CMS Releases 2021 MPFS and QPP Updates

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Recently, the Centers for Medicare and Medicaid Services (CMS) published the final 2021 updates for the Medicare Physician Fee Schedule (MPFS) and Quality Payment Program (QPP) finalizing expansion of certain telehealth services in Medicare and evaluation and management (E/M) payment redistribution. CMS uses the MPFS to update reimbursement for physician and supplier services within the Medicare program annually, and payments are based on the relative resources typically used to furnish the service. This year’s fee schedule also makes policy changes based on temporary policies adopted for the COVID-19 pandemic, making some of those deemed successful permanent.

E/M Updates and Impact

The administration has increased payment for evaluation and management (E/M) visits — which make up 20 percent of the spending under the Physician Fee Schedule — while reducing pay for other services due to budget neutrality requirements. CMS noted that the final E/M payment increases were informed by recommendations from the American Medical Association to recognize the time clinicians devote to care coordination, especially for patients with chronic conditions.

Some specialties saw big bumps in reimbursement in this year’s proposed physician fee schedule, while others fell victim to large cuts due to the “redistributive effects” of CMS’s E/M policy. The substantial changes in reimbursement are likely to renew calls from stakeholders for Congress to waive budget neutrality requirements, as many argue that they lead to significant disparities in impact among physician subspecialties. Under the final rule, radiologists faced the largest cuts, followed by physical and occupational therapy, pathology, anesthesiology, physicians assistants, and others.

CMS also finalized proposals to increase the value of many services that are comparable to or include office, outpatient, and E/M visits, such as maternity care bundles, emergency department visits, end-stage renal disease capitated payment bundles, physical and occupational therapy evaluation services and others. Finally, CMS also simplified the coding and billing requirements for E/M office visits in collaboration the AMA, which is expected to save clinicians 2.3 million hours per year once it goes into effect January 1, 2021.

Many outlets have reported concerns, especially from surgical groups, regarding the E/M policy. However, stakeholders have also expressed support for the CMS final rule, including this recent statement from a collection of medical specialty societies:

“As organizations collectively representing hundreds of thousands of physicians currently on the frontlines treating patients during the COVID-19 pandemic, we applaud CMS for moving forward with implementing the AMA-RUC recommended increases to the values for traditionally undervalued outpatient Evaluation and Management services on January 1. Our members provide comprehensive primary and specialty care, mental health and/or preventive care to millions of Medicare beneficiaries, and these long-overdue payment changes are critical for preserving patients’ access to these critical services. We are pleased to see that in finalizing the 2021 Medicare Physician Fee Schedule the agency decided to move forward without delay given how important these increases are, especially during a global pandemic.”


The final MPFS also includes several policies to extend or make permanent certain policies to support expanded coverage of telehealth services and remote monitoring beyond the COVID-19 public health emergency (PHE). Examples include adding services to the Medicare list of covered telehealth services, finalizing new payment codes for virtual services such as a longer audio-only virtual check-in, modifying certain frequency limitations and other requirements associated with particular services furnished via telecommunications technology, and clarifying payment rules applicable to other services.

Statutory limitations prevent CMS from making changes to some of the most restrictive telehealth coverage requirements (including those that prevent Medicare reimbursement for telehealth services furnished to beneficiaries in urban areas or in their homes), several policies in the Final Rule build upon and clarify coverage of other virtual services, such as remote physiologic monitoring. The ongoing expansion of coverage of remote services, paired with new exceptions and safe harbors in the regulations recently released in connection with HHS’s Regulatory Sprint to Coordinated Care, will allow for innovative uses of telecommunications technology to better support patients throughout the care continuum even after the COVID-19 PHE ends.

Temporary and Permanent Additions to the Medicare Telehealth Services List

Before the COVID-19 PHE, Medicare only covered certain services furnished via telehealth, including (1) professional consultations, (2) office medical visits, (3) office psychiatry services, and (4) any additional service specified by the HHS Secretary when furnished via an interactive telecommunications system. These services are all included on a list that is amended and published annually in the MPFS (the Medicare Telehealth List).

CMS finalized the permanent addition of the following services that were all proposed to be added to the Medicare Telehealth List on a Category 1 basis. This means that these services are similar to the professional consultations, office visits, and office psychiatry services that are already covered on the list.

