E&M Payment Policy Changes Drive Modest Reduction in Specialist/Primary Physician Pay Gap

Recent  JAMA study reveals that the wide divide in average payment dropped by less than $1,000, remaining close to $40,000.

A key question lingering on the minds of many in the healthcare industry was whether federal payment policy adjustments implemented in 2021 would meaningfully tighten a broad pay gap between specialists and primary care physicians (PCPs).

A recent study by the Journal of the American Medical Association (JAMA) appears to have yielded the answer: yes—but not by nearly enough.

The study, published online on the JAMA Network website, found that the evaluation and management (E&M) changes resulted in a gap decrease of $825 in Medicare payments, from $40,259.80 to $39,434.70—a drop of just 2 percent.

The study population involved more than 180,000 physicians and revealed reimbursement increases for PCPs and many specialties alike—but not all. The median radiologist took an approximately $4,500 pay hit, for example, a decline of 3.3 percent. Dermatologists were likewise negatively impacted, with reimbursement declining 4.4 percent.

But overall, payment bumps were found to have been strong, with PCPs seeing their reimbursement rise by double digits: 11 percent, or around $3,680. Some specialties saw even better outcomes, with psychiatrists’ reimbursement spiking by 17.8 percent.

Calling the 2-percent gap reduction “modest,” JAMA further noted that the findings may have been influenced by the COVID-19 pandemic, and that further research in future years will be needed to gauge the totality of the impacts.

“Medicare payment policies have historically undervalued E&M visits,” Victoria Bailey wrote last month for RevCycleIntelligence. “These visits are common in primary care settings, leading to lower reimbursement for primary care physicians compared to specialists. There have been some concerns that the payment gap is larger than appropriate and may deter physicians from primary care specialties.”

Federal changes to reimbursement occurred in tandem with AMA documentation requirement shifts, Bailey noted. The organization eased such requirements for E&M codes and modified time-based billing guidelines, making it easier to bill higher-intensity, more profitable codes.

Yet more may still need to be done.

“If policymakers want to shrink the primary care/specialist pay gap, they may need to focus on broader changes to Medicare’s physician payment policies,” Bailey quoted the researchers as saying. “(One such idea is) reforming the Relative Value Scale Update Committee, which advises Medicare on valuing the roughly 8,000 payment codes comprising the physician fee schedule and other tools such as primary care payment reform that are explicitly targeted to primary care physicians.”

Click here to review the study abstract.

About the Author

Mark Spivey is a national correspondent for Panacea who has been writing and editing material about the federal oversight of American healthcare for nearly 15 years.