guidelines for 2021. AAPC June 18, 2019 https://www.aapc.com/blog/47400-ama-on-evaluation-and-management-guidelines/ . Accessed Jan. 13, 2021.

Suzanne L. Corcoran is vice president of Corcoran Consulting Group. She can be reached at (800) 399-6565 or www.corcoranccg.com .