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August 5, 2020

The 2021 Medicare Physician Fee Schedule proposal: What you need to know

Daily Briefing

    CMS on Monday released its proposed rule to update the Medicare Physician Fee Schedule for calendar year 2021 which, among other things, would boost payments for some physicians, reduce payments for others, and expand the list of telehealth services that Medicare covers.

    Inside the 1,353-page proposed rule

    CMS in a fact sheet said the proposed rule "is one of several … that reflect a broader administration-wide strategy to create a health care system that results in better accessibility, quality, affordability, empowerment, and innovation." The agency is accepting public comments on the proposed rule through Oct. 5.

    Proposed payment-rate updates

    CMS said the proposed rule includes several "standard technical proposals involving practice expense, including the implementation of the third year of the market-based supply and equipment pricing update, and standard rate-setting refinements to update premium data involving malpractice expense and geographic practice cost indices."

    The proposed rule also includes a budget neutrality adjustment that accounts for changes in relative value units (RVUs) that are converted into PFS payments rates, as required by federal law. Under the proposed rule, CMS would set the PFS conversion factor for 2021 at $32.26 when accounting for the budget neutrality adjustment—down $3.83, or more than 10%, from 2020's conversion factor of $36.09.

    Jefferies analysts have said that payment-rate adjustments called for in the proposed rule will reallocate Medicare payments in a way that benefits general practitioners but is detrimental to some specialists, according to Healthcare Dive. For instance, Healthcare Dive reports that payment rates for:

    • Anesthesiology and thoracic surgery would decline by 8%;
    • Emergency medicine and ophthalmology would decline by 6%;
    • General surgery, neurosurgery, and vascular surgery would decline by 7%;
    • Nurse anesthetists would decline by 11%; and
    • Cardiac surgery and physical therapy would decline by 9%.

    In comparison, Healthcare Dive reports that, under the proposed rule, payment rates for general practice and NPs would increase by 8%, and payment rates for family practice would increase by 13%. The proposed rule also would increase certain bundled-payment rates, including bundled payments for ED care, end-stage renal disease, maternity care, and more.

    Further, CMS in the proposed rule calls for rebasing and revising the market basket for federally qualified health centers (FQHCs) to a 2017 base year, meaning the proposed FQHC market basket update for 2021 would be 2.5%. CMS said the proposed payment update for FQHCs is 1.9% for 2021, with a multifactor productivity adjustment of 0.6%.

    In addition, CMS under the proposed rule would create new payments rates for certain services related to administering immunizations. CMS said the new payment rates would "better reflect the relative resources involved in furnishing all of these services, in consideration of payment stability for stakeholders, public health concerns, and the import of these services for Medicare beneficiaries."

    Proposed telehealth expansions

    CMS used the proposed rule to act on an executive order issued by President Trump on Monday that directed the agency to propose a regulation that would expand on the telehealth services covered by Medicare.

    CMS in the proposed rule calls for adding the Healthcare Common Procedure Coding System (HCPCS) codes for 22 services to the list of telehealth services that Medicare covers. The agency would add some of those services to the Medicare telehealth list on a Category 1 basis, because the services are similar to others already included on the list. The services that CMS proposed adding to the list on a Category 1 basis are:

    • Care Planning for Patients with Cognitive Impairment HCPCS Codes 99483;
    • Domiciliary, Rest Home, or Custodial Care services HCPCS Code 99334 and 99335;
    • Group Psychotherapy HCPCS Code 90853;
    • Home Visits HCPCS Codes 99347 and 99348;
    • Neurobehavioral Status Exam HCPCS Code 96121;
    • Prolonged Services HCPCS Code 99XXX; and
    • Visit Complexity Associated with Certain Office/Outpatient E/Ms HCPCS Code GPC1X.

    CMS also proposed creating and adding a temporary third category (Category 3) of services to the Medicare telehealth services list. Category 3 would reflect services that the Trump administration added to the list under the federally declared public health emergency (PHE) in response to America's coronavirus epidemic. Under the proposed rule, Category 3 services would remain on the Medicare telehealth services list through the end of the year in which the PHE declaration ends. The services that CMS proposed adding to the list on a Category 3 basis are:

    • Domiciliary, Rest Home, or Custodial Care services, Established patients HCPCS Codes 99336 and 99337;
    • ED Visits HCPCS Codes 99281, 99282, and 99283;
    • Home Visits, Established Patient HCPCS Codes 99349 and 99350;
    • Nursing facilities discharge day management HCPCS Codes 99315 and 99316; and
    • Psychological and Neuropsychological Testing HCPCS Codes 96130, 96131, and 96132, and 96133.

