Blog Post

2021 MPFS Market Status Report

2021 Mpfs Market Status Report Web

In the last quarter of 2020, ECG helped nearly four dozen organizations assess the projected impact of the 2021 Medicare Physician Fee Schedule (MPFS) update on WRVU totals and group revenue. Now that we’re past the first quarter of 2021, many groups have begun to assess the real-life impact relative to their expectations.

We checked back with several of those groups to gather their input on the key developments, which are summarized below.

  • ECG’s analysis indicated that the group average impact was a 10% increase in WRVUs, although the projected WRVU impact for a given group was expected to vary significantly based on specialty mix. Reporting groups have thus far indicated that our projections were within 1% of expected values. The accuracy of the projections has allowed groups to be within budget for 2021 physician compensation.
  • The Medicare revenue impact has similarly been accurate, within about 1%. The group average was a positive increase in 2021 Medicare revenue by 7.5%. Groups still expect this increase to be temporary in nature. Because the CARES Act funding will be gone by 2022, these medical groups are not accounting for the higher funding when conducting 2022 compensation planning.
  • Finally, there was some concern among administrators and physicians that the new coding regulations would result in deflating the E&M code mix to a lower average level of acuity. None of the groups responding thus far have experienced a substantive decrease (>-2%) in the average acuity. Further, among the few groups that reported any significant change, we found that average acuity coded by their physicians actually increased (e.g., more 99214 and 99215 CPT codes than before) instead of decreased.

It’s still early, and more data will continue to inform these findings. But thus far, the 2021 MPFS update is having the expected implications when both WRVU and revenue impact are considered. This will make benchmark adjustments and planning for 2022 physician compensation easier and more certain.

What remains unclear is the impact that market demand will have on physician compensation, particularly for primary care and selected cognitive specialties. These specialties are likely to experience additional inflation of compensation beyond typical year-over-year trends.

Five Strategic Implications of the 2021 MPFS Final Rule

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