Proposed 2021 Medicare Physician Fee Schedule: What You Need to Know

The Centers for Medicare and Medicaid Services (CMS) recently published the proposed draft of the Medicare Physician Fee Schedule (PFS) for 2021. At the heart of the MPFS is the annual conversion factor update. After legislatively mandated adjustments, the 2021 conversion factor will be $32.26, a $3.83 (or 11 percent) decrease from the 2020 PFS conversion factor of $36.09.

In addition to changing the payment rates for 2021, the Proposed Rule also recommends changes to several payment policies. We’ve highlighted a few of the biggest changes.

E/M Changes

In the 2020 Medicare Physician Fee Schedule, CMS finalized simplified coding and billing requirements for office/outpatient E/M visit codes that will go into effect January 1, 2021. Along with those changes, RVUs for the three highest E/M levels for both new and established patients will be increased to reflect “the changes in the practice of medicine, recognizing that additional resources are required of clinicians to take care of their Medicare patients, of which two-thirds have multiple chronic conditions,” according to CMS.

In the proposed 2021 rule, CMS also recommended similar increases to the value of many other services that are comparable to or include office/outpatient E/M visits, including emergency department visits, end-stage renal disease capitated payment bundles, physical and occupational therapy evaluation services, and others. The agency says these changes will “help to ensure that CMS is appropriately recognizing the kind of care where clinicians need to spend more face-to-face time with patients, like primary care and complex or chronic disease management.”

For many office-based specialties, the changes are expected to result in a positive net increase in Medicare allowable charges, including the following:

Allergy/Immunology: +9%
Endocrinology: +17%
Family Practice: +14%
Hematology/Oncology: +14%
Interventional Pain Management: +7%
Rheumatology: +16%

For other specialities, especially hospital-based and non-patient facing specialties, the policy changes are expected to result in significant decreases in Medicare allowable charges, including the following:

Anesthesiology: -8%
Cardiac Surgery: -9%
Chiropractic: -10%
Emergency Medicine: -6%
Interventional Radiology: -9%
Nurse Anesthetists/Anesthesiologist Assistants: -11%
Pathology: -9%
Physical Therapists/Occupational Therapists: -9%
Radiology: -11%

Telehealth

During the COVID-19 public health emergency (PHE), CMS temporarily added numerous codes to the list of approved telehealth services. These temporary codes are known as Category 2 telehealth codes. In the proposed rule, CMS is recommending that some of these services be permanently added to the approved telehealth services list (Category 1 codes), some be extended through the calendar year in which the PHE ends (what are now being called Category 3 codes), and some be removed from the list at the end of the PHE (or remain Category 2 codes).

Some services added as Category 2 codes during the PHE are so similar to other Category 1 codes that CMS is recommended they be added to the permanent list. Those services include the following:

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 GPC1X)
Prolonged Services (CPT code 99XXX)
Psychological and Neuropsychological Testing (CPT code 96121)

According to CMS, services which do not present “significant concerns” with regards to “patient safety, quality of care, or the ability of clinicians to provide all elements of the service remotely” are being proposed for continuation on the temporary list of telehealth services (Category 3) through the calendar year in which the PHE ends. Those services include the following:

Emergency Department Visits (99281-99283)
Domiciliary, Rest Home, or Custodial Care services, Established patients (99336, 99337)
Home Visits, Established Patient (99349, 99350)
Nursing facilities management (99315, 99316)
Psychological and Neuropsychological Testing (96130-96133)

While all the services CMS has added to the temporary list during the COVID-19 public health emergency will continue for the duration of the emergency period as Category 2 codes, some have been identified as not appropriate for Category 3 status (continuing through the end of the year in which the PHE ends) because of “increased concerns for patient safety or jeopardizing quality of care; and furnished fully and effectively, including all elements of the service, by a remotely located clinician via two-way, audio/video telecommunications technology.”

The extensive list includes the following:

Initial and final/discharge interactions (CPT codes 99234-99236 and 99238-99239)
Higher level emergency department visits (CPT codes 99284-99285)
Hospital, Intensive Care Unit, Emergency care, Observation stays (CPT codes 99217-99220; 99221-99226; 99484-99485, 99468-99472, 99475- 99476, and 99477- 99480)

At the same time, CMS is requesting comment on the specific codes mentioned above to see if they should be considered for Category 3 status.