    CMS is seeking public comment on other services the administration added to the Medicare telehealth services list under the declared PHE that the agency hasn't suggested adding to the list on a potential or temporary basis under the proposed rule.

    CMS under the proposed rule also would:

    • Clarify that Medicare telehealth rules don't apply to services that clinicians provide via telehealth technologies when they're in the same location as the patient, such as when a clinician uses telehealth technologies to avoid potential exposure to a patient infected with the coronavirus;

    • Clarify the types of clinicians who can provide brief online assessment and management services, virtual check-ins, and remote evaluation services via Medicare telehealth; and

    • Revise certain frequency limitations for subsequent nursing facility visits provided via Medicare telehealth, while seeking public comments on possibly removing frequency limitations for the visits altogether.

    In addition, CMS proposed extending a change the administration made under the PHE declaration to federal rules regarding clinician supervision. CMS noted that it temporarily revised the regulatory definition of direct supervision to include instances when a supervising physician or practitioner is overseeing other clinicians via interactive audio/video real-time communications technologies. The agency under the proposed rule would keep that revision in place through Dec. 31, 2021. CMS is seeking public comment on whether it should impose "any guardrails" on that policy or consider extending it further.

    Proposed updates for remote physiologic monitoring services

    CMS under the proposed rule would clarify Medicare payment policies for certain remote physiologic monitoring (RPM) services. For example, the agency proposed clarifying that:

    • CMS considers RPM services to be evaluation and management (E/M) services;

    • CMS will again require that an established patient-physician relationship already exist for RPM services to qualify for Medicare coverage once the PHE declaration ends;

    • Only non-physician practitioners (NPPs) and physicians eligible to provide E/M services are eligible to bill Medicare for RPM services; and

    • Qualifying clinicians may provide RPM services to patients with acute conditions and those with chronic conditions.

    CMS also proposed permanently adopting two clarifications to RPM services that the agency had implemented under the federally declared PHE:

    • Allowing auxiliary personnel, including contracted employees, to provide certain RPM services if they are under a physician's supervision; and

    • Allowing providers to obtain patients' consent at the time RPM services are furnished.

    In addition, CMS said it is seeking public comment on whether current RPM codes accurately capture the full scope of clinical scenarios in which RPM services may benefit Medicare beneficiaries.

    Proposed updates related to professional scopes of practice

    CMS in the proposed rule called for several updates and clarifications regarding professional scopes of practice and related issues.

    For example, CMS under the proposal would allow CNMs, CNSs, NPs, and PAs—in addition to physicians—to supervise the administration of diagnostic tests within their state scope of practice and applicable state laws, as long as they maintain required relationships with collaborating or supervising physicians. CMS already has implemented those allowances under the federal PHE declaration, but the agency is proposing to make the change permanent.

    CMS under the proposed rule also would extend some policies implemented under the PHE declaration that relate to services furnished by pharmacists and physical therapists, as well as certain flexibilities related to medical record reviews and verification. In addition, CMS is seeking public comment on whether to extend some flexibilities regarding Medicare payments for services provided by teaching physicians.

    Other proposed updates

    CMS under the proposed rule also would:

    • Implement Section 2003 of the SUPPORT Act, which mandates that clinicians electronically prescribe certain scheduled drugs in accordance with applicable electronic prescription drug monitoring programs;

    • Make certain updates to Medicare's Diabetes Prevention Program Expanded Model;

    • Revise data reporting periods and the agency's planned phase-in of payment reductions for clinical diagnostic laboratory tests, as called for by recent federal laws; and

    • Update several policies related to Medicare payments for opioid use disorder treatment services provided by opioid treatment programs.

    CMS in the proposed rule also looks to simplify some billing and coding requirements for office and outpatient visits by incorporating revisions recommended by the American Medical Association and other organizations, Modern Healthcare's "Transformation Hub" reports. According to "Transformation Hub," CMS said those revisions—which would take effect Jan. 1, 2021—would save clinicians about 2.3 million hours of work each year.

    In addition, CMS proposed several changes related to Medicare's Quality Payment Program. Those changes are detailed here.


    The American College of Surgeons criticized some of CMS' proposed payment adjustments, which the organization said would lower Medicare payments for some clinicians. "The middle of a pandemic is no time for cuts to any form of health care, yet this proposed rule moves ahead as if nothing has changed," David Hoyt, the group's executive director, said Tuesday (CMS MPFS proposal fact sheet, 8/3; CMS Diabetes Prevention Program fact sheet, 8/3; Pifer, Healthcare Dive, 8/4; Shryock, Medical Economics, 8/4; Brady, "Transformation Hub," Modern Healthcare, 8/3).

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