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CMS Finalizes CY 2021 Physician Fee Schedule Rule

The Centers for Medicare & Medicaid Services (CMS) finalized the Medicare Physician Fee Schedule (PFS) rule for calendar year (CY) 2021.

In the rule, CMS establishes a conversion factor, which is used to determine physician payment rates for specific services, of $32.41 — a decrease of $3.68 from CY 2020. The PFS final rule also includes other provisions of importance to essential hospitals, related to Medicare reimbursement for telehealth services, the Quality Payment Program (QPP), and the Medicare Shared Savings Program (MSSP).

Telehealth Provisions

Medicare reimburses practitioners under the PFS for a list of telehealth services updated through annual rulemaking. CMS finalizes its proposal to add nine Healthcare Common Procedure Coding System (HCPCS) codes to the list on a category-one basis, meaning they will be permanent.

Through previous rulemaking, CMS added more than 140 services to the list of reimbursable telehealth services, limited to the duration of the COVID-19 public health emergency (PHE). In the proposed rule, CMS considered adding 13 of these services on category-three basis, meaning they would be reimbursable as telehealth services until the end of the calendar year in which the COVID-19 PHE ends. In the final rule, CMS expands the list of services it will add on a category-three basis to more than 60 HCPCS codes. The list includes levels one to three emergency department visit codes, as well as codes for psychological and neuropsychological testing. America’s Essential Hospitals urged CMS to add a broader list of telehealth services and is pleased CMS considered stakeholder feedback.

CMS has been reimbursing for audio-only evaluation and management (E/M) codes for the duration of the COVID-19 PHE. In the proposed rule, CMS sought comment on making payment and coding changes that would permanently reimburse for certain audio-only codes. Based on comments CMS received in support of reimbursement for audio-only codes, including from the association, CMS in the CY 2021 rule finalizes on an interim basis payment for audio-only virtual check-ins of 11–20 minutes through HCPCS code G2252.

CMS also makes changes to its policies on remote physiologic monitoring (RPM) services. The agency will permanently allow consent for RPM to be obtained at the time services are provided — a change implemented during the PHE. Additionally, CMS will allow two RPM service codes to be furnished by auxiliary personnel under the supervision of a physician.

Evaluation and Management Coding Changes

CMS finalizes the revaluation of payment codes falling under eight categories:

  • end-stage renal disease monthly capitation payment services;
  • transitional care management services;
  • maternity services;
  • cognitive impairment assessment and care planning;
  • initial preventive physical examination and initial and subsequent annual wellness visits;
  • emergency department visits;
  • therapy evaluations; and
  • psychiatric diagnostic evaluations and psychotherapy services.

For these categories of codes, CMS updates the work relative value units (RVUs), which are used in determining the PFS payment amount for services. CMS makes these changes to align payment for these codes with changes finalized in the CY 2020 final rule to E/M services.

Physician Supervision

During the COVID-19 PHE, CMS modified the requirements for direct supervision by physicians or practitioners, allowing them to supervise the provision of services using real-time interactive audio-video communications technology. CMS finalizes its proposal to allow direct supervision requirements to be met using real-time interactive audio-video communications technology through the later of the end of the calendar year in which the COVID-19 PHE ends or Dec. 31, 2021.

Professional Scope of Practice

CMS makes permanent its COVID-19 PHE policy allowing nurse practitioners, clinical nurse specialists, certified nurse-midwives, and physician assistants to supervise diagnostic tests, as allowed by state law and licensure, if required statutory relationships with supervising or collaborating physicians are maintained. CMS also adds certified registered nurse anesthetists to the list of practitioners.

CMS finalizes a policy to permanently allow physical and occupational therapists to delegate maintenance therapy services to assistants, as clinically appropriate. Additionally, the agency makes permanent flexibility allowing pharmacists to provide services incident to the professional services provided by physicians or nonphysician practitioners, who bill Medicare Part B under the PFS, if the services are within the pharmacist’s scope of practice and applicable under state law. These policies were first implemented on a time-limited basis through interim rulemaking during the COVID-19 PHE.

Payment for Services of Teaching Physicians

Through interim rulemaking during the COVID-19 PHE, CMS instituted certain policies pertaining to teaching physicians’ supervision of residents. These policies included allowing teaching physicians to supervise residents through audio-video real-time communications technology. After seeking comment in the proposed rule on whether to extend these policies permanently, CMS finalizes a more limited policy to allow for remote supervision only in the cases of services provided in rural residency training sites — that is, those located outside of a metropolitan statistical area.

Quality Payment Program Updates

CMS finalizes updates to the QPP, which includes the default Merit-based Incentive Payment System (MIPS) track and the Advanced Alternative Payment Program (Advanced APM) participation track. The maximum negative payment adjustment for the 2023 payment year is 9 percent.

In recognition of clinicians working to address the COVID-19 pandemic, CMS will not introduce any MIPS Value Pathways (MVPs) into the program for the 2021 performance period, as previously finalized. MVPs will not be available for MIPS reporting until the 2022 performance period or later.

CMS finalizes its proposal to sunset the CMS Web Interface as a collection and submission type. However, in response to stakeholder concern about timing of sunsetting during the COVID-19 PHE, the agency extends the availability of the CMS Web Interface for reporting MIPS quality measures through the 2021 performance period.

Notably, CMS finalizes — for the 2020 performance period only — to double the complex patient bonus to 10 points to account for the additional complexity of treating this population due to COVID-19.

The agency also finalizes a new reporting framework, the APM Performance Pathway (APP), to begin in 2021. The APP is complementary to the MVPs and designed to streamline reporting and scoring requirements for MIPS clinicians participating in MIPS APMs. The APP will have a defined set of six quality measures.

CMS will host a webinar Dec. 9 from 2–3pm ET to provide an overview of the QPP final rule.

Medicare Shared Savings Program

Due to the COVID-19 PHE, for performance year 2020 in the MSSP, CMS finalizes policies to waive the patient experience of care survey reporting requirement and to provide automatic full credit for the patient experience of care surveys.

For the 2021 performance year, accountable care organizations (ACOs) will be required to report quality data via the new APP reporting framework. ACOs will be able to continue to use the CMS Web Interface to report 10 quality measures for 2021 performance year only. The CMS Web Interface will sunset after the 2021 performance year. Under this new approach, quality scores for ACOs that have been reported through the APP will satisfy reporting requirements under both MIPS and the MSSP.

CMS also finalizes a gradual phase-in of the increase in the level of quality performance that would be required for ACOs to meet the MSSP quality performance standard and qualify to share in savings. Specifically, a 30th percentile threshold for performance years 2021 and 2022, and a 40th percentile threshold for performance year 2023.

CMS will host a Dec. 10 webinar from 1:30—3 pm ET to review provisions of the PFS final rule.

America’s Essential Hospitals is reviewing the final rule and will send members a detailed Action Update in the coming days.

Contact Senior Director of Policy Erin O’Malley at or 202.585.0127 with questions.


About the Author

Maryellen Guinan is a principal policy analyst at America's Essential Hospitals.

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