Payments by all parties

Am I thinking incorrectly or what?
CMS changed the values of E/M RVUs effective 1/1/21, I haven’t seen any changes in payments for these submitted codes so far this year. So am I to assume that the INSCOs (insurance companies) have a set fee that they pay for each E/M code regardless of changes that the “governing” body hath decreed?
Was I dreaming that the INSCOs would increase their meager remittances to match the changes in the CPT RVUs ??

The RVUs for those codes increased. Insco’s are supposed to pay per RVU, but in reality they can do whatever they want because they essentially have a monopoly. So we now have levels that are harder to reach, for the same payment. So much for rewarding intellectual work, and the non-proceduralists get screwed again…

Payments for services are dependent upon the structure of contracts. Insurance companies have standard templates for contracts which entities under a tax ID attempt to negotiate. Since most negotiated contracts do not have payments for RVUs–they are negotiated based upon E/M and CPT codes, there is no change in payments from the insurance companies. Your RVUs went up with the change while your payments stayed the same. For those employed in systems that use the RVU measure of work and have their employment contracts negotiated with RVU payments, the change will benefit them temporarily. Since the employer is not getting paid any additional money for the additional RVUs, the employer will change the agreement.

First, I believe most negotiated contracts ARE RVU-based, even if they don’t
explicitly say so. You can easily analyze your payments to see the RVU
patterns that exist.

Those contracts don’t often tie themselves to the latest RVU values, however.
It’s typical for the contracts to lag. No surprise there. However, SOME
private payors are, indeed, already paying the new rates. Some Medicaid
providers are. And Tricare is.

Second, although it’s not important to pediatricians, MEDICARE is paying those
rates and you can be sure that there is a monumental shift of revenue to
primary care with this change. Yes, pediatricians will be the last to feel it
because you don’t take Medicare, but the change is coming.

The RVU change is a good impetus to dig into your pricing and make sure
everything is priced appropriately. And grab your insurance contracts - you
know where those are, right? - and do some fee schedule comparisons.

Chip,

You see this from a wide perspective–much bigger than mine. Help me understand “RVU-based, even if they don’t explicitly say so”. If negotiated fees are based off a percent of Medicare, how do the private inscos pay that has non-explicit RVU payment?

Additionally, please elucidate–“The RVU change is a good impetus to dig into your pricing and make sure everything is priced appropriately.” How is it different with the RVU change versus any other year?
I 100% trust your expertise on this so I am happy to learn there is more hope than what I expressed. Please shine some more light on how the increased RVUs are going to have increased payment for the same services in the private sector going forward.

Thank you!!!

Help me understand
“RVU-based, even if they don’t explicitly say so”. If negotiated fees are
based off a percent of Medicare, how do the private inscos pay that has
non-explicit RVU payment?

Often (though far from always), negotiation rotates around an offered
fee schedule, which takes the form of an (incomplete) list of CPT
codes and some $$ figures. Most of the time, you can take that fee
schedule and feed it back into an RVU calculator to quickly see, “Oh,
they are using 110% of 2016 Medicare for E&Ms and 90% for screening
codes, etc.” Of course, this is only necessary if they won’t straight
out tell you.

This sounds ridiculous, but a quick way to check is to look at your
well visit codes…if I see that the 99392 and 99393 are paid
identically, or nearly so, I know it’s probably RVU-based. SURE,
those two codes should be close to each other, but they usually only
differ by 1/100th of an RVU or so.

Here’s the thing: the payors are ACUTELY aware of the RVU values
(even if your rep is useless). Remember, they need to coordinate
benefits with Medicare all the time. So when they play dumb, they are
just playing.

Additionally, please elucidate–“The RVU change is a good impetus to dig into
your pricing and make sure everything is priced appropriately.” How is it
different with the RVU change versus any other year?

First, the annual change isn’t enough of an impetus for too many
people. I’m going to remind people every time.

Second, this year is special because the difference is SO PROFOUND.
The swing of $$ (well, RVUs) into the E&Ms is…huge. It’s too soon
for me to show data, but I guarantee that someone reading this is
losing money right now because they didn’t update their pricing.
That absolutely happened with the imms admins codes way-back-when.

Of course, none of us really knows how this will all shake out, but
I’ve been sharing data on this topic for >10y. As the RVUs rise, so
do pediatric fee schedules. There’s a lag, but one thing you can do
to hasten it is update your prices and demand your payors move to 2021
pricing.

For more details, read this too:

I just shared this data today on my blog, it might be of interest to this thread.

Thanks Chip…

Thanks Chip. Have you seen anything yet from the commerical insurance companies on this?

Yes - we know a couple private payors are using 2021. Tricare and some Medicaid programs, too! Not a lot, of course, but still…

Thanks! Do you know which private payors specifically? We have not seen any changes yet with our payors.

Oh, geeze, it was one of the Blues, believe it or not - I just can’t remember where.

The bottom line is that you should consult your agreements and your reps to find out when they plan to transition to the 2021 fee schedule.

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Thanks Chip for the latest on my posed question on PMI March 6th… Many are interested…

We’ll try to get in touch w/ our reps after " if you have a billing question press 1 … etc. etc. etc". Then at the end “no rep can be found for your location…”
But we’ll keep trying…