On August 3, the Centers for Medicare and Medicaid released the proposed 2021 Medicare Physician Fee Schedule that sets Medicare payment and quality provisions for physicians in 2021. The 2021 proposed rule increases payments for some specialties, reduces payments for others, and expands the list of telehealth services covered by Medicare. All of this will have significant implications for medical billing and coding.

“The calendar year (CY) 2021 PFS proposed rule is one of several proposed rules that reflect a broader Administration-wide strategy to create a healthcare system that results in better accessibility, quality, affordability, empowerment, and innovation,” noted CMS.

The highlights of the 2021 Medicare Physician Fee Schedule proposal are as follows:

  • Expansion of Medicare-covered telehealth and rural health services:
    • Addition of complex visits that allow billing for more advanced office/outpatient evaluation and management (E/M) codes, prolonged services, group psychotherapy, neurobehavioral status exam, care planning for patients with cognitive impairment and home visits
    • Temporary additions for CY 2020 include certain home visits, emergency department visits and nursing facility discharges
    • Making other changes to retain certain COVID-19 telehealth flexibilities
  • Simplifying billing and coding requirements for office and outpatient visits: CMS proposes to adopt revised and increased work RVUs for E/M services based on recommendations from the AMA Relative Value Scale Update Committee (RUC). E/M modifications will reduce the documentation burden and also significantly increase payment for office visits.
  • Revaluing other services analogous to office E/M services: The 2021 PFS rule proposes to revalue services such as transitional care management, maternity care, and end stage renal disease.
  • Reduction in the PFS conversion factor by 10.61% for CY 2021: While the physician conversion factor remained flat in the CY 2020 Physician Fee Schedule, CMS proposes to reduce the PFS conversion factor by 10.61% for CY 2021. Physicians will see a reduced conversion factor from $36.09 to $32.26, effective Jan. 1, 2021. This is the result of Medicare’s budget neutrality requirement for the office visit and other payment increases.
  • Updates significant to cardiology: The proposals include updates to work and/or practice expense (PE) values for codes relating to E/M, intracardiac echocardiography, electrocardiography, EP infusion stimulation, transthoracic echocardiography, VAD interrogation, venography, and extracorporeal counterpulsation. It also includes proposed work and/or PE values for new/revised codes describing extended external ECG monitoring, atrial septostomy, nuclear physicist dose consultation, and percutaneous ventricular assist device services.
  • Other notable proposals include:
    • Changes to enable health care professionals to practice at the top of their licenses.
    • Implementing provisions of the Substance Use-disorder Prevention that Promotes Opioid Recovery and Treatment for Patients and Communities Act, including Medicare coverage for opioid treatment programs, screening for substance use disorder in Medicare physicals, and electronic prescribing of controlled substances.

Under the 2021 proposed rule, some specialties will see increase in Medicare payments while others will see decrease in payments.

General practice and NPs would see an increase of 8% in payment rates, and family practice payment rates would increase by 13%. certain bundled-payment rates, including bundled payments for ED care, end-stage renal disease, and maternity care would also see increases under the proposed rule.

The increase in office visit payment and other new CMS proposed payment increases, are required to be offset by payment reductions to other services, according to federal law. Fierce Healthcare reported that the AMA noted that this results in an “unsustainable” reduction of nearly 11% to the Medicare conversion factor. According to a Healthcare Dive report, the specialties that will see decrease in Medicare payments compared with 2020 rates include:

  • Cardiac surgery and physical therapy by 9%
  • Anesthesiology and thoracic surgery by 8%
  • Vascular surgery, general surgery and neurosurgery by 7%
  • Emergency medicine and ophthalmology by 6

According to Fierce Healthcare, the AMA strongly advocates waiving the federal budget neutrality requirement as pay cuts would badly affect physicians already under significant economic hardship due to COVID-19.

CMS will accept comments on the proposed rule through October 5, 2020.

Medical billing companies with a solid track record keep track of such industry developments, including updates to billing and coding, to help physicians report their services accurately to insurance companies.