Following passage of the Affordable Care Act, the Centers for Medicare and Medicaid Services (CMS) have undertaken numerous efforts to change how physicians are paid. Two of the more notable initiatives include reform of the Medicare Physician Fee Schedule and implementation of the Quality Payment Program. Both initiatives will alter physician incentives, which could influence practice patterns.

The revisions to the Medicare Physician Fee Schedule took effect on January 1, 2021, altering how physicians are reimbursed for office visits. One of the most common services physicians provide are office visits, which are billed as Evaluation and Management (E/M) services. Previously, CMS reimbursed office visits using 5 levels of codes that were meant to capture degree of complexity, medical decision making and time. The higher the level billed, the more a physician was reimbursed. However, documentation guidelines for these office visits had strict requirements that many viewed as burdensome. Physician organizations commented that this system led to unnecessary documentation that obscured the relevant information for patient care and hastened physician burnout. To simplify the documentation and reimbursement system, CMS implemented Physician Fee Schedule Reform. The reform outlines several key features that will impact urology office visit reimbursement:^1,2

1. New patient visit E/M codes will be reduced to 4 levels, and established visits will remain at 5 levels (table 1).
2. The work relative value units (RVUs) will be increased for each E/M code (table 1). However, to remain budget neutral and offset the E/M price increases, the RVU conversion factor will be reduced by 3.32%. The reduction, which was intended to be almost 10%, was mitigated by the Consolidated Appropriations Act, although this is expected to decrease an additional 3.89% beginning in 2022.
3. Documentation requirements for History and Physical Examination will be eliminated, requiring only pertinent information to be documented.
4. Physicians may choose a visit level based on either time or medical decision making. If time is chosen, the reported time may include all physician effort on the day of the encounter, even effort that is not necessarily face to face. If medical decision making is chosen, the level will depend on the number/complexity of diagnoses addressed, amount of data reviewed and morbidity associated with further testing or treatment.
5. New codes to capture physician work effort exceeding the maximum visit time expectations (G2212).
6. Add-on code G2211 may be used for primary care and certain specialty providers (including urologists) for added complexity associated with ongoing/chronic care for serious or complex conditions. Although payment for this code is delayed until 2024, it will result in an additional 0.49 total RVUs.

Figure 1. Percent of E/M visits billed by level, stratified by practice type. Level 1 visits represented <1% and actual values are not shown. Level 1: 99201 and 99212; level 2: 99202 and 99212; level 3: 99203 and 99213; level 4: 99204 and 99214; level 5: 99205 and 99215. Data source: Medicare Physician and Other Practitioners–by Provider and Service File.⁴ MSG, multispecialty group. SSG, single specialty urology group.

The changes implemented by CMS may have varying impact on physicians depending on their practice mix (eg mostly office based vs mostly procedural). The largest increase in E/M payments occurs for high-level established visits (table 1), thereby benefiting those who provide this service frequently (eg primary care and medical subspecialties). However, for procedural-oriented specialties, if the decrease in RVU conversion factor is not balanced with a corresponding increase in total RVUs, they may see decreased payments. As surgical specialists who perform office-based care, urologists may not be impacted to the same degree as other procedural-based specialties. From recent prior analyses,³ we see that the new payment reform may differentially impact physicians depending on their practice organization. For example, E/M visits accounted for 37% of Part B payments for physicians in solo practices, compared to 30%–31% for those in larger group practices (calculated using CMS public files from 2019; table 2).⁴ Based on the 2019 number of E/M services and distribution of visit levels (fig. 1), we find that physicians in solo practices will see the largest increase in payments from E/M payment reform (7.1%) compared to larger groups (5.8%; table 2). However, the net change in revenue for physicians may vary given the reduction in the RVU conversion factor and change in RVUs for other services. Importantly, CMS estimates that on average urologists will see an 8% increase in total reimbursements for 2021.⁵

The new E/M payment reform has the potential to alter physician behavior and change practice patterns in at least 2 ways. First, due to increased payment for high-level established visits and the eventual addition of add-on code G2211 for chronic complex care, there will be incentives to maintain longitudinal care for urological patients. Therefore, rather than referral back to primary providers, urologists may opt to maintain routine visits with complex patients, such as those on active surveillance for prostate cancer or those with bladder pain syndrome. These incentives appear to better align with providing patients with quality care. Second, further reduction of the RVU conversion factor by 3.89% in 2022 and proposed reductions to practice expense RVUs will likely result in decreased payments for procedures commonly performed by urologists.⁶ This may influence physicians who primarily obtain revenue from procedures to preferentially pursue office-based care, potentially impacting access to surgery. Overall, urologists may benefit from the proposed changes; however, the impact on patient care remains to be determined.

Figure 2. Payment adjustments stratified by practice type for the 2017 performance year (A) and the 2019 performance year (B). Providers receive either bonus adjustment, positive adjustment, no adjustment or penalties depending on their overall MIPS performance. Data source: CMS Physician Compare Files 2017 and 2019.⁷ MSG, multispecialty group. SSG, single specialty urology group.

Beyond reimbursement for office visits, payment reform is occurring more broadly to transition health care from volume to value, further altering physician incentives. The Merit-based Incentive Payment System (MIPS) in fee-for-service Medicare, introduced as part of the Medicare Access and CHIP Reauthorization Act, is a payment model that aims to improve the value of care. Implemented in 2017, MIPS determines whether a physician’s subsequent Medicare reimbursement (assessed on a per-claim basis 2 years following the performance year) is reduced or enhanced based on performance in 4 categories: quality, practice improvement, promotion of information technology and spending. The overall MIPS score is calculated as a weighted average of the 4 category scores. As Medicare annually escalates the weight of the spending component, spending, which is measured at the beneficiary level, is becoming increasingly important in deciding winners and losers with respect to the policy. CMS is continuing to move forward with MIPS, albeit with the intent of bundling spending with quality through implementation of value pathways. However, of the 7 value pathways CMS has proposed for 2023, none is directly relevant to urologists. Therefore, urologists will continue to be subject to the traditional MIPS program until a specialty specific pathway (or an advanced payment model that would exempt participants from MIPS) is created. Based on our analyses of CMS Quality Payment Program data,⁷ urologists were performing better in MIPS in 2019 compared with 2017, with no physicians receiving penalties in 2019 (fig. 2). However, as incentives to decrease spending become stronger (ie as it is weighted more heavily in the overall score over time) and performance thresholds increase, it will be important to determine how patient care is impacted.

The 2 initiatives described above represent significant changes in how physicians are paid. The impact this will have on patient care, such as access to procedural based care, is yet to be determined. Most importantly, the initiatives represent an attempt to design a system that minimizes the burden of documentation and emphasizes value over volume.