Expect Give and Take in 2021 Physician Fee Schedule



In a final rule, CMS expands telehealth coverage but enforces budget neutrality mandate.

After a slight delay, the Centers for Medicare & Medicaid Services (CMS) has finalized 2021 payments and policies under the Medicare Physician Fee Schedule (PFS). Most notably, the final rule makes permanent several telehealth flexibilities introduced during the public health emergency (PHE) for the COVID-19 pandemic while also significantly overhauling reimbursements for many services related to primary care and chronic disease management.

Despite the one-month postponement of its release, the final rule, submitted to the Federal Register on Dec. 1, 2020, will be effective Jan. 1, 2021. These are the top takeaways from the 2021 PFS final rule.

Conversion Factor Reduced by More Than 10 Percent

The final 2021 PFS conversion factor (CF) is $32.41. This represents a decrease of $3.68 from the 2020 CF of $36.09, reducing Medicare payment rates by 10.2 percent. This negative adjustment stems from the statutory requirement that the PFS remains budget neutral in the event revisions to the relative value units (RVUs) that determine physician reimbursement result in an expenditure change of more than $20 million.

The changes to work RVUs are largely due to a significant increase in payment rates for office/outpatient face-to-face evaluation and management (E/M) visits finalized in the CY 2020 PFS final rule, which goes into effect in 2021. In addition to the valuation changes for E/M office visits, the 2020 final rule confirmed simplified coding and documentation changes for billing for these visits, effective Jan. 1, 2021.

These policies slated to go into effect in 2021 remain unchanged. Although, CMS has revised how it will consider total time for services, adopting actual total times — defined as the sum of the pre-, intra-, and post-service times — rather than the total times previously recommended for CPT® codes 99202 through 99215 to be consistent with other services.

Permanent Additions to Telehealth List Revealed

One of the key changes implemented through COVID-19 waivers was expanded flexibility for telehealth services. Since the beginning of the PHE, CMS has added 144 telehealth services — emergency department visits, initial inpatient and nursing facility visits, discharge day management services — that are covered by Medicare through the end of the PHE. As a result, more than one-third of beneficiaries have received a Medicare telemedicine service during the COVID-19 PHE.

Given the benefits telemedicine affords to both providers and patients alike, CMS is expanding the number of services available to Medicare beneficiaries through telehealth capabilities in 2021. The final rule confirms the addition of more than 60 of the 144 added services to the Medicare telehealth list on a Category 1 (permanent) basis. The codes made permanent are similar to those currently on the list and include:

CPT®/HCPCS Level II CodesService Category
G2211 (formerly GPC1X)Visit Complexity Inherent to Certain Office/Outpatient E/M
G2212 (formerly 99XXX)Prolonged Services
90853Group Psychotherapy
96121Psychological and Neuropsychological Testing
99334-99335Domiciliary, Rest Home, or Custodial Care Services, Established Patients
99347-99348Home Visits, Established Patients
99483Cognitive Assessment and Care Planning Services

Category 3 for Services Temporarily Added to the Medicare Telehealth List

CMS finalized a new category of telehealth benefits under the PFS. The new Category 3 list will include telehealth services covered by Medicare during the PHE and through the calendar year in which the emergency declaration expires. This third category is for the services CMS added throughout the year to the list of covered Medicare telehealth services on a temporary basis.

Category 3 codes are services for which there is likely a clinical benefit when furnished via telehealth, but where there is currently insufficient evidence to permanently add coverage for these services. Thus, these services will remain on the list of approved telehealth services through the calendar year in which the COVID-19 PHE ends, likely Dec. 31, 2021.

CMS has identified the following services as temporary additions to the Medicare telehealth list in Category 3:

CPT® Codes Service Category
99336-99337Domiciliary, Rest Home, or Custodial Care services, Established Patients
99349-99350Home Visits, Established Patient
99281-99285Emergency Department Visits, Levels 1-5
99315-99316Nursing Facilities discharge day management
96130-96133; 96136-96139Psychological and Neuropsychological Testing
97161-97168, 97110, 97112, 97116, 97535, 97750, 97755, 97760, 97761, 92521-92524, 92507Therapy Services, Physical and Occupational Therapy, All levels
99238-99239Hospital discharge day management
99469, 99472, 99476Inpatient Neonatal and Pediatric Critical Care, Subsequent
99478-99480Continuing Neonatal Intensive Care Services
99291-99292Critical Care Services
90952, 90953, 90956, 90959, 90962End-Stage Renal Disease Monthly Capitation Payment codes
99217; 9224-99226Subsequent Observation and Observation Discharge Day Management

