While much of the health care industry looks to put this year in the rear view mirror, planning ahead for Connecticut providers who treat Medicare beneficiaries requires taking stock of the recently issued Physician Fee Schedule Final Rule that goes into effect January 1, 2021. The Centers for Medicare and Medicaid Services (CMS) annual update of payment rates and policies adopts simplified evaluation and management (E/M) coding and documentation requirements, and expands coverage for telehealth services and the scope of practice of non-physician practitioners, but all of this is tempered by the final rule significantly reducing reimbursement for some providers.

Simplified E/M Requirements

Significantly, the final rule increases payment rates for office/outpatient face-to-face evaluation and management (E/M) visits and implements simplified coding and documentation guidelines for these visits. The guidelines will give providers greater discretion to choose the visit level based on either medical decision-making or the time actually spent with patients. These changes, which were developed in collaboration with the American Medical Association (AMA) and other stakeholders, are intended to free providers from an estimated  2.3 million hours per year in administrative burden according to the CMS Press Release that accompanied the rule.

Telehealth Expansion

The final rule adds a number of services that Medicare will reimburse when delivered via telehealth.  Although the majority of these services are scheduled to remain reimbursable only through the end of the calendar year in which the current public health emergency (PHE) declared by the U.S. Department of Health and Human Services (HHS) expires,[1] nine services, with many of them being geared toward behavioral health, are being added on a permanent basis.[2] The final rule also confirms that the “direct supervision” of auxiliary personnel providing services “incident to” a physician or non-physician practitioner may continue to be provided by real time, interactive means through the end of the calendar year in which the PHE expires.

In announcing these changes, CMS Administrator Seema Verma explained that “the pandemic accentuated just how transformative [telehealth] 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 also announced that it is commissioning a study to “explore new opportunities for services where telehealth and virtual care supervision, and remote monitoring can be used to more efficiently bring care to patients and to enhance program integrity, whether they are being treated in the hospital or at home.”

Non-Physician Practitioners

The final rule also makes permanent expansions to the scope of practice for certain non-physician practitioners (“NPPs”) originally implemented to respond to the PHE. In particular, nurse practitioners, clinical nurse specialists, physician assistants, certified nurse-midwives, and certified registered nurse anesthetists will be able to supervise the performance of diagnostic tests beyond the pandemic, within the limitations of state law. In addition, physical and occupational therapists may delegate the performance of maintenance therapy to a physical or occupational therapy assistant post-pandemic and after the PHE expires. These changes are anticipated to allow providers to provide care more efficiently.

Reduction in Reimbursement

The coal in the stocking for providers is that Medicare’s increased spending resulting from the changes to E/M reimbursement triggered a statutorily required budget neutrality adjustment to the physician conversion factor. For CY 2021, the physician conversion factor is $32.4985, which the AMA’s President described as a “shocking reduction of 10.2% to Medicare payment rates”. (See AMA article.) While the impact of the new payment rates varies by specialty, from a 10% reduction for radiology, nurse anesthetists/anesthesiology assistance and chiropractors, to a 16% increase for endocrinologists, the AMA and other organizations are urging Congress to postpone these payment reductions based on their overall impact as many providers struggle to rebound from the pandemic.

More information on the final rule can be found here: CMS Fact Sheet

[1] These services include: 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, 99224-99226).

[2] These include: Group Psychotherapy (CPT code 90853); Psychological and Neuropsychological Testing (CPT code 96121); Domiciliary, Rest Home, or Custodial Care Services, Established Patients (CPT code 99334-99335); Home Visits, Established Patient (CPT code 99347-99348); Cognitive Assessment and Care Planning Services (CPT code 99483); Visit Complexity Inherent to Certain Office/Outpatient E/M (HCPCS code G2211); and Prolonged Services (HCPCS code G2212).

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