CY 2021 Physician Fee Schedule: Telehealth, Specialists and ACOs

On Tuesday the Centers for Medicare and Medicaid Services (CMS) released the final rule for policy adjustments under the Physician Fee Schedule (PFS) for calendar year 2021. The rule confirmed changes to telehealth payments made during the COVID-19 pandemic, but will make cuts to specialty providers.

Last March, during the onset of the pandemic, CMS waived telehealth regulations by lifting requirements on face-to-face care, adjusting measures such that telehealth beneficiaries could attend appointments from home, expanding the providers who could provide telehealth services and adding 135 services that could be reimbursed by Medicare. The CY 2021 PFS will include even more services, like in-home visits and group psychotherapy.

Some of the provisions are temporary, reports Inside Health Policy. Services like allowing beneficiaries in rural areas to access emergency departments remotely, therapy and critical care services will be added until the end of the year that the COVID-19 pandemic concludes. Furthermore, the rule allows for telehealth visits every 14 days instead of the previous restriction of every 30 days.

The CY 2021 PFS lowers the fee schedule’s conversion factor by $3.68 to $32.41, a 10% reduction. It also made changes to evaluation and management of services and codes, as well as changing the coding criteria and including increasing relative value, according to Modern Healthcare. This could help clinicians deliver telehealth services but other providers may see a decline in revenue. From CMS Administrator Seema Verma, via Modern Healthcare:

This finalized policy marks the most significant updates to E/M codes in 30 years, reducing burden on doctors imposed by the coding system and rewarding time spent evaluating and managing their patients’ care. In the past, the system has rewarded interventions and procedures over time spent with patients – time taken preventing disease and managing chronic illness.

The changes are meant to increase reimbursement for doctors who are face-to-face with patients more often and increase the value of services similar to E/M office visits, according to Healthcare Dive. Because Medicare must be budget neutral, the increases are offset by rate decreases in specialties like surgery, radiology and physical therapy. From Susan Bailey, president of the American Medical Association, via Healthcare Dive:

These cuts will hurt all Medicare patients, particularly those seeking care for COVID-19 critical care and hospital visits that will be reduced dramatically. For this reason, the AMA strongly urges Congress to prevent or postpone the payment reductions resulting from Medicare’s budget neutrality requirement.

It is unlikely that Congress will intervene before the rule begins on January 1. The final rule also gives accountable care organizations in the Medicare Shared Savings program automatic full credit for completing patient experience surveys in 2020 and aligns reporting requirements for the entirety of the Quality Payment Program.

CMS Final Rule Factsheet