On August 3, 2020, the Centers for Medicare and Medicaid Services (“CMS”) issued its calendar year ("CY") 2021 Physician Fee Schedule ("PFS") proposed rule and is soliciting public comments on proposed policy changes for Medicare payments under the PFS. Public comments are due by October 5, 2020.
Below, we highlight proposed updates to Evaluation and Management (“E&M”) services and Telehealth, as well as the proposed eleven percent (11%) reduction to the conversion factor for CY 2021.
Coding Framework and Valuation of Office/Outpatient E&M Visit Codes
CMS proposed to adopt E&M visit coding and documentation changes laid out by the American Medical Association’s (“AMA”) CPT Editorial Panel for office/outpatient E&M visits beginning January 1, 2021. Under the new coding framework, selection of office/outpatient E&M levels 2 - 5 will be based on either the level of Medical Decision Making (“MDM”) utilizing the modified AMA table or the total time personally spent by the practitioner on the day of the visit including face-to-face and non-face-to-face time.
Relaxing documentation requirements surrounding history and physical exam shifts the emphasis to the physician’s MDM, assigning greater importance to their cognitive efforts. The proposed modifications to the criteria for MDM will require education and providers should expect a learning curve. Though change is welcome, the timing may present a challenge in light of the Public Health Emergency (“PHE”).
Further, as part of the 2020 PFS Final Rule, CMS previously finalized the following changes effective beginning January 1, 2021:
Increasing valuation for CPT codes 99202 – 99215.
Relative Value Units (“RVUs”) assigned to two (2) add-on codes.
A new office/outpatient E&M prolonged visit CPT code 99XXX as well as the new HCPCS code GPC1X which provides additional payment for visit complexity compensable under the MPFS beginning January 1, 2021.
Revaluing Services Analogous to Office/Outpatient E&M Visits
There are many services, other than global surgical codes, for which valuation of the CPT/HCPCS code was closely tied to the values of the office/outpatient E&M visit codes. Some of those services were originally valued utilizing a building block methodology and have office/outpatient E&M visits explicitly built into their definition or valuation. Other services do not include an E&M visit, however, were valued using a direct crosswalk to the RVUs assigned to office/outpatient visits.
Due to the magnitude of changes to the values of the office/outpatient E&M codes and the associated redefinitions, CMS is proposing assessment and changes be made to the values of services containing, or closely analogous to, office/outpatient E&M visits to include services in the following code sets: Emergency Department Visits, Therapy Evaluations, Behavioral Healthcare Services, Maternity Service packages, Preventive Services, Care Management Services and End Stage Renal Disease Services.
Telehealth and Other Services Involving Communications Technology
To minimize financial exposure as a result of COVID-19 during the PHE, CMS has instituted 1135 waivers and interim rules to facilitate continued access by the Medicare beneficiaries to healthcare services. The Medicare 2021 PFS Proposed Rule has categorized CPT codes for temporary and permanent inclusion under the PFS list of telehealth services but does not embody the flexibilities that profoundly altered telehealth during the PHE.
As such, CMS will return to the policies established through regular notice and comment rulemaking processes and the following interim flexibilities will expire at the end of the PHE due to limitations by the requirements of section 1834(m) of Act:
Geographic and site of service restrictions allowing the patient’s home to serve as an originating site (with the exception of previously established substance use disorder or co-occurring mental health disorder telehealth);
Expansion of the types of practitioners on the statutory list of eligible distant site practitioners;
Waiver of the requirement that telehealth services be furnished using interactive telecommunications systems that include two-way, audio video communication technology allowing certain telehealth services to be furnished via audio-only technology;
The March 31st and May 1st COVID-19 interim final rules established separate payment for audio-only telephone E&M services reported with CPTs 99441-99493 with established new RVUs based on crosswalks to the most analogous office/outpatient E&M codes based on the time requirements for the telephone codes. CMS is not proposing to continue to recognize these codes for payment under PFS after the conclusion of the PHE.
Virtual check-in services, online assessments and other communication technology-based services which can be furnished via telecommunications technology are not considered telehealth services. CMS is proposing to permanently adopt a policy allowing some remote communication technology services to be billed by providers such as physical therapists, occupational therapists and speech language pathologists who are not otherwise eligible to render telehealth outside of the COVID-19 PHE.
CMS clarifies in the proposed rule when audio/video technology is used in furnishing a service where both the beneficiary and the practitioner are in the same institutional or office setting, then the practitioner should bill for the service as if it was furnished in person and is not subject to any telehealth requirements.
Proposed Reduction to Conversion Factor
A significant reduction in the conversion factor will impact practitioners differently based on specialty. The reduction is related to adjustments of practice expense as contained in the RVU calculation, along with the third year implementation of a market-based supply and equipment pricing update, as well as refinements to the malpractice expense and geographic practice cost indices. CMS also completed a “mis-valued” code initiative which revised RVU’s for specific codes, increasing value for particular services following the recommendations from the AMA’s Relative Value Scale Update Committee (RUC) and CMS review and the continuing implementation of the adjustment to indirect PE allocation for some office-based services.
Due to these changes to the RVU’s, and to maintain budget neutrality, the conversion factor is decreasing by $3.83 from CY2020 or $36.09 to $32.26. According to CMS, the adjustment reallocates Medicare payments benefiting general practitioners largely attributable to an increase in valuation for office/outpatient E/M visits which constitute 20% of the total spending. For nephrologists, ESRD monthly capitation payments increased because of the office/outpatient E/M visits explicitly included in their valuation.
Specialties that will experience a decrease include radiology, nurse anesthetists, pathology, and cardiac surgery largely attributable to the redistribution of previously finalized changes to the office/outpatient E/M visits taking effect in 2021. These decreases are also due to the revaluation of individual procedures reviewed by the AMA’s RUC and CMS, as well as decreased payments as a result of continuing implementation of the previously finalized updates to supply and equipment pricing.