A View into Proposed Medicare PFS and Policy Changes for 2021

The Centers for Medicare & Medicaid Services (CMS) in the past week has proposed Medicare payment rules for outpatient services and physicians for 2021 and finalized payment rules for inpatient rehabilitation facilities (IRFs) and psychiatric facilities.

Looking specifically at the 2021 Physician Fee Schedule (PFS) proposed rule, scheduled to be published Aug. 17, it had some surprises, as the Budget Neutrality Act was ignored in the COVID-19 public health emergency (PHE) with all of the flexibilities and monies pushed out for telehealth, makeshift hospitals without walls, and added providers. Now, the “real rules” and laws must be held up, or the Medicare Trust Fund could find its way into running out of money by 2026, according to a Medicare Trustees report.

So, what is on the horizon under the 2021 PFS, keeping in mind that CMS has to really rewrite this reimbursement playbook, in light of a pandemic and planning for a post-pandemic environment?

As first published Aug. 3 on the CMS Newsroom Fact Sheet:
The proposed PFS conversion factor for 2021 is $32.26, down from $36.09 in 2020; that is a drop of close to 11 percent. The CF (conversion factor) is the multiplier used against the RVUs (Relative Value Units) to determine the price allowable for a medical service.

So even though the RVUs may increase, as we have been told they will, the CF is proposed to decrease significantly. A good example would be an evaluation and management (E&M) visit for a new patient, office visit code 99204, which is currently (2020 PFS) allowed at $167.09. If the new PFS passes, this would decrease to $159.37. The Level 5 new patient visit would see a 2-percent decrease as well, but there are significant increases for established patient visits, to the tune of about 12 percent, on average, so there is a plus there.

CMS also proposed adding several services to the Medicare telehealth services list during the PHE for the COVID-19 pandemic, including home visits for established patients and psychological and neuropsychological testing.

Just to clarify on the “home visits” – these are home health agency providers that see patients at home, versus a telehealth visit for a patient who regularly sees their physician in person, but today, their encounter is being delivered via telehealth. For now, that is still an office visit under the proposal. I would anticipate payment parity rules to be rolled back or adjusted, to encourage patients, once it is safe to return to in-person care, to go and physically see their physician, and to recognize that the value of an in-person visit should be higher than the telehealth option for like services.

Just an example of how a telehealth visit can severely fail a patient hit home personally recently. My father-in-law had what he thought was a rash on his inner thigh back in March but was told to stay home and try a telehealth option with his primary care physician, in order to maintain quarantine and to lessen the potential spread of COVID-19, and his exposure to it. Makes sense, right?

Well, his physician was only able to speak to him on the phone at first, so there was a “virtual check-in” with no audio and video capability. Based on the patient relaying information, the physician prescribed a topical cream to deal with this “rash.” After about a month, it did not work, and appeared to be getting worse. Around late April, he started to experience oozing in the same area, in what just looked like a “sore to him,” from scratching the area. This went on for another month, and finally, I looked at it and said, “dad, you need to go to the doctor; I think you may have something else going on” – and I had I feeling I knew what it was. His physician was still only available via telehealth, and he was set up for an audio and video visit, wherein the connection was not great, but still, there was some visual capabilities. Yet again, he was told to wait and tolerate it, and it should go away.

In late June, I insisted he see another physician, a general surgeon, in person – and sure enough, he was diagnosed with Hodgkin lymphoma and had to have lifesaving surgery last month to remove a tumor that had risen to the surface of his skin and was about the size of a golf ball. He is 92 years old. Think about how long he waited to have that diagnosed correctly, because of the telehealth limitations, even with audio and visual capabilities. Patients are being put in a position to make uneducated assessments and relating it to their physicians via telehealth. My concern here is real.

CMS Administrator Seema Verma tweeted out on Tuesday that “CMS is seeking public input on telehealth and other services to permanently add to the telehealth list beyond the PHE, in order to give clinicians and patients time as they get ready to provide in-person care again.” She went on to say that “telemedicine can never fully replace in-person care, but it can complement and enhance in-person care by increasing access and choices for American seniors.” This needs to be taken seriously.

The agency also proposed adding the following services to the list of Medicare telehealth services on a Category 1 basis, because the services are similar to those already on the list:

• Visit complexity associated with certain office/outpatient E&M (this would be that extra HCPCS code added to an E&M encounter in 2021 for complexity GPC1X)
• Prolonged services (time-based)
• Group psychotherapy
• Neurobehavioral status exam
• Care planning for patients with cognitive impairment
• Domiciliary, rest, home, or custodial care services
• Home visits – agency providers

The changes to telehealth services under the proposed rule are relatively modest and align with the expectations that Verma has been establishing over the past two months. CMS’s main objective continues to be an expansion of telehealth services. And the permanent coverage of certain E&M visits and the extension of some ED-based E&M visits to the end of 2021 are consistent with that objective. It is reasonable to expect a similarly measured expansion of telehealth services going forward. 

However, and this is important to note, CMS singled out one specific service that it does not plan to continue, but on which it is soliciting input: audio-only visits.