  • Group Psychotherapy (90853)
  • Neurobehavioral Status Exam (96121)
  • Care Planning for Patients with Cognitive Impairment (99483)
  • Domiciliary, Rest Home, or Custodial Care Services, Established Patients (99334-99335)
  • Domiciliary, Rest Home, or Custodial Care services (99335)
  • Home Visits, Established Patient (99437 and 99438)
  • Visit Complexity Inherent to Certain Office/Outpatient E/Ms (HCPCS code G2211)
  • Prolonged Services (HCPCS code G2212)

CMS also finalized extending the addition of several services temporarily added to the Medicare Telehealth List during the COVID-19 PHE. On a newly created Category 3 basis, the following list of services will be temporarily added through the end of the calendar year in which the PHE ends:

  • Domiciliary, Rest Home, or Custodial Care Services, Established Patients (99336, 99337)
  • Home Visits, Established Patient (99349, 99350)
  • Emergency Department Visits, Levels 1-5 (99281-99385)
  • Nursing Facilities Discharge Day Management (99315, 99316)
  • Psychological and Neuropsychological Testing (96130-96133, 96136-96139)
  • Psychological and Neuropsychological Testing (CPT codes 96130-96133; CPT codes 96136-96139)
  • Therapy Services, Physical and Occupational Therapy, All levels (CPT codes 97161-97168; CPT codes 97110, 97112, 97116, 97535, 97750, 97755, 97760, 97761, 92521-92524, 92507)
  • Hospital Discharge Day Management (CPT codes 99238-99239)
  • Inpatient Neonatal and Pediatric Critical Care, Subsequent (CPT codes 99469, 99472, 99476)
  • Continuing Neonatal Intensive Care Services (CPT codes 99478-99480)
  • Critical Care Services (CPT codes 99291-99292)
  • End-Stage Renal Disease Monthly Capitation Payment codes (CPT codes 90952, 90953, 90956, 90959, 90962)
  • Subsequent Observation and Observation Discharge Day Management (CPT codes 99217, 99224-99226)

Audio-only Virtual Check-ins

CMS has received substantial positive feedback regarding the audio-only telephone (E/M) services that were established on a temporary basis during the COVID-19 PHE. While CMS did not find it consistent with Section 1834(m) Medicare telehealth coverage requirements to finalize codes for audio-only E/M telehealth services beyond the PHE, CMS instead established payment on an interim final basis for a new HCPCS code G2252 describing 11-20 minutes of medical discussion to determine the medical necessity of an in-person visit.  This new code will allow audio-only interactions to be used for a longer medical discussion to determine the necessity of an in-person visit.

Remote Physiologic Monitoring (RPM) Services

In the Final Rule, CMS clarified existing payment policies related to RPM services represented by CPT codes 99453, 99454, 99091, 99457, and 99458, and made permanent two temporary COVID-19-related modifications to RPM services. CMS finalized as a permanent policy the temporary COVID-19-related flexibility that a beneficiary’s consent to receive RPM services may be obtained at the time of the services. While CMS has allowed RPM services to be furnished to new patients in response to the COVID-19 PHE, the Final Rule clarifies that once the PHE ends, RPM services may only be furnished to patients with an established physician-patient relationship.

Smart Phones as Interactive Telecommunication Systems

CMS finalized a technical amendment to existing Medicare telehealth regulations at 42 CFR § 410.78(a)(3) to remove the language that provides that “[t]elephones, facsimile machines, and electronic mail systems do not meet the definition of an interactive telecommunication system.” Under the Final Rule, the revised definition of “interactive telecommunication systems” will mean any “multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication.” This is designed to remove outdated references to specific technology to resolve confusion, and confirm that equipment such as smart phones may qualify as an interactive telecommunication system for purposes of satisfying Medicare coverage requirements for telehealth services, even though such equipment may be used as a telephone.

Quality Payment Program

CMS did not finalize a pair of proposals to update performance incentive programs for the COVID-19 pandemic. While the agency had proposed to lower the performance threshold for performance period 2021 to 50 points, it is not finalizing the proposal and the threshold will remain 60 points. Additionally, the agency did not finalize a proposal to use performance period benchmarks to score quality measures for 2021 and will instead use historical benchmarks.

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