CY 2021 Medicare Physician Fee Schedule Proposed Rule

On August 3, 2020, the Centers for Medicare and Medicaid Services (CMS) published the Calendar Year (CY) 2021 Medicare Physician Fee Schedule Proposed Rule (PFS Proposed Rule). The agency’s proposals relating to telehealth and remote services are particularly noteworthy given the central role telehealth has taken in response to the COVID-19 pandemic, and increasing speculation about whether temporary policies adopted to facilitate the use of telehealth would extend beyond the Public Health Emergency (PHE).

CMS issued Interim Final Rules in March and May of 2020 implementing temporary policies and flexibilities to support the use of telehealth as a safe alternative to in person services during the PHE.1 Some of the temporary regulatory flexibilities implemented through these rules included expanding the list of services to be covered via telehealth, eliminating frequency limitations and other requirements associated with particular services furnished via telehealth, and clarifying payment rules that applied to other services. Most of these regulatory flexibilities are set to sunset upon the expiration or termination of the PHE.

The CY 2021 PFS Proposed Rule includes proposals to maintain an expanded list of Medicare-covered telehealth services and remote service flexibilities until the end of the CY in which the COVID-19 PHE ends, or in some cases beyond, and to clarify existing policies for remote services. 

Additions to the Medicare Telehealth Services List

Before the COVID-19 PHE, Medicare only covered certain services furnished via telehealth, including (i) professional consultations, (ii) office medical visits, (iii) office psychiatry services, and (iv) any additional service specified by the HHS Secretary when furnished via an interactive telecommunications system (collectively, the Medicare Telehealth List). The last category allows services to be added to the Medicare Telehealth List through the Physician Fee Schedule rulemaking process.

As a threshold matter, CMS proposes to add the following services to the Medicare Telehealth List on a permanent basis because these are services that are similar to the professional consultations, office visits, and office psychiatry services that are already covered on the Medicare Telehealth List.

  • Visit complexity associated with certain office/outpatient E/Ms (GPC1X)
  • Prolonged Services (99XXX)
  • Group Psychotherapy (90853)
  • Neurobehavioral Status Exam (96121)
  • Care Planning for Patients with Cognitive Impairment (99483)
  • Domiciliary, Rest Home, or Custodial Care Services (99334)
  • Domiciliary, Rest Home, or Custodial Care services (99335)
  • Home Visits (99437 and 99438)

In addition, with respect to the following services — which CMS added on a temporary basis through the COVID-related Interim Final Rules — CMS would continue to cover the services, but only until the end of the calendar year in which the PHE ends:

  • Domiciliary, Rest Home, or Custodial Care services, Established Patients (99336, 99337)
  • Home Visits, Established Patient (99349, 99350)
  • Emergency Department Visits for Evaluation and Management of a Patient (99281, 99282, 99283)
  • Nursing Facilities Discharge Day Management (99315, 99316)
  • Psychological and Neuropsychological Testing (96130, 96131, 96132, 96133)

CMS notes that it could foresee a reasonable potential likelihood that the above services may offer clinical benefit when furnished via telehealth beyond the COVID-19 PHE. However, absent additional evidentiary support for their clinical benefit and further consideration from CMS, these services will not be added permanently to the Medicare Telehealth List, at this time.

Finally, there are some telehealth services that are covered during the COVID-19 PHE, but that are not proposed to be added to the Medicare Telehealth List.  For those services, CMS is soliciting comment on whether they should be added on either a temporary or permanent basis. 

For example, CMS does not propose to add initial and/or final discharge interactions (CPT codes 99234-99236 and 99238-99239) as covered services. CMS is concerned that a physician or health care provider may not fully understand the health status of the person with whom they are establishing a clinical and therapeutic relationship without an in-person assessment.

Other Proposals and Clarifications Related to Telehealth Services

Frequency Limitations and Nursing Home “Personally Performed” Requirement

During the COVID-19 PHE, CMS waived the 42 C.F.R. § 483.30(c) requirement for physicians and non-physician practitioners to personally perform the periodic personal visits required for nursing home residents, and allowed these visits to be conducted via telehealth. CMS is seeking comment on the appropriateness of maintaining this flexibility outside of the COVID-19 PHE.

