Medicare Physician Fee Schedule

2021 Proposed Rule

On August 4, 2020, the Centers for Medicare & Medicaid Services (CMS) published the annual Medicare Physician Fee Schedule proposed rule. The rule describes proposed payment and policy changes for 2021. This year, the rule included several proposals which could significantly impact physiatry. CMS estimates that the proposals in this rule, if implemented, would result in a three percent cut to payment for physical medicine and rehabilitation. Because of the variability across our membership, we expect the exact impact on individual practices may vary substantially. 

2021 Conversion Factor

The conversion factor is used, in conjunction with relative value units (RVUs) and geographic practice cost indices (GPCIs) to calculate payment for Medicare services. The proposed conversion factor for calendar year 2021 is $32.26. This reflects a decrease of $3.83 or 10.6 percent from the 2020 conversion factor, which is $36.09. The conversion factor is calculated annually according to a formula which CMS is required to use under statute. The formula accounts for fluctuations in RVUs across the fee schedule.  

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