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2021 E/M Changes: How Work RVU Increases Could Affect Physicians Pay

2021 E/M Changes: How Work RVU Increases Could Affect Physicians Pay

February 25, 2021
Alicia Shickle

The work relative value units (wRVUs) for most office-based E/M codes 99202-99215 increased on January 1st as part of the 2021 Medicare Physician Fee Schedule. The major E/M coding guideline changes that went into effect January 1st required leadership to forecast and prepare for significant financial, workflow, and compliance impacts that have come along with this industry change. How the increased wRVUs will affect physician’s compensation for many depends on several factors, including payer contracts and compensation models.

Many physician employment agreements are structured in a way that ties compensation to the wRVU. Many hospitals with physician practices are finding that they either underestimated the financial impact or did not budget accordingly for the increase in the wRVU, and how it was going to affect physician compensation.

Concerns include:

  • Provider compensation may increase at a significant and unsustainable rate
  • Providers may adjust to maintain the same wRVU’s, and productivity will fall

While many practices offered initial 2021 E/M training for providers and staff, they are still struggling to correctly apply the changes to their daily workflow and patient encounters. Probe audits are confirming that many providers are missing out on opportunities, leaving revenue on the table, using documentation macros that are no longer applicable, and are potentially setting themselves up for overpayment recovery if audited by a healthplan.

Now is a critical time to understanding the financial impact, review employment agreements if you haven’t already, make sure documentation & coding are 100% compliant, and test for effectiveness via auditing.

Should you have any questions regarding the above, please contact Alicia Shickle at alicia@garfunkeladvisors.com  or (833) 355-1333.

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