CMS has allowed these visits during the PHE as a means of providing telehealth access to patients who lacked the technology for an audio-video virtual visit. They are billed under the phone call CPT codes, 99441-99443, and are time-based, or under the virtual check-in code G2012.

However, discontinuing coverage of audio-only visits would run contrary to recent trends at the state level. In June, New York added audio-only visits as approved telehealth services for participants in the state-administered Medicaid and Children’s Health Insurance Program (CHIP) programs. And in July, New Hampshire included audio-only visits in its permanent extension of emergency telehealth measures.

Both states pointed to a lack of access to video technology among underserved populations as motivation for keeping audio-only telehealth. But these states, in the CMS discussion, have not provided evidence-based medicine and clinical outcomes to address clinical value, quality of care, or how frequently these visits should be allowed. Per CPT, there is a once-per-seven–days rule.

CMS has acknowledged that audio-only visits do have value for patients. The agency even provided a specific example in the fact sheet on the proposed rule: patients who need to get care but want to avoid potential exposure to COVID-19 in a clinical setting.

However, as with many clinicians whom Advisory Board researchers talk to, CMS seems uncertain of the clinical value of an audio-only visit. There are obvious limitations to the kind of examination possible in an audio-only interaction. The audio and video visit has limitations as well. Therefore, CMS is soliciting input on adding audio-only codes for visits that are more extensive than existing virtual check-ins and phone calls, and whether such services should be extended for up to a year past the end of the PHE or on a permanent basis. CMS does not want to see this as a replacement for in-person care, or over-utilization based on convenience, versus good clinical assessments, judgments, and outcomes.

CMS proposed a refinement to clarify the times when prolonged office and outpatient E&M visits can be reported. The 2021 E&M rules for time-based capture will have a range of time thresholds to be met to support a code, and the prolonged care codes for 2021 could be added to those codes, if the base code first meets its time threshold.

Under the proposal, the implementation of Merit-based Incentive Payment System (MIPS) Value Pathways would be delayed until at least 2022 due to the COVID-19 pandemic.

Now that the proposed 2021 PFS is out, many specialty societies have contacted CMS, including the American Association of Orthopaedic Surgeons (AAOS), which has urged CMS to reconsider its Medicare PFS rule for 2021, which outlines significant cuts to reimbursement rates for orthopedic surgical services, among other specialties.

Under the rule, payments for orthopedic surgical services would be decreased by about 5 percent. Also, CMS plans to reduce the RVUs to physicians for hip and knee replacements by an additional 5.4 percent.

AAOS President Joseph Bosco, MD, said the society is “extremely disappointed” at CMS’s decision to move forward with these cuts, after AAOS provided data and engaged in several discussions with them.

The American College of Surgeons has similar concerns, saying that CMS’s proposed cuts would worsen the financial strain on practices already struggling with the economic blow caused by the COVID-19 pandemic and decreased access to surgery for senior citizens.

Due to the potential impact of this proposal, many specialty associations are calling on Congress to intervene, and suspend budget neutrality requirements in the Medicare Physician Fee Schedule – and act to prevent physicians who rarely bill for E&M services from bearing the costs of increasing E&M payments to others.

In addition, CMS proposed extending a change the administration made under the PHE declaration to federal rules regarding clinician supervision. CMS noted that it temporarily revised the regulatory definition of direct supervision to include instances when a supervising physician or practitioner is overseeing other clinicians via interactive audio/video real-time communications technologies.

For example, CMS under the proposal would allow certified nurse midwives (CNMs), clinical nurse specialists (CNSs), nurse practitioners (NPs), and physician assistants (PAs) – in addition to physicians – to supervise the administration of diagnostic tests within their state scope of practice and in accordance with applicable state laws, as long as they maintain required relationships with collaborating or supervising physicians. The agency, under the proposed rule, would keep that revision in place through Dec. 31, 2021. CMS is seeking public comment on whether it should impose “any guardrails” on that policy or consider extending it further. Oversight has been lacking during the PHE, and CMS is now realizing that for any final implementation, restrictions not only for the protection of the patient, but for the integrity of the clinical outcomes and documentation, is needed.

CMS under the proposed rule also would extend some policies implemented under the PHE declaration that relate to services furnished by pharmacists and physical therapists, as well as certain flexibilities related to medical record reviews and verification. In addition, CMS is seeking public comment on whether to extend some flexibilities regarding Medicare payments for services provided by teaching physicians.

Remember, all of us are stakeholders when it comes to Medicare reimbursement, rules, and regulations, and it is imperative that you have your voice heard here. You have until Oct. 5 to send in a comment or concern, or even to express your agreement to the proposed rule. You can go online to www.regulations.gov and follow the “Submit a Comment” instructions.

Many Part A and Part B providers are looking at reimbursements now, and in the short term, but CMS has to plan also for the long term – and the viability of the Medicare Trust Fund for years to come.
If you want to read the 1,353-page proposed rule, here is the link: https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-17127.pdf