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Implications of Changes in Medicare Payment and Documentation for Primary Care Spending and Time Use

INTRODUCTION

Primary care is—ideally—accessible, timely, first-contact care that is comprehensive, coordinated, and longitudinal. To support primary care practices, several states have passed regulations or legislation to raise primary care spending to 7–12% of total healthcare spending.1, 2 The Centers for Medicare and Medicaid Services (CMS) has finalized the first major change to primary care payment in the Physician Fee Schedule in decades—raising fees for evaluation and management visits, and lowering documentation requirements (obviating rule-based review of systems and exam elements in favor of time-based or decision-complexity-based coding), beginning 2021.3

We sought to estimate the extent to which the new CMS rule may reach target primary care spending levels pursued in several states,1, 2 and the degree to which reduced documentation requirements may affect time use in primary care practices.

METHODS

We used a previously-validated model,4 which simulates the national population of primary care providers and their patients, reflecting current patterns of utilization, spending, and practice-level revenues and costs from all payers. Primary care spending was defined as the sum of all payments to practitioners in general practice, general internal medicine, or family practice, and included geography-specific Medicare payments by visit code (data from N = 181,664 primary care providers, Table 1).5 Reduced documentation time was estimated based on a prior practice time use study,6 and disaggregated into time spent during visits, outside of visits during practice hours, and after practice hours (Table 1). To estimate potential all-payer effects, we re-calculated the outcomes if commercial insurers and Medicaid adopted the same proportionate rate increase and documentation rules as Medicare. We also identified the implications of potential up-coding of visits to higher levels of complexity given the reduced documentation requirements.

Table 1 Model Input Data and Sources

RESULTS

Medicare Only

Based solely on the fee increases as applied to Medicare patients, we anticipate the CMS policy to increase gross revenues to primary care practices by $20,176/full-time physician/year (95% CI $1766 to $90,261)—equivalent to an increase of 0.3 percentage points nationwide from the current average of 2.1% of total Medicare spending devoted to primary care. The increase would not be expected to achieve state targets for primary care spending (Table 2).

Table 2 Results from Simulation of Medicare Payment Increase

One-third of the usual time per practitioner note (~ 1.2 min/visit note) was estimated to be eliminated by the change in documentation requirements. Time saved from documentation would be expected to be 14.9 min/practitioner/day (95% CI 2.7 to 27.4), with 9.5 min/day saved from documentation during visits, 3.7 min outside of visits during practice hours, and 1.7 min outside of practice hours.

Additional Payers

If commercial insurers and Medicaid were to adopt the Medicare policy, the overall composite fee increases would be anticipated to increase gross revenues by $156,071/full-time physician/year (95% CI $62,028 to $239,738)—an increase of 1.2 percentage points in the share of total national health care spending allocated to primary care, from the current share of 5.6% across all payers (including Medicare). This spending would approach state targets (Table 2). Time saved from documentation (including Medicare, Medicaid, and commercially insured patients) would be expected to be 41.8 min/practitioner/day (95% CI 39.4 to 44.2), with 26.6 min/day saved from documentation during visits, 10.4 min outside of visits during practice hours, and 4.8 min outside of practice hours.

Incorporating Potential Up-Coding Effects

If 5% of visits previously coded as level 3 or level 4 were up-coded by one level (to levels 4 and 5, respectively), we would expect the Medicare proportion of spending on primary care to increase by 0.4 percentage points, and—if other payers followed Medicare—total spending on primary care to increase by 1.5 percentage points.

DISCUSSION

Medicare payment changes that will take effect in 2021 will likely be insufficient to reach state target levels of primary care spending alone, but if all other payers follow Medicare, primary care spending levels may approach target levels.

References

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Funding

Modeling was performed in R with data and code for replication posted at: https://github.com/sanjaybasu/medicarerateincrease

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Correspondence to Sanjay Basu MD, PhD.

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Conflict of Interest

Dr. Basu reports grants from the US National Institutes of Health; grants from the US Centers for Disease Control and Prevention; grants from the US Department of Agriculture; grants from the Robert Wood Johnson Foundation; personal fees from the Research Triangle Institute; personal fees from Collective Health, from HealthRight360, from KPMG; personal fees from PLOS Medicine; personal fees from The New England Journal of Medicine, outside the submitted work.

Dr. Bitton reports personal fees from the Centers for Medicare and Medicaid Innovation, outside the submitted work.

Dr. Phillips has nothing to disclose.

Dr. Song reports grants from the National Institutes of Health, Office of the Director, during the conduct of the study; personal fees from International Foundation of Employee Benefit Plans, outside the submitted work.

Dr. Landon reports non-financial support and other from Myers-JDC Brookdale Institute, other from City of Newton, MA, other from Health Resources in Action Board, personal fees from Research Triangle Institute International, personal fees from American Board of Internal Medicine (ABIM), personal fees from UpToDate, Inc., personal fees from Freedman Healthcare Consulting, grants from NIH, outside the submitted work.

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Basu, S., Song, Z., Phillips, R.S. et al. Implications of Changes in Medicare Payment and Documentation for Primary Care Spending and Time Use. J GEN INTERN MED 36, 836–839 (2021). https://doi.org/10.1007/s11606-020-05857-4

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