Association of Evaluation and Management Payment Policy Changes With Medicare Payment to Physicians by Specialty

Abstract

Importance: US primary care physicians (PCPs) have lower mean incomes than specialists, likely contributing to workforce shortages. In 2021, the Centers for Medicare & Medicaid Services increased payment for evaluation and management (E/M) services and relaxed documentation requirements. These changes may have reduced the gap between primary care and specialist payment.

Objectives: To simulate the effect of the E/M payment policy change on total Medicare physician payments while holding volume constant and to compare these simulated changes with observed changes in total Medicare payments and E/M coding intensity, before (July-December 2020) and after (July-December 2021) the E/M payment policy change.

Design, setting, and participants: Retrospective observational study of US office-based physicians who were in specialties with 5000 or more physicians billing Medicare and who had 50 or more fee-for-service Medicare visits before and after the E/M payment policy change.

Exposures: E/M payment policy changes.

Main outcomes and measures: Outcomes included physician-level simulated volume-constant payment change, total observed Medicare payment change, and share of high-intensity (ie, level 4 or 5) E/M visits before and after the E/M payment policy change. For each specialty, the median change in each outcome was reported. The payment gap between primary care and specialty physicians was calculated as the difference between total Medicare payments to the median primary care and median specialty physician.

Results: The study population included 180 624 physicians. Repricing 2020 services yielded a simulated volume-constant payment change ranging from a 3.3% (-$4557.0) decrease for the median radiologist to an 11.0% ($3683.1) increase for the median family practice physician. After the E/M payment change, the median high-intensity share of E/M visits increased for physicians of nearly all specialties, ranging from a -4.4 percentage point increase (dermatology) to a 17.8 percentage point increase (psychiatry). The median change in total Medicare payments by specialty ranged from -4.2% (-$1782.9) for general surgery to 12.1% ($3746.9) for family practice. From July-December 2020 to July-December 2021, the payment gap between the median primary care physician and the median specialist shrank by $825.1, from $40 259.8 to $39 434.7 (primary care, $41 193.3 in July-December 2020 and $45 962.4 in July-December 2021; specialist, $81 453.1 in July-December 2020 and $85 397.1 in July-December 2021)-a relative decrease of 2.0%.

Conclusions and relevance: Among US office-based physicians receiving Medicare payments in 2020 and 2021, E/M payment policy changes were associated with changes in Medicare payment by specialty, although the payment gap between primary care physicians and specialists decreased only modestly. The findings may have been influenced by the COVID-19 pandemic, and further research in subsequent years is needed.

Figure 1.. Percent Change and Mean Medicare Reimbursement for Office-Based E/M Services, 2020 vs 2021

Each dot indicates the annual mean payment for each evaluation and management (E/M) service, using all claims for services provided an in office by physicians, between January 2020 and December 2021. These E/M services (new-patient visits, Healthcare Common Procedure Coding System [HCPCS] codes 99203-99205; established-patient visits, HCPCS codes 99212-99215) represent a subset of all HCPCS services codes. For exact dollar values, relative changes, and sample sizes, see the eTable in the Supplement.

Figure 2.. Median Relative Change in Simulated Volume-Constant Payment, by Specialty

Data represent the change in Medicare payments after repricing all services provided July-December 2020 at 2021 rates. For each box, the central bar indicates the median values for physicians of each specialty; the surrounding box indicates the interquartile range (ie, values for the 25th and 75th percentile). Figure includes the 14 specialties with 5000 or more office-based physicians billing Medicare in 2020 and 2021.

Figure 3.. Median Primary Care and Specialty Physician Medicare Payments in July-December 2020 and July-December 2021

For each box, the central bar indicates the median values for physicians of each specialty; the surrounding box indicates the interquartile range (ie, values for the 25th and 75th percentile). Primary care includes family practice and internal medicine. Simulated Medicare payments refer to the repricing of services provided in July-December 2020 at 2021 reimbursement levels.

Figure 4.. Median Share of High-Intensity E/M Coding, July-December 2020 and July-December 2021, by Specialty

For each box, the central bar indicates the median values for physicians of each specialty; the surrounding box indicates the interquartile range (ie, values for the 25th and 75th percentile). Figure includes the 14 specialties with 5000 or more office-based physicians billing Medicare in 2020 and 2021. E/M indicates evaluation and management. ^aThe 25th percentile of radiologists bill 0.0% of their E/M visits at level 4 or 5.

Figure 5.. Median Relative Change in Total Medicare Payments from July-December 2020 to July-December 2021, by Specialty

For each box, the central bar indicates the median values for physicians of each specialty; the surrounding box indicates the interquartile range (ie, values for the 25th and 75th percentile). Figure includes the 14 specialties with 5000 or more office-based physicians billing Medicare in 2020 and 2021.