On the evening of December 1, 2020, the Centers for Medicare and Medicaid Services (CMS) released the final Physician Fee Schedule (PFS) for calendar year (CY) 2021. The rule includes finalized policies related to telehealth, the Quality Payment Program (QPP), care management and others. The rule has not yet been published in the Federal Register but will become effective on January 1, 2021.

Impact of E/M Changes Felt Across Physician Fee Schedule

Physicians and other health professionals are paid under Medicare Part B for services that include office visits, surgical procedures, and other diagnostic and therapeutic services. For payment, Medicare uses a physician fee schedule based on the relative resources typically used to furnish the service. These relative value units (RVUs) are determined for each service in the areas of physician work, practice expense, and malpractice.

Ten Percent Decrease in Conversion Factor Finalized for CY 2021

For CY 2021, CMS finalizes a conversion factor of $32.41 ($32.26 in proposed rue), which is a 10.2% decrease from the CY 2020 PFS conversion factor of $36.09. This decrease is due to a budget neutrality adjustment that accounts for increases finalized in the CY 2020 PFS rule for Evaluation and Management (E/M) services and expected utilization.

CMS Continues Phase-In of Changes to PE Calculation

Practice expense (PE) reflects to costs of furnishing a service that reflects general and administrative items such as equipment, office rent and personnel wages. In the final rule, CMS finalizes technical changes to the calculation of PE, including:

• Implementation of the third year of the market-based supply and equipment pricing update
• Standard rate-setting refinements to update premium data involving malpractice expense and geographic practice cost indices (GPCIs)

Services Similar to E/M are Revalued

CMS finalizes the revaluation of codes that include, rely upon, or are analogous to office/outpatient E/M visits consistent with the increases in values we finalized for office/outpatient E/M visits for CY 2021:

• End-Stage Renal Disease (ESRD) Monthly Capitation Payment (MCP) Services
• Transitional Care Management (TCM) Services
• Maternity Services
• Cognitive Impairment Assessment and Care Planning
• Initial Preventive Physical Examination (IPPE) and Initial & Subsequent Annual Wellness Visits (AWV)
• Emergency Department Visits
• Therapy Evaluations
• Psychiatric Diagnostic Evaluations and Psychotherapy Services

Medicare Will Cover Additional Telehealth Services in 2021

In the April 2020 COVID-19 interim final rule (IFC), CMS added services to the Medicare telehealth list for the duration of the COVID-19 public health emergency (PHE). CMS will make the following telehealth services permanent under Category 1:

• Group Psychotherapy (CPT code 90853)
• Domiciliary, Rest Home, or Custodial Care services, Established patients (CPT codes 99334-99335)
• Home Visits, Established Patient (CPT codes 99347- 99348)
• Cognitive Assessment and Care Planning Services (CPT code 99483)
• Visit Complexity Inherent to Certain Office/Outpatient E/Ms (HCPCS code G2211)
• Prolonged Services (HCPCS code G2212)
• Psychological and Neuropsychological Testing (CPT code 96121)

Category 1, under the Medicare telehealth list, is for services such as consultations and office visits similar to those already on the telehealth list. Category 2 is for services that are not similar to those on currently on the telehealth list. With this final rule, CMS will create a new temporary Category 3, for services added to the Medicare telehealth list during the COVID-19 PHE. The following services will be added to the Medicare telehealth list under Category 3:

• Domiciliary, Rest Home, or Custodial Care services, Established patients (CPT codes 99336-99337)
• Home Visits, Established Patient (CPT codes 99349-99350)
• Emergency Department Visits, Levels 1-5 (CPT codes 99281-99285)
• Nursing facilities discharge day management (CPT codes 99315-99316)
• Psychological and Neuropsychological Testing (CPT codes 96130-96133; CPT codes 96136-96139)
• Therapy Services, Physical and Occupational Therapy, All levels (CPT codes 97161-97168; CPT codes 97110, 97112, 97116, 97535, 97750, 97755, 97760, 97761, 92521-92524, 92507)
• Hospital discharge day management (CPT codes 99238-99239)
• Inpatient Neonatal and Pediatric Critical Care, Subsequent (CPT codes 99469, 99472, 99476)
• Continuing Neonatal Intensive Care Services (CPT codes 99478-99480)
• Critical Care Services (CPT codes 99291-99292)
• End-Stage Renal Disease Monthly Capitation Payment codes (CPT codes 90952, 90953, 90956, 90959, 90962)
• Subsequent Observation and Observation Discharge Day Management (CPT codes 99217; CPT codes 99224-99226)

