CMS Releases 2021 Final Physician Fee Schedule Rule

On December 1, 2020, CMS finalized its Medicare Physician Fee Schedule Rule for the calendar year (CY) 2021.

Office and Outpatient Evaluation and Management (E/M) Visits

Last year, CMS finalized an important policy change in the 2020 Medicare Physician Fee Schedule Final Rule when it adopted CPT guidelines to report office and outpatient E/M visits based on either medical decision making or physician time and reduce unnecessary documentation. These changes were made effective January 1, 2021, to allow for extensive education on use of the new guidelines and revised codes.

CMS also adopted the relative value recommendations made by the American Medical Association (AMA)/Specialty Society Relative Value Scale (RVS) Update Committee (RUC) for the office and outpatient E/M visits, which will lead to significant payment increases for these services in 2021.

The final 2021 E/M policies differ from the RUC recommendations in one important respect: although the surgical specialties participated in the RUC survey and their data and vignettes were incorporated into the RUC recommendations, CMS did not apply the RUC recommended values to the visits bundled into global surgical payments.

Budget Neutrality Adjustments

By law, significant increases in Medicare physician payment rates must be offset by across-the-board decreases. This budget neutrality requirement means that the RUC recommendations for the office and outpatient E/M visits would lead to an approximate 5% payment reduction affecting physicians and other health professionals who do not report office visits. This reduction was doubled to more than 10% as a result of other policy changes made by CMS. In particular, despite concerns about a lack of clarity in its definition and estimated utilization, CMS finalized a new code, G2211, to be reported in addition to the CPT codes for office visits, which requires an additional budget neutrality offset of about $3 billion.

Despite the consensus that CMS should waive the budget neutrality impacts of the Medicare E/M policies in light of the COVID-19 public health emergency (PHE), CMS has finalized a significant budget neutrality adjustment. The CY 2021 physician payment conversion factor is $32.41, a decrease of $3.68 (10.2%) from the CY 2020 conversion factor of $36.09. The CY 2021 anesthesia conversion factor is $20.04, a decrease of $2.15 from the CY 2020 conversion factor of $22.20.

The Table belowillustrates the specialty payment impacts. Redistributions will be significant, with family medicine increasing by 13% and many specialties that do not perform office visits decreasing by 8% or more.

Because the Administration does not offer any relief from the budget neutrality cuts in the final rule, ISASS has been working with other stakeholders to strongly urge Congress to avert the more than 10% cut as physicians experience substantial economic hardships due to the COVID-19 PHE. Cuts of this magnitude are problematic for all services, but we are extremely concerned that these cuts will directly impact care provided to COVID-19 patients because payments for hospital visits, critical care visits, nursing home visits, and home visits are among those being slashed.

* Column F may not equal the sum of columns C, D, and E due to rounding. PE = practice expense; MP = malpractice.

Other important policy updates include:

TELEHEALTH

• CMS did not permanently extend the Medicare telehealth geographic and site of service originating site restrictions (section 1834(m)), which temporarily allow Medicare beneficiaries across the country to receive care from their homes, citing a lack of statutory authority to do so. Therefore, the waivers in place will last only during the COVID-19 PHE.
• CMS finalized its proposals to permanently add several codes to the Medicare telehealth list and certain home visit services. CMS also kept more than 150 additional services on the Medicare telehealth list until the end of the calendar year in which the PHE ends to allow more time to study the benefit of providing these services via telehealth.
• Medicare telehealth visits to nursing facility settings are expanded from once every 30 days to once every 14 days.
• Telehealth rules do not apply when the beneficiary and the practitioner are in the same location, even if audio/visual technology assists in furnishing a service.
• CMS finalized its proposal to allow direct supervision to be provided using real-time, interactive audio and video technology through the later of the end of the calendar year in which the PHE for COVID-19 ends or December 31, 2021.
• CMS finalized a number of care management services and remote physiologic monitoring (RPM) proposals, including allowing RPM services for both new and established patients during the COVID-19 PHE, and only for an established patient after the PHE ends. CMS will allow the medically necessary services associated with all the medical devices for a single patient to be billed by only one practitioner and only once per patient per 30-day period, and only when at least 16 days of data have been collected.

SCOPE OF PRACTICE

o CMS finalized that a teaching physician can use two-way audio/video communications technology to provide direct supervision to a resident through the later of the end of the COVID-19 PHE or December 31, 2021. This excludes audio-only technology.

To read the final rule, see here: Final Rule

To read the CMS Medicare Learning Network Update on changes, see here: https://www.cms.gov/files/document/mm12071.pdf