Direct Supervision by Interactive Telecommunications Technology

During the COVID-19 PHE, CMS revised the definition of “direct supervision” to include virtual presence of the supervising physician or practitioner using interactive audio/video real-time communications technology. In the 2021 PFS proposed rule, CMS is proposing to extend that revision through December 31, 2021.

Supervision of Diagnostic tests by Certain Nonphysician Practitioners (NPPs)

Also during the COVID-19 PHE, nurse practitioners (NPs), clinical nurse specialists (CNSs), physician assistants (PAs) and certified nurse-midwives (CNMs) have been allowed to supervise the performance of diagnostic tests in addition to physicians. Previously, these nonphysician practitioners were authorized under Medicare regulations to order and furnish diagnostic tests, whereas only physicians (medical doctors and doctors of osteopathy) were authorized to supervise the performance of diagnostic tests.

For 2021, CMS is proposing to add this diagnostic supervisory role permanently to the scope of practice for NPs, CNSs, PAs and CNMs as long as it falls within their state scope of practice and applicable state law and provided they maintain the required statutory relationships with supervising or collaborating physicians.

MIPS

In light of the COVID-19 PHE, CMS has proposed limited changes to MIPS policies that “focus on the highest priorities for the program.” Here are a few changes to particularly take note of.

Quality and Cost Performance Category Weighting

Performance categories will be weighted as follows for 2021, representing slight changes from 2020 (as noted below):

Quality = 40% (down 5% from 2020)
Cost = 20% (up 5% from 2020)
Promoting Interoperability = 25%
Improvement Activities = 15%

By law, the Cost and Quality performance categories must be equally weighted at 30% beginning in the 2022 performance period.

Performance Threshold and Payment Adjustments

Also proposed for the 2021 performance period, the performance threshold would increase to 50 points, up from 45 in 2020, and the exceptional performance threshold would remain at 85 points,

As well, in 2020, the MIPS program reached the maximum negative payment adjustment of -9 percent, with positive payment adjustments up to a factor of 9 percent, and those adjustments will remain the same for 2021.

Performance Period	Performance Threshold	Exceptional Performance Bonus	Payment Adjustment
2017	3	70	Up to +/- 4%
2018	15	70	Up to +/- 5%
2019	30	75	Up to +/- 7%
2020	45	85	Up to +/- 9%
2021	50	85	Up to +/- 9%

Performance Category Updates

Among the various performance categories, the following updates and changes have been proposed for 2021 and beyond:

Quality: Use performance period, not historical, benchmarks to score quality measures for the 2021 performance period; Address substantive changes to 112 existing MIPS quality measures, removing 14 quality measures from the MIPS program, and proposing a total of 206 quality measures starting in the 2021 performance year, including two new administrative claims-based measures.
Cost: Update existing measure specifications to include telehealth services that are directly applicable to existing episode-based cost measures and the TPCC measure.

MIPS Value Pathways

Because of the COVID-19 PHE, MIPS Value Pathways (MVPs), which were supposed to begin in 2021, will not be available for MIPS reporting until the 2022 performance period, or later. In the meantime, the 2021 proposed rule did propose several tweaks to the program, including allowing qualified clinical data registries (QCDRs) to support MVPs starting in 2022.

Complex Patient Bonus

Finally, CMS is proposing to double the complex patient bonus for the 2020 performance period only. Clinicians, groups, virtual groups and APM Entities would be able to earn up to 10 bonus points (instead of 5 bonus points) to account for the additional complexity of treating their patient population due to COVID-19.

Comment

Submit comments about the 2021 Medicare Physician Fee Schedule using one of the methods below, no later than 5 p.m. on October 5, 2020. In commenting, please refer to file code CMS-1734-P.

Electronically: Visit http://www.regulations.gov and follow the “Submit a comment” instructions.

Regular Mail: Send comments to the following address: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1734-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Express or Overnight Mail: Send comments to the following address: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1734-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850.

Learn More

For more information about the proposed rule, including numerous policies that we didn’t have room to highlight, check out the following resources:

Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.