CMS previously proposed that it would not include some of these services temporarily included on the Medicare telehealth list due to the COVID-19 PHE as either Category 1 or Category 3 (e.g., ESRD monthly capitation payment codes, therapy services, etc.). However, in its final rule CMS includes larger list of services under the new Category 3.

Furthermore, audio-only telehealth services will continue to be covered by Medicare on an interim basis. In this final rule, CMS establishes an interim final policy for additional coding and payment for extended audio-only assessment services. Accordingly, CMS establishes the following HCPCS code:

• G2252: Brief communication technology-based service, e.g. virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services; established patients only; 11-20 minutes of medical discussion

G2252 will be directly cross-walked to CPT code 99442. After the end of the PHE, there will be no additional payment for audio-only E/M visit codes.

Through the waiver authority of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), CMS removed the geographic and site of service originating site restrictions for Medicare telehealth services. The final rule does not include any provisions to make these flexibilities permanent outside of rural areas because CMS is limited by statute and cannot permanently expand the list of telehealth providers. CMS believes that making these flexibilities permanent requires an act of Congress.

Direct Supervision Using Audio and Video Technology to be Allowed

CMS finalizes its proposal to allow direct supervision using real-time, interactive audio and video technology through the end of the calendar year in which the COVID-19 PHE ends. This policy is consistent with that adopted in the COVID-19 interim final rule with comment (85 FR 19245).

CMS Expands Access to Care Coordination Management Services and Remote Physiologic Monitoring

CMS aims to improve payment for care management services through payment changes to the following services:

• Remote physiologic monitoring (RPM),
• Transitional care management (TCM), and
• Psychiatric collaborative care model (CoCM)

CMS Expands Access to Remote Physiologic Monitoring Services

In prior rulemakings, CMS added reimbursement for development and management of a plan of treatment based upon patient physiologic data in 2020, and for 2021 is adding payment for prolonged face-to-face and/or non-face to face E/M work related to an office/outpatient E/M  visit in addition to their other care management codes.

In this rule, CMS finalized its proposals to expand access to remote physiologic monitoring (RPM) services:

• After the COVID-19 PHE ends:
  • There must be an established patient-physician relationship for RPM services to be furnished; and
  • 16 days of data each 30 days must be collected and transmitted to meet the requirements to bill CPT codes 99453 and 99454.
• Consent to receive RPM services may be obtained at the time that RPM services are furnished.
• Auxiliary personnel may provide services described by CPT codes 99453 and 99454 incident to the billing practitioner’s services and under their supervision. Auxiliary personnel may include contracted employees.
• The medical device supplied to a patient as part of RPM services must be a medical device as defined by Section 201(h) of the Federal Food, Drug, and Cosmetic Act, that the device must be reliable and valid, and that the data must be electronically (i.e., automatically) collected and transmitted rather than self-reported.
• Only physicians and non-physician practitioners who are eligible to furnish E/M services may bill RPM services.
• RPM services may be medically necessary for patients with acute conditions as well as patients with chronic conditions.
• For CPT codes 99457 and 99458, an “interactive communication” is a conversation that occurs in real-time and includes synchronous, two-way interactions that can be enhanced with video or other kinds of data as described by HCPCS code G2012.  We further clarified that the 20-minutes of time required to bill for the services of CPT codes 99457 and 99458 can include time for furnishing care management services as well as for the required interactive communication.

