CMS Finalizes the Physician Fee Schedule Rule for Calendar Year 2021

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On December 2, 2020, CMS issued a final rule updating the payment policies and rates for services to be furnished under the Medicare Physician Fee Schedule (PFS) in calendar year (CY) 2021. The final rule includes significant rate increases for evaluation and management services (and a corresponding budget-neutrality adjustment for all other services), an expansion of the telehealth services covered by Medicare, an expansion to the range of covered services for non-physician practitioners, and revisions to the definition of “direct supervision” to include virtual presence for the remainder of the public health emergency.

Evaluation and Management Services

CMS is implementing changes to the CPT coding framework for evaluation and management (E/M) services in accordance with recommendations by the American Medical Association (AMA). It is projected that these changes will significantly increase payments for E/M services. As described by the AMA, these changes are intended to “better describe and recognize the resources involved in clinical office visits as they are performed today.”

CMS has implemented a budget neutrality adjustment to account for these changes. In CY 2021, the conversion factor applicable to all payments under the PFS will be $32.41—a decrease of $3.68 from the CY 2020 PFS conversion factor of $36.09. Commenters, including the AMA, roundly opposed this adjustment, stating that it would impose a significant financial burden on health care professionals—particularly those who do not report office visit codes. CMS nonetheless decided that it was required by statute to impose a budget neutrality adjustment.

Changes to Telehealth Services

In the final rule, CMS added nineteen services to the list of Medicare-covered telehealth services for CY 2021. The new services include seven permanent additions and twelve temporary additions that will remain on the list for the remainder of the public health emergency.

The seven permanent additions include Group Psychotherapy (CPT code 90853), Psychological and Neuropsychological Testing (CPT code 96121), and Prolonged Services (HCPCS code G2212). The twelve temporary additions include Home Visits, Established Patient (CPT codes 99349-99350), Hospital discharge day management (CPT codes 99238-99239) and Critical Care Services (CPT codes 99291-99292).

In addition to expanding the number of covered telehealth services, CMS also: (i) changed the frequency limitation for subsequent nursing facility visits from 30 days to 14 days; (ii) clarified that clinical social workers, psychologists, physical therapists and speech-language pathologists can furnish online assessment and management services; and (iii) clarified that the telehealth rules do not apply to services furnished via telecommunications when the physician and patient are in the same building.

Scope of Practice Changes

In the final rule, CMS expanded the range of Medicare covered services for certain non-physician practitioners. Medicare will now cover diagnostic tests supervised by non-physicians who are operating within the scope of their practice (as permitted by state law), including nurse practitioners (NPs), clinical nurse specialists (CNSs), physician assistants (PAs), and certified nurse-midwives (CNMs).

The final rule clarifies that pharmacists may provide services incident to the services of (and under the supervision of) the billing physician if payment for the pharmacist’s services is not made under Medicare Part D. The final rule also clarifies that physical therapists and occupational therapists can delegate the furnishing of maintenance therapy services to therapy assistants.

Teaching Physicians and Moonlighting Services

The final rule changes the requirement that teaching physicians be physically present for the key portions of procedures performed by residents to bill for the procedure. Teaching physicians can now meet the requirement by interacting with the resident virtually. This exception does not apply in the case of surgical, high risk or other complex procedures. In addition, for primary care services furnished by residents in rural areas, teaching physicians can interact with their residents virtually to provide the necessary direction, management and review.

The final rule also expands the settings in which residents can provide moonlighting services. Prior to the rule, services of residents were covered by the PFS if the resident was working outside the scope of his or her training program, but only in the outpatient setting. The final rule expands moonlighting services to include services furnished in the inpatient setting.

Direct Supervision by Interactive Telecommunications Technology

The final rule also finalizes an interim final rule adopted in April 2020 authorizing physicians to provide “direct supervision” by using real-time, interactive audio and video technology. This exception now applies through the later of the end of the public health emergency or the end of CY 2021.

The final rule is available here, and the CMS fact sheet is available here.

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