Happy New Year? 2021 Medicare Physician Fee Schedule is a Mixed Bag
While much of the health care industry looks to put this year in the rear view mirror, planning ahead for Connecticut providers who treat Medicare beneficiaries requires taking stock of the recently issued Physician Fee Schedule Final Rule that goes into effect January 1, 2021. The Centers for Medicare and Medicaid Services (CMS) annual update of payment rates and policies adopts simplified evaluation and management (E/M) coding and documentation requirements, and expands coverage for telehealth services and the scope of practice of non-physician practitioners, but all of this is tempered by the final rule significantly reducing reimbursement for some providers.
Simplified E/M Requirements
Significantly, the final rule increases payment rates for office/outpatient face-to-face evaluation and management (E/M) visits and implements simplified coding and documentation guidelines for these visits. The guidelines will give providers greater discretion to choose the visit level based on either medical decision-making or the time actually spent with patients. These changes, which were developed in collaboration with the American Medical Association (AMA) and other stakeholders, are intended to free providers from an estimated 2.3 million hours per year in administrative burden according to the CMS Press Release that accompanied the rule.
Telehealth Expansion
The final rule adds a number of services that Medicare will reimburse when delivered via telehealth. Although the majority of these services are scheduled to remain reimbursable only through the end of the calendar year in which the current public health emergency (PHE) declared by the U.S. Department of Health and Human Services (HHS) expires,[1] nine services, with many of them being geared toward behavioral health, are being added on a permanent basis.[2] The final rule also confirms that the “direct supervision” of auxiliary personnel providing services “incident to” a physician or non-physician practitioner may continue to be provided by real time, interactive means through the end of the calendar year in which the PHE expires.
In announcing these changes, CMS Administrator Seema Verma explained that “the pandemic accentuated just how transformative [telehealth] could be, and several months in, it’s clear that the healthcare system has adapted seamlessly to a historic telehealth expansion that inaugurates a new era in healthcare delivery.” CMS also announced that it is commissioning a study to “explore new opportunities for services where telehealth and virtual care supervision, and remote monitoring can be used to more efficiently bring care to patients and to enhance program integrity, whether they are being treated in the hospital or at home.”
Non-Physician Practitioners
The final rule also makes permanent expansions to the scope of practice for certain non-physician practitioners (“NPPs”) originally implemented to respond to the PHE. In particular, nurse practitioners, clinical nurse specialists, physician assistants, certified nurse-midwives, and certified registered nurse anesthetists will be able to supervise the performance of diagnostic tests beyond the pandemic, within the limitations of state law. In addition, physical and occupational therapists may delegate the performance of maintenance therapy to a physical or occupational therapy assistant post-pandemic and after the PHE expires. These changes are anticipated to allow providers to provide care more efficiently.
Reduction in Reimbursement
The coal in the stocking for providers is that Medicare’s increased spending resulting from the changes to E/M reimbursement triggered a statutorily required budget neutrality adjustment to the physician conversion factor. For CY 2021, the physician conversion factor is $32.4985, which the AMA’s President described as a “shocking reduction of 10.2% to Medicare payment rates”. (See AMA article.) While the impact of the new payment rates varies by specialty, from a 10% reduction for radiology, nurse anesthetists/anesthesiology assistance and chiropractors, to a 16% increase for endocrinologists, the AMA and other organizations are urging Congress to postpone these payment reductions based on their overall impact as many providers struggle to rebound from the pandemic.