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Medicare payment cuts stopped; new fee schedule to be published soon

January 06, 2021


On December 21, 2020, the 116th Congress adopted a massive $1.4 trillion omnibus spending package and a $900 billion COVID-19 relief package. In a significant win for physicians, the legislation included changes to the Medicare physician fee schedule that mitigated the budget neutrality cuts to physician payment and  extends the moratorium on the budget sequestration that would have resulted in an additional 2% cut to physician Medicare payments.

Had Congress not taken action, the Medicare physician payment final rule indicated that there would be a 10.2% across-the-board reduction due to budget neutrality requirements.

There will also be a 3.75% pay raise across all specialties and payments listed in the final 2021 Medicare schedule covered by funds drawn from the U.S. Treasury general fund to the Federal Supplementary Medical Insurance Trust.

The American Medical Association (AMA) estimates that most specialties will now see either a neutral or positive change in total Medicare payments for 2021. The impact for individual practices will depend on physician specialty and mix of services.

CMS has recalculated the payment rates and conversion factor to reflect these changes. The revised payment rates are available in the downloads section of the 2021 Physician Fee Schedule final rule (CMS-1734-F) webpage. Noridian has posted updated fee schedule for 2021

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