Before COVID-19, subsequent hospital care services (inpatient and nursing facility visits) were limited to one telehealth visit every three days for hospital inpatients and one visit every 30 days for patients in a nursing facility. During the pandemic, CMS temporarily removed these frequency limitations so physicians could provide services to inpatients while quarantining, etc. CMS does not propose to remove frequency limitations on subsequent inpatient visits on a permanent basis due to longstanding concerns about the potential acuity and complexity of patients, which may necessitate in-person visits. The agency is seeking comments on this point, however. Based on stakeholder feedback, CMS proposed to revise the frequency limitation for subsequent nursing facility visits from one visit every 30 days to one visit every three days.

Restrictions on Smart Phones

Current regulations provide that “[t]elephones, facsimile machines, and electronic mail systems do not meet the definition of an interactive telecommunication system.” CMS proposes to revise the definition of “interactive telecommunication systems” to mean any “multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication.” This could include smart phones if all other requirements related to furnishing the service are satisfied.

Physician and Patient in Same Location

CMS reiterates that the telehealth rules do not apply when the beneficiary and the practitioner are in the same location even if audio/video technology assists in furnishing a service (e.g., a physician in a hospital providing services to an inpatient when the physician and inpatient are separated by protective glass for precautionary purposes). In such cases, the practitioner should bill for the service as if it was furnished in person and none of the telehealth statutory restrictions or regulatory requirements apply.

Incident-To Services

CMS proposes to clarify that services that may be billed incident-to may be provided via telehealth incident to a physicians’ services and under direct supervision of the billing professional (consistent with the policy clarification CMS made in the May Interim Final Rule).

Direct Supervision by Interactive Telecommunications Technology

For the duration of the COVID-19 PHE, the “necessary presence of the physician for direct supervision includes virtual presence through audio/video real-time communications technology when the use of such technology is indicated to reduce exposure risks for the beneficiary or health care provider.”2 CMS proposes to allow direct supervision to be provided using real-time, interactive audio and video technology (excluding audio only) through December 31, 2021. CMS also seeks comment on the clinical appropriateness, safety, and utilization, fraud, waste and abuse concerns associated with extending the policy beyond the PHE and any guardrails that should be implemented with either a short or long term extension.

Proposals, Clarifications, and Requests for Comment on Other Virtual Services

There are a number of “virtual” services that Medicare covers that are not technically “telehealth” services as defined by Section 1834(m) of the Social Security Act. Examples include remote interpretation of diagnostic testing and chronic care management. As such, these services are not governed by telehealth’s statutory limitations, e.g., patients need not be in a clinical “originating site” for the Medicare coverage.  Prior to the COVID-19 PHE, CMS finalized proposals to expand coverage of these services when furnished through telecommunications technology and the CY 2021 PFS Proposed Rule continues this trend.

Services Furnished by LCSWs, PTs, OTs, and SLPs

CMS clarifies that licensed clinical social workers (LCSWs), clinical psychologists, physical therapists (PTs), occupational therapists (OTs), and speech language pathologists (SLPs) can furnish brief online assessment and management services, virtual check-ins, and remote evaluation services as clinical practitioners. (Beyond the temporary flexibilities implemented in response to the PHE, these same practitioners cannot provide “telehealth” services because they are not included in the statutory definition of “distant site practitioner” for telehealth services.)

Audio-Only E/Ms

While CMS does not propose to extend the codes for audio-only E/Ms beyond the COVID-19 PHE, CMS is seeking comment on developing coding and payment for an audio-only service similar to a virtual check in, but that would have a longer unit of time and a higher value/payment rate. CMS is also soliciting stakeholder feedback on whether such a code should be adopted permanently or only for the year after the end of the COVID-19 PHE.

Electronic Prescribing of Controlled Substances

Pursuant to section 2003 of the Support Act, the prescribing of a Schedule II, III, IV or V controlled substance under Medicare Part D must be done electronically in accordance with an electronic prescription drug program, subject to HHS-specified exceptions. In this Proposed Rule, CMS seeks input to inform any exceptions and potential penalties for noncompliance.

Remote Physiologic Monitoring (RPM)

In recent years, CMS finalized payment for seven CPT Codes in the RPM code family.3 In the PFS Proposed Rule, CMS clarifies existing payment policy related to RPM services represented by CPT codes 99453, 99454, 99091, 99457, and 99458.