Additional Telehealth-Related Actions

Other actions concerning telehealth and other services involving telecommunications technology detailed in the final rule include CMS:

  • Finalizing a frequency limitation for subsequent nursing facility (NF) telehealth visits of one visit every 14 days, as is done in the inpatient setting. Currently, subsequent nursing facility care visits furnished via telehealth are limited in frequency to once every 30 days.
  • Clarifying that licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists, and speech-language pathologists can deliver brief online assessment and management services, as well as virtual check-ins and remote evaluation services. The final rule includes two new HCPCS Level II codes to support billing by these providers for remote evaluation of patient video/images and virtual check-ins.
  • On an interim basis, for the duration of 2021, CMS created HCPCS Level II code G2252 for extended services delivered via synchronous communications technology, including audio-only telephone services (e.g., virtual check-ins). The service is considered to be a communication technology-based service (CTBS). It is intended for situations when the acuity of a patient’s problem is not likely to warrant an in-person visit, but when additional time (11-20 minutes) is needed to make this assessment.
  • Updating and clarifying coding for remote physiologic monitoring services

“Telehealth has long been a priority … But the pandemic accentuated just how transformative it could be, and several months in, it’s clear that the healthcare system has adapted seamlessly to a historic telehealth expansion that inaugurates a new era in healthcare delivery.”

CMS Administrator Seema Verma

Other Major Determinations and Clarifications

Immunization Services

CMS is maintaining payment rates for services described by CPT® codes 90460, 90461, 90471, 90472, 90473, and 90474, and HCPCS Level II codes G0008, G0009, and G0010 at their CY 2019 payment levels.

Direct Supervision Redefined

For the duration of the COVID-19 PHE, for purposes of limiting exposure to COVID-19, CMS has adopted an interim final policy revising the definition of direct supervision to include the virtual presence of the supervising physician or practitioner using interactive audio/video real-time communications technology.

Increased Payment for Bundled Services

As noted, CMS will increase payment rates for office and outpatient E/M visits beginning in 2021. In the final rule, CMS is increasing the value of many bundled services that are comparable to, rely upon, or include office/outpatient E/M visits commensurate with the value increases finalized for office/outpatient E/M visits in 2021. These services include:

  • 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 and Subsequent Annual Wellness Visits (AWV)
  • Emergency Department Visits
  • Therapy Evaluations
  • Psychiatric Diagnostic Evaluations and Psychotherapy Services

The final rule also clarifies the definition of HCPCS Level II add-on code G2211 (formerly referred to as GPC1X), finalized in the CY 2020 PFS final rule for office/outpatient E/M visit complexity, and refines utilization assumptions for this code. CMS also modified their expectations for the reporting percentage for this code. For CY 2021, they are assuming that G2211 will be reported with 90 percent of office/outpatient E/M visits by specialties that rely on these E/M visits to report the majority of their services.

Furthermore, CMS is finalizing separate payment for a new HCPCS Level II code (G2212) describing prolonged office/outpatient E/M visits. This code is to be used in place of CPT® code 99417 (formerly referred to as 99XXX) to clarify the times for which prolonged office/outpatient E/M visits can be reported.

Scope of Practice Adjustments

The PFS final rule makes permanent several workforce flexibilities, such as diagnostic test supervision and delegation of therapy services, afforded during the PHE. These allowances enable non-physician practitioners (NPPs) to provide the care they are trained and licensed to give, without imposing additional restrictions by the Medicare program.


The final rule also details several updates to the Quality Payment Program. Look to the Knowledge Center to learn more about these changes in the article, “Final Rule Updates MIPS Policy for 2021 and Beyond.”


“This finalized policy marks the most significant updates to E/M codes in 30 years, reducing burden on doctors imposed by the coding system and rewarding time spent evaluating and managing their patients’ care.”

CMS Administrator Seema Verma

Resources

CMS Fact Sheet: “Final Policy, Payment, and Quality Provisions Changes to the Medicare Physician Fee Schedule for Calendar Year 2021,” Dec. 1, 2020

2021 Physician Fee Schedule and Quality Payment Program final rule

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