CMS Finalizes Telehealth Coverage and Reimbursement Changes in Medicare Physician Fee Schedule Rule

The Big Picture

Since the onset of the COVID-19 pandemic, Congress and the Centers for Medicare & Medicaid Services (CMS) have dramatically—but temporarily—expanded coverage and reimbursement for telehealth services.

On December 1, CMS issued the final calendar year (CY) 2021 Medicare physician fee schedule (MPFS) final rule and interim final rule, including several changes to Medicare Part B telehealth payment policy. The rule makes coverage of certain services permanent, extends coverage for certain other services through the end of the calendar year in which the public health emergency (PHE) ends, and clarifies which services CMS will not be adding to the Medicare telehealth covered services list on either a permanent or temporary basis. The rule also finalizes some changes to coverage of remote physiologic monitoring services and finalizes extending the temporary flexibilities around virtual supervision through the end of 2021.

Despite these changes, the rule also illustrates the limitations that CMS has in broadly expanding coverage and reimbursement given statutory restrictions. Without further congressional action, statutory restrictions on geographic sites, originating sites, eligible technologies, eligible providers, and federally qualified health centers (FQHCs) will come back into effect at the end of the COVID-19 PHE. And with these limitations will come decreased telehealth utilization. Based on the telehealth experience gained during the pandemic, Congress may seek to make permanent—or at least extend on a longer-term basis—certain of these flexibilities.

Telehealth Flexibilities Adopted During the Pandemic

Most of the changes implemented during the pandemic are in effect only for the duration of the Department of Health and Human Services (HHS) PHE. As there are significant statutory restrictions on how telehealth services can be delivered and paid for in Medicare, to enact these flexibilities, the Administration relied on Section 1135 waiver authority, which allows HHS to waive or modify certain Medicare requirements during a federally declared emergency (among other flexibilities).

Principal changes include:

• Lifting the geographic restriction that beneficiaries must be located in a rural area;
• Permitting beneficiaries to receive telehealth services from their homes;
• Allowing a broader range of providers to deliver telehealth services (e.g., physical therapists, occupational therapists, speech-language pathologists);
• Adding coverage and payment for audio-only forms of telehealth;
• Enabling FQHCs and rural health centers to serve as eligible distant sites (i.e., where the provider is located); and
• Expanding Medicare telehealth coverage to more than 100 additional services.

Currently, the HHS PHE is set to expire on January 20, though it has been renewed several times and likely will be extended again. While CMS has taken swift and bold action to expand telehealth coverage and reimbursement, once the HHS PHE expires, so too do most of the flexibilities HHS has enabled.

In the final CY 2021 MPFS, the Administration took steps to make some of these flexibilities permanent and to extend others further, though a permanent extension of the full range of telehealth flexibilities introduced during the PHE would require congressional action.

Final CY 2021 Medicare Physician Fee Schedule Rule—Telehealth Provisions

Changes to Covered Medicare Telehealth Services

The final rule makes a number of changes to the Medicare telehealth covered services list. A range of services will be permanently added to the list, including group psychotherapy, low-intensity home visits, and psychological and neuropsychological testing. In addition, CMS will extend temporary coverage for certain services through the end of the calendar year in which the COVID-19 PHE ends, including high-intensity home visits, emergency department visits, specialized therapy visits, and nursing facility discharge day management. Finally, certain services that have been covered on a temporary basis during the PHE will not be covered on a permanent basis once the PHE ends. This includes services such as telephonic evaluation and management services, initial nursing facility visits, radiation treatment management services, and new-patient home visits. Notably, after significant public comment on the proposed rule supporting the addition of more services to the list of services covered through the calendar year in which the PHE ends, CMS extended coverage for several additional services that it had proposed ending coverage for at the end of the PHE.

Other Changes to Medicare Telehealth Services

In addition to the changes to the telehealth covered services list, CMS is finalizing a change to the frequency limit for subsequent nursing facility visits provided via telehealth—these are typically visits provided by an admitting physician to a patient in an inpatient nursing facility. Currently, CMS only reimburses for one Medicare subsequent nursing facility visit via telehealth every 30 days. In order to enable more frequent telehealth visits on a permanent basis, CMS is revising the limit and will reimburse for one subsequent nursing facility visit via telehealth every 14 days. This will allow for more frequent use of telehealth while keeping a frequency limit in place to ensure that providers are not disincentivized from providing in-person care.

The final rule also permits additional types of providers—licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists, and speech-language pathologists—to bill for brief online assessment and management services, virtual check-ins, and remote evaluations, and the rule adds new codes for these services.

Changes to Audio-Only Services

Federal law provides that Medicare telehealth services must be delivered via a “telecommunications system.” CMS has long interpreted this to preclude audio-only technology. Accordingly, prior to the PHE, the only audio-only services that CMS covered were communication technology-based services (CTBS) such as virtual check-ins, which are not considered Medicare telehealth services. However, during the PHE, recognizing that in-person visits pose a high risk of infection exposure and that not all providers and patients have access to video technology, CMS established temporary coverage for audio-only telephone evaluation and management (E/M) visits. In the MPFS, CMS is finalizing that at the end of the PHE, coverage for these audio-only telephone E/M visits will end given the statutory language regarding “telecommunications systems,” but CMS will add an additional CTBS virtual check-in code during CY 2021 for longer audio-only visits.

Changes to Remote Physiologic Monitoring Services

CMS finalized as proposed several changes to coverage of remote physiologic monitoring (RPM) services. At the conclusion of the PHE, CMS will once again require that practitioners have an established patient relationship in order to initiate RPM services and that practitioners must collect 16 days of data in each 30-day period in order to bill for those services (during the PHE, CMS is only requiring two days of collection for every 30-day period). CMS also finalized that practitioners may furnish RPM services to beneficiaries with acute conditions—previously coverage had been limited to beneficiaries with chronic conditions. In addition, CMS finalized that consent may be obtained at the time the RPM service is furnished; that auxiliary personnel (including contracted employees) may furnish certain RPM device setup and supply services; that data from the RPM device must be automatically collected and transmitted rather than self-reported; and that for the purposes of discussing RPM results, “interactive communication” includes real-time synchronous, two-way interaction such as video or telephone.

Changes to Enable Direct Supervision by Interactive Telecommunications Technology

Typically, CMS requires that “incident to” services can only be provided under the “direct supervision” of a supervising physician or practitioner. “Incident to” services permit nonphysician practitioners to bill certain services under the physician’s supervision, and “direct supervision” typically means in-person supervision. CMS finalized as proposed a policy to allow, on a temporary basis, virtual supervision using “interactive audio/visual real-time communications technology” (i.e., two-way live video), by revising the definition of “direct supervision” to include virtual presence. This will allow “incident to” services to be provided if furnished under the supervision of a virtually present physician or nonphysician practitioner in order to reduce infection exposure risk. CMS will continue allowing virtual supervision through the later of the end of the calendar year in which the PHE ends or December 31.