CMS Expands Transitional Care Management Billing

CPT Codes 99495 and 99496 describe management of a patient’s transition from acute care or certain outpatient stays to a community setting, with a face-to-face visit, once per patient within 30 days post-discharge. CMS finalized its proposal to remove 14 codes from its list of codes that cannot be billed concurrently with the transitional care management codes because of potential duplication of those services. CMS is also permitting the code for complex chronic care management services to be billed concurrently with the TCM codes when appropriate.

CMS Creates New Code for Behavioral Health Management Under its Psychiatric Collaborative Care Model (CoCM)

Under its Psychiatric Collaborative Care Model, CMS finalized its proposal to add a new code to permit billing for shorter increments of behavioral health care manager time than under the codes currently used to bill for these services. The new code would describe initial or subsequent psychiatric collaborative care management, first 30 minutes in a month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional.  The new code is HCPCS code G2214 (Initial or subsequent psychiatric collaborative care management, first 30 minutes in a month of behavioral health care manager activities, in consultation with a psychiatric consultant, and directed by the treating physician or other qualified health care professional).

CMS Will Allow Physicians at Teaching Hospitals to use Telehealth with Residents in Rural Areas

CMS is finalizing its proposal to allow physicians teaching residents in a teaching hospital to use telehealth technology to provide the necessary direction, management and review in rural areas. Teaching physicians will be able to bill for their services provided virtually involving residents only when the services are furnished in residency training sites that are located outside of an OMB-defined metropolitan statistical area (MSA).  For all other settings, CMS is not permanently finalizing their teaching physician virtual presence policies.

CMS is also making permanent its interim policy allowing the services that residents provide which are not related to their GME program in the hospital where their residency program is to be separately billable physicians’ services. This includes services performed in the outpatient department, emergency department, or inpatient setting. These include higher level E/M visits and services to Medicare beneficiaries that are otherwise outside the scope of the GME program.

CMS Does Not Finalize Coding for 505(b)(2) Products but Indicates Agency will Further Consider the Issue

CMS had proposing to codify its existing policy to continue assigning certain section 505(b)(2) drug products to existing multiple source drug HCPCS codes if the product is described by such a code, based on the products description, including labeling and uses. However, due to feedback from public comments, CMS is not finalizing the proposal. Many commenters were not supportive of the policy and some requested more details about CMS’ proposed approach. CMS says that they are delaying a decision and will further consider the issue, meaning it could arise in future rulemaking.

Scope of Practice Changes Finalized for Multiple Provider Types

The CY 2021 PFS final rule finalizes adjustments to the scope of practice rules for various providers, including nurse practitioners, pharmacists, and therapy assistants.

CMS makes permanent the May 1st COVID-19 IFC which authorizes nurse practitioners (NPs), clinical nurse specialists (CNSs), physician assistants (PAs), and certified nurse-midwives (CNMs) to supervise the performance of diagnostic tests within their scope of practice and state law. In this final rule, CMS adds certified registered nurse anesthetists (CRNAs) to this list of nonphysician practitioners.

The maintenance therapy policy in the May 1st COVID-19 IFC authorizing physical therapists (PTs) and occupational therapists (OTs) to delegate performance of clinically appropriate maintenance therapy services to a therapy assistant, will also become permanent, aligning the policy with other rehabilitative services.

CMS reiterates the clarification initially made in the May 8th, 2020 COVID-19 IFC that pharmacists fall within the regulatory definition of auxiliary personnel under the “incident to” regulations. As such, pharmacists may provide services in connection to the overall physician’s treatment plan under the appropriate level of supervision for services, not under the Medicare Part D benefit.

CMS also finalizes broad modifications to the medical record documentation requirements for physicians and certain nonphysician practitioners (NPPs), allowing physicians and NPPs to review and verify documentation entered into the medical record by a member of the medical team for their services with the stipulation that they are paid under the PFS. This final rule further clarifies that students working under these practitioners, who furnish and bill Medicare for their services, can also document medical records as long as the billing practitioner reviews, signs, and dates it.

