CMS Finalizes 2021 Medicare Physician Fee Schedule – Includes Decrease in Conversion Factor and Telehealth Expansion

Last Updated: Dec 3, 2020

On Dec. 1, 2020, the Centers for Medicare and Medicaid Services (CMS) issued the 2021 Medicare Physician Fee Schedule (MPFS) Final Rule.

The Pennsylvania Medical Society (PAMED) Practice Support Team started analyzing the 2,165-page rule, and here are some highlights:

Evaluation & Management (E/M) Codes

Last year, the 2020 MPFS included CPT guidelines to report office and outpatient E/M visits based on either medical decision making or physician time. The changes were finalized to become effective Jan. 1, 2021.

CMS adopted relative value recommendations from the AMA/Specialty Society RVS Update Committee (RUC) for implementation Jan. 1, 2021, leading to increased reimbursement for some E/M services. However, CMS did not apply the recommended values to the visits bundled into global surgical payments.

Last year, the 2020 MPFS included CPT guidelines to report office and outpatient E/M visits based on either medical decision making or physician time. The changes were finalized to become effective Jan. 1, 2021.

CMS also finalized separate payment for new HCPCS code, G2212, for prolonged office/outpatient visits – to be used in place of CPT 99417.

CMS finalized re-valuation of the following code sets that are analogous to E/M visits:

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

Budget Neutrality Adjustments

Significant increases in Medicare physician payment rates must be offset by across-the-board decreases. This budget neutrality requirement means that office and outpatient E/M visits would lead to an approximate 5 percent payment reduction affecting physicians and non-physician practitioners who do not report office visits.

The AMA has calculated the impact this will have on specialty payments, with family medicine increasing by 13 percent and many specialties that do not perform office visits decreasing by 8 percent or more. For estimated impact by specialty, click here.

Although stakeholders urged CMS to waive the budget neutrality impacts of the Medicare E/M policies due to the COVID-19 pandemic, CMS finalized a 2021 physician payment conversion factor (CF) of $32.41, which is a decrease of $3.68 (10.2 percent) from the $36.09 2020 CF. The 2021 anesthesia CF is $20.04, which is a decrease of $2.15 from the 2020 CF of $22.20.

Telehealth

For 2021, CMS finalized the addition of several services to the Category 1 Medicare telehealth list. According to CMS, services added to the Medicare telehealth list on a Category 1 basis are similar to services already on the telehealth list:

  • Group Psychotherapy (CPT code 90853)
  • Psychological and Neuropsychological Testing (CPT code 96121)
  • 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 Evaluation and Management (E/M) (HCPCS code G2211)
  • Prolonged Services (HCPCS code G2212)

In its 2021 MPFS Final Rule, CMS finalized the creation of a third temporary category of criteria for adding services to the list of Medicare telehealth services. Category 3 describes services added to the Medicare telehealth list during the public health emergency (PHE) for the COVID-19 pandemic that will remain on the list through the calendar year in which the PHE ends.

CMS also finalized the addition of the following list of services to the Category 3 Medicare telehealth list:

  • 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 established payment for new HCPCS code G2252 for 11-20 minutes of medical discussion to determine the necessity of an in-person visit on an interim basis for the duration of the PHE. A direct crosswalk to CPT code 99442 was finalized, as well.

CMS finalized a frequency limitation for subsequent nursing facility telehealth visits of one visit every 14 days.

CMS also clarified that licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists, and speech-language pathologists can perform the brief online assessment and management services as well as virtual check-ins and remote evaluation services. CMS established two new HCPCS G codes – G2010 and G2012 – to facilitate billing by these practitioners for the remote evaluation of patient-submitted video or images and virtual check-ins.

In its 2021 MFPS Final Rule, CMS also clarified that telehealth rules do not apply when the beneficiary and the practitioner are in the same location even if audio/video technology assists in furnishing a service.

Direct Supervision by Interactive Telecommunications Technology

Due to the COVID-19 pandemic, CMS finalized that direct supervision may be provided using real-time, interactive audio and video technology through the later of the end of the calendar year in which the PHE ends or Dec. 31, 2021.

Medical Record Documentation

CMS clarified that physicians and NPPs, including therapists, can review and verify documentation entered into the medical record by members of the medical team for their own services that are paid under the 2021 MPFS.

It also clarified that therapy students, and students of other disciplines, working under a physician or practitioner who furnishes and bills directly for their professional services to the Medicare program, may document in the record as long as the documentation is reviewed and verified (signed and dated) by the billing physician, practitioner, or therapist.

Additional Resources

AMA Reference Sheet on E/M Coding Guidelines for 2021

CMS 2021 MPFS Fact Sheet

PAMED members with questions on the 2021 MPFS can contact our Knowledge Center at 800-228-7823 or KnowledgeCenter@pamedsoc.org.

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