Swati Mehrotra, M.D. and Carol Filomena, M.D.

The Centers for Medicare and Medicaid Services (CMS) released the Final Rule on 12/01/2020 and the changes became effective 01/01/2021. The implications for pathologists are summarized as follows:

  • Overall, pathologists had expected to see a 9% Medicare pay cut. The final 2021 Medicare Physician Fee Schedule (PFS) conversion factor was decreased to $32.41 from the 2020 PFS conversion factor of $36.09, a decrease of $3.68 (-10.2%) for all physician services. The decrease was necessary to accommodate the CMS budget neutrality requirement because increased relative values and expenditures were assigned to the Evaluation and Management (E/M) services codes. Although the new E/M coding structure approved by Current Procedural Terminology (CPT) Editorial Panel and valued by the Relative Value Update Committee (RUC) is expected to reduce the administrative burden for specialties that bill E/M codes, the E/M payment increases had to be offset by payment reductions in other specialties in order to maintain budget neutrality. The Congress passed the year-end omnibus legislative package on December 21, 2020, which was signed, into law by President Trump on December 27, 2020. This omnibus spending package mitigates the sharp cuts to physician medicare payments. Pathologists can now expect to see a -2.25% decrease in Medicare reimbursement as opposed to -9% Medicare pay cut based on the final 2021 Medicare Physician Fee Schedule (PFS).
  • The $1.4 trillion omnibus legislative package mitigates budget neutrality cuts, provides for a 3.75% pay raise across all specialities and extends the moratorium on budget sequestration. In addition, it suspends payments for code G2211 (a CMS add on code for E/M services) for 3 years.
  • Most specialities can now expect to see a neutral change or an increase in their payments for 2021. This is in sharp contrast to what was predicted based of the final rule wherein the CMS estimated the 2021 Medicare payment changes to range from pay cuts of 10% to payment increases of 16%, depending upon the mix of services provided.
  • The bill also made improvements to Surprise Billing Legislation.
  • Medical organizations including the College of American Pathologists and American Medical Association continue to advocate for physicians.


Please refer to info@e.ama-assn.org and cap.org for a more comprehensive analysis of the CMS Final Rule and advocacy update.