CMS Finalizes Updates for Quality Payment Program, Including New Reporting Pathway for APM Participants

In the annual PFS rulemaking, CMS includes its proposals for the Quality Payment Program (QPP), which includes two tracks: Merit-based Incentive Payment System (MIPS) and Alternative Payment Models (APMs). MIPS includes four performance categories: quality, cost, improvement activities, and promoting interoperability. CMS originally intended to begin the transition to the MIPS Value Pathways (MVPs) in 2021, but due to the COVID-19 pandemic, this transition has been delayed until at least 2022. MVPs would be designed to align activities from the four MIPS performance categories around specialty, medical condition, or patient population

CMS is moving forward with creation of the APM Performance Pathway (APP), a voluntary pathway  designed to complement MVPs. The APP will have a fixed set of measures for each performance category and all APM participants reporting through the APP will earn a score of 100% in 2021.

For performance year 2021, CMS is finalizing the proposal to eliminate the APM scoring standard to provide APM participants with additional flexibility in how they participate in MIPS. However, CMS declined to finalize the proposal to lower the 2021 performance year/2023 payment year performance threshold to 50 points, instead leaving it at the previously finalized 60 points. For MIP eligible clinicians in the 2021 performance year/2023 payment year, CMS is finalizing the following weights for the four MIPS categories: 20 percent for Cost, 40 percent for Quality, 25 percent for Promoting Interoperability and 15 percent for Improvement Activities.

CMS Improves Alignment Between Promoting Interoperability and MIPS

In the CY 2020 PFS final rule, CMS established that Medicaid Eligible Professionals (EPs) are required to report on any six eCQMs that are relevant to the EP’s scope of practice. They also adopted the Merit-based Incentive Payment System (MIPS) requirement that EPs report on at least one outcome measure. If no outcome or high priority measure is relevant to a Medicaid EP’s scope of practice, then an EP may report on any six eCQMs that are relevant. In the CY 2021 PFS final rule, CMS amends the list of available eCQMs for the CY 2021 performance period (2023 payment period). Though some commenters asked if CMS would allow the option to report using 2020 specifications or to extend deadlines, the Agency noted the flexibility in reporting and that the updated measures use the best available evidence. Additionally, CMS establishes that the eCQM reporting period in 2021 for EPs in the Medicaid Promoting Interoperability Program will be a minimum of any continuous 90-day period within CY 2021

CMS Finalizes Proposal to Reduce Reporting Burden in Medicare Shared Savings Program

CMS is finalizing that Accountable Care Organizations (ACOs) participating in the Shared Savings Program report quality measure data via the new Alternative Payment Model (APM) Performance Pathway (APP) under the Quality Payment Program (QPP). For performance year 2021, ACOs can choose to report either the ten measures under the CMS Web Interface or the three eCQM/MIPS CQM measures. For performance year 2022 and all subsequent performance years, ACOs will be required to report quality data on the three eCQM/MIPS CQM measures through the APP.

CMS is also finalizing its revisions to the Shared Savings Program Quality Performance Standard, allowing ACOs to meet the standard if they achieve a quality performance score that is equal to the 30th percentile or higher across all MIPS quality performance categories for performance years 2021 and 2022. For performance years 2023 and all subsequent performance years, ACOs must achieve a quality performance score at the 40th percentile mark or higher. CMS is also finalizing changes to the methodology for determining shared savings and losses based on ACO quality performance, revising how it will monitor ACO quality performance, updating the process to validate ACO quality reporting data, and updating the extreme and uncontrollable circumstance policy as it relates to quality performance.

No Data Reporting or Payment Reductions for CDLTs in CY 2021

Based on the CARES Act, CMS is finalizing changes to data reporting and payment requirements for the Medicare Clinical Laboratory Fee Schedule (CLFS). The next data reporting period is January 1, 2022 through March 21, 2022 for clinical diagnostic laboratory tests (CDLTs). The data reported in this period will be based on data collected from 2019. Additionally, there will a zero percent payment reduction for CDLTs in CY 2021. For CY 2022 through 2024, payment for CDLTs may not be reduced by more than 15 percent in comparison to the amount established for the year prior.