Finally: CMS releases 2021 final rule; no major surprises seen

December 15, 2020 | By By Grant Huang, CPC, CPMA

At long last, CMS has published its Medicare Physician Fee Schedule (PFS) final rule, and while some of the provisions will be widely felt across many specialties, there are no major or unexpected deviations from the proposed rule. The agency typically releases the PFS final rule at the end of October or in the first two weeks of November. This time the document – which weighs in at 2,165 pages – arrived much later, on Dec. 1, amidst an unusual and contentious presidential transition.

Major provisions include a significant reduction to the Medicare conversion factor, offset by higher Relative Value Unit (RVU) allocations for E/M services, the 2021 E/M guideline changes for office/outpatient codes, additional clarifications to telehealth services rendered during the COVID-19 Public Health Emergency (PHE), telehealth coverage policies that will last beyond the PHE, virtual supervision clarifications, and more.

In this article, we will summarize the biggest items in the final rule in the highlight bullets below:

Conversion factor cut hits surgical specialties hardest. The PFS cuts the conversion factor to $32.41, a decrease of $3.68 from the 2020 value of $36.09. This 10.2% decrease is the largest one-year reduction to the conversion factor in the history of the Resource-Based Relative Value Scale (RBRVS), which has been the basis for Medicare’s payment methodology since its introduction in 1992. The last significant conversion factor drop came in 2011 when it fell $2.9 (a 7.9% reduction). The conversion factor is applied to the RVUs of all E/M and procedure codes, but E/M services will actually see a net payment increase because CMS is raising their RVUs. Because the agency is bound by law to observe budget neutrality, the conversion factor cut is needed to help offset the E/M increases. This means that surgical specialties will see the biggest drop in Part B reimbursement.
E/M reimbursement rises, benefitting ‘cognitive’ specialties. The reimbursement increases for E/M codes are being made to reflect values established by the AMA’s Relative Value Update Committee (RUC), which conducted a nationwide survey on the costs and resource use of furnishing E/M services. Those specialties that primarily report E/M codes, which are sometimes called the “cognitive” specialties to reflect the medical decision-making work that is fundamental to E/M services, will see outsized Part B payment gains. For example, endocrinologists are projected to see a 16% increase in Medicare allowed charges in 2021, according to projections in the PFS final rule. Other projected beneficiaries include allergy/immunology (+9%), family practice (+13%), hematology/oncology (+14%), and rheumatology (+15%).
2021 E/M guidelines finalized. The much-awaited 2021 E/M guidelines will be adopted by CMS with virtually no changes from the language in the proposed rule. CMS will follow CPT’s 2021 time requirements for 99202-99215. Note that the 2021 CPT time requirements give the time for each E/M code as a range (e.g., 30-39 minutes for 99214), rather than as a single number as was the case in prior years.
New prolonged services codes +99417 and +G2212. Because the 2021 E/M guidelines for office/outpatient codes allow non-consecutive and non-face-to-face time spent on the date of the E/M encounter to be combined with face-to-face time, CPT created the new add-on code +99417 to reflect this type of combined time. The catch is that +99417 can only be appended to the level 5 codes (99215, 99205) for each additional 15 minutes of combined direct face-to-face and non-face-to-face time beyond those codes’ time thresholds in 2021 (55 minutes for 99215 and 75 minutes for 99205). CMS has its own code, +G2212, which functions in the same way as +99417.
New add-on code +G2211 for visit ‘complexity.’ The new HCPCS add-code +G2211 (visit complexity inherent to E/M associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious, or complex condition) will be introduced in 2021. This add-on code is reported with the one of the office/outpatient E/M codes being the required primary code. CMS intends this code to pay for “the time, intensity, and practice expense when practitioners furnish services that enable them to build longitudinal relationships with all patients and to address the majority of patients’ health care needs with consistency and continuity over longer periods of time.” Documentation requirements remain vague at this point, but CMS says it anticipates +G2211 could see 90% utilization in 2021. The code has a wRVU of 0.33; by comparison, the wRVU for 99212 is 0.48. Look for more details on this code in future NAMAS articles.
Telehealth for 2021 and beyond. CMS will add home visits and group psychotherapy to its list of telehealth-eligible services as a permanent measure. Other steps will be restricted to the duration of the COVID-19 PHE, including hospital care services, critical care, nursing facility services, and physical and occupational therapy. The agency notes that some of its biggest telehealth waivers, such as the removal of geographic restrictions on telehealth services, will expire when the PHE is over because CMS lacks the authority to maintain them outside of the emergency status. Congressional action would be required to enshrine these waivers as permanent policy.
“Virtual” direct supervision clarified. The PFS will finalize an interim final rule policy that allows Medicare’s direct supervision requirement (used for incident-to services) to be satisfied using real-time audio and video communications, without the physical presence of the supervising provider in the office suite.
NPP supervision of diagnostic tests. CMS will make permanent the current COVID-19 PHE regulatory flexibility that allows nurse practitioners, clinical nurse specialists, physician assistants, certified nurse-midwives, and certified registered nurse anesthetists to supervise the performance of diagnostic tests within their scope of practice and if in compliance with applicable state law. This flexibility will remain after the PHE ends.