For example, with respect to CPT 99454 — remote monitoring of physiologic parameter(s) that includes instructing a patient and/or care giver about using one or more medical devices — CMS clarifies that the medical device furnished to the patient must meet the FDA definition of a medical device and the patient’s physiologic data must be automatically and electronically collected and transmitted, not self-recorded or self-reported by the patient. Further, the device must be used to collect and transmit reliable and valid physiologic data that allow understanding of a patient’s health status, to develop and manage a treatment plan. 

CMS also clarifies that for CPT 99457 and 99458 — remote physiologic monitoring treatment management services — an “interactive communication” is a conversation that occurs in real-time and includes synchronous, two-way audio interactions “capable of being enhanced with video or other kinds of data transmission.” Like other care management services, these CPT codes can be furnished by clinical staff under the general supervision of a physician or non-physician practitioner (“NPP”).

The PFS Proposed Rule also makes clarifications and proposals related to broadly applicable RPM requirements. CMS clarifies that after the COVID-19 PHE, it will resume the requirement that only established patients may receive RPM services. CMS proposes to make permanent the COVID-19 PHE flexibility allowing consent for RPM services to be obtained at the time the services are furnished. In the proposed rule, CMS clarifies that RPM services should be characterized as E/M services and only physicians and NPPs eligible to furnish E/M services may order and bill for RPM services.

While there was some indication that in the past, RPM services were only for patients with chronic conditions, CMS clarifies that practitioners may furnish RPM services to patients with acute conditions (even outside of the COVID-19 PHE). CMS also proposes to allow auxiliary personnel (including leased or contracted employees) to furnish the RPM services described by CPT codes 99453 and 99454.

Finally, in response to the May 19, 2020 Executive Order 13924, “Regulatory Relief to Support Economic Recovery,” CMS is seeking comment on whether the current RPM codes accurately and adequately describe the full range of clinical scenarios where RPM services may be of benefit to patients. For example, CMS is asking for information to help understand whether it would be beneficial to consider establishing coding and payment rules that would allow practitioners to bill and be paid for RPM services with shorter monitoring periods.

CY 2021 OPPS Proposed Rule

On August 3, 2020, CMS also published the CY 2021 Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems Proposed Rule (OPPS Proposed Rule). During the COVID-19 PHE, the industry pressed CMS hard to permit hospitals to provide services to patients via a telehealth platform and to bill for those services as hospital services on a UB-04 claim form. This was necessary because telehealth services as defined in the Social Security Act include professional services furnished by physicians and certain other licensed practitioners who may be “distant site practitioners” for telehealth. As hospitals provide technical component or institutional services, absent intervention from CMS, hospitals could not provide and bill for services to patients who were located outside the hospital.

There are two references to hospital billing for telehealth services pursuant to COVID-19 PHE waivers in the Proposed OPPS Rule.

  • First, CMS does not propose to extend the current flexibilities for partial hospitalization programs (PHP) beyond the COVID-PHE. That is, during the COVID-19 PHE, hospitals may use hospital-based staff (e.g., LCSWs) to provide PHP services to patients in their homes, provided those homes are made provider-based “temporary expansion locations” pursuant to waivers issued during the COVID-19 PHE. CMS states simply in the CY 2021 Proposed OPPS Rule, “these provisions apply only for the duration of the COVID-19 PHE.”
  • Second, CMS does propose to extend the current flexibilities allowing direct physician supervision via interactive telecommunications technology for cardiac rehabilitation, intensive cardiac rehabilitation and pulmonary rehabilitation services. CMS notes that direct physician supervision via audio/video real-time communications technology enhances patients’ access to care and relieves a burden from providers while still requiring that the supervising physician use her clinical judgment during the rehabilitation services. CMS notes that the physician must be more than “available” by audio/video technology.  Rather, a physician must have real-time presence via interactive audio and video technology throughout the performance of the procedure. CMS is seeking comment on this proposal.


There are many other telehealth waivers and flexibilities that were implemented in response to the COVID-19 PHE that are not addressed in either the PFS or OPPS Proposed Rules. Some of the most limiting restrictions on telehealth, such as the originating site requirements, are statutory and cannot be changed through rulemaking alone. That said, the proposals in the PFS Proposed Rule in particular indicate that within its authority, CMS is making efforts to extend clinically appropriate flexibilities and coverage of telehealth services beyond the COVID-19 PHE.

Public comments on both proposed rules are due by October 5, 2020.

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