CMS Releases FY2021 Medicare Physician Fee Schedule Final Rule, Permanently Expanding Telehealth, Increasing Rates, and Broadening Scope of Practice for Non-Physicians

On December 1, 2020, CMS released its FY2021 Final Rule (“Final Rule”) updating the Medicare Physician Fee Schedule (MPFS). The MPFS Final Rule is part of an annual cycle of regulations released during the fourth quarter of each calendar year which makes changes and updates to the various payment systems that comprise Medicare Parts A and B. The Final Rule makes several significant changes to fee schedules, including the permanent expansion of telehealth services, the increase of rates for services provided in a primary care setting, and broadening the scope of practice for non-physician practitioners. Each of these are discussed in greater detail below.

This year’s version of the final rule makes some important announcements about the future of Medicare reimbursement and reflect the way in which CMS projects the health care system has permanently shifted as a result of COVID-19.

Telehealth Expansion

Historically, Medicare has only reimbursed providers for a limited set of professional services provided via telehealth methodologies to patients in rural areas. As a result, telehealth adoption in the Medicare population has been halting. As part of the federal government’s response to COVID-19, in March, CMS announced an expansion of the types of providers, the types of services, and the patient locations (including patient homes and outside of rural areas) which would be eligible for reimbursement if provided via telehealth. This change became a necessity as part of a strategy to keep vulnerable Medicare beneficiaries away from contact with others in areas such as waiting rooms. As part of the MPFS Final Rule, CMS has announced that many of these temporary waivers and flexibilities will become permanent.¹

Specifically, more than 60 services will be added to the list of telehealth-eligible services. However, and perhaps most importantly, the expansions which allowed Medicare beneficiaries to access Medicare-covered telehealth services outside of designated rural areas and in locations other than health care facilities (e.g. their homes) are not being continued past the end of the COVID-19 public health emergency, due to a lack of statutory authority within CMS to do so. CMS seems keenly interested in further expanding telehealth and providing additional flexibility not in the context of a global pandemic, so we may expect this to be part of a Medicare “wish list” in future legislation, either as a follow-up from the ACA or some other pandemic omnibus relief package.

Primary Care

It has long been recognized by observers that Medicare’s reimbursement system, among other incentives within the industry, disadvantaged primary care providers and may have kept the number of primary care practitioners artificially low relative to patient needs. The MPFS Final Rule continues a recent trend of increasing rates on the types of services provided in a primary care setting. This goes along with changes previously announced which will simplify the E/M documentation and coding requirements, areas that have been the subject of frustration within the provider community and a frequent target of audits.

Scope of Practice

Finally, the MPFS Final Rule is making permanent additional changes that were part of COVID-19 response measures dealing with the permissible scope of practice of non-physician practitioners who are increasingly providing more and more care to Medicare beneficiaries. This includes a broader scope of practice for supervision of diagnostic tests, physical and occupational therapy and allowing additional delegation of care under a plan of care to affiliated professionals. It is anticipated that these changes will help practitioners more efficiently manage their workforces and provide opportunities for all practitioners (including physicians) to practice at “the top of their license.” Practitioners should be warned however that CMS’ changes do not alleviate issues that remain under state law scope of practice limitations.