Centers for Medicare and Medicaid Services (CMS) Evaluation and Management (E&M) Coding Changes May Impact Work Relative Value Unit (wRVU) Based Physician Compensation Arrangements and Fair Market Value

Physician contracts including those with wRVU based compensation components may need to be reviewed or possibly amended due to increase in wRVUs associated with E&M Current Procedural Terminology (CPT) codes effective January 1, 2021. A comparison of the 2021 vs. 2020 E&M CPT Codes is presented below:

At a minimum, organizations should assess the financial impact and potential increase to physician compensation by forecasting compensation expense and practice revenue under calendar year 2021 Physician Fee Schedule (PFS). Based on CMS’ 2021 Final Rule and as noted in the wRVU adjusted table above, results in the potential for substantial increase in physician compensation, dependent on the structure of the compensation arrangement and level of units billed for the Healthcare Common Procedure Coding System (HCPCS) Codes noted above. The increase may not impact those physician contracts where there are compensation caps or where individual productivity might not result in additional compensation.

The table below summarizes the estimated impact of the finalized changes to overall wRVUs and reimbursement for each CMS defined specialty:

For further information regarding the assessment of the potential impact on physician compensation, productivity and fair market value considerations, please contact a member of our Somerset Health Care Team at 317-472-2200 or .