CMS Releases Final Physician Fee Schedule Rule for Calendar Year 2021

December 10, 2020

On Dec. 1, the Centers for Medicare & Medicaid Services (CMS) released the annual Physician Fee Schedule (PFS) final rule that includes updates on policy changes for Medicare payments under the Physician Fee Schedule (PFS), and other Medicare Part B issues, on or after Jan. 1, 2021. Below are some of the highlights of this year’s final rule.
Conversion Factor
In comments to CMS on the proposed PFS rule, both the Wisconsin Hospital Association (WHA) and American Hospital Association (AHA) urged CMS not to impose the significant cut in the PFS conversion factor. However, CMS maintained this cut in the final rule. The final 2021 PFS conversion factor is $32.41, a decrease of $3.68 from the 2020 conversion factor of $36.09.  This represents a net decrease in the conversion factor of 10.20% in calendar year CY 2021. The PFS conversion factor reflects the statutory update of 0% and the budget-neutrality adjustment, as required by law, necessary to account for changes in relative value units and expenditures that would result from finalized policies. This decrease in the conversion factor, coupled with increased reimbursement for primary care and chronic disease management, has resulted in payment cuts to certain specialties to maintain budget neutrality. 
Under the final rule, CMS increased reimbursement for primary care and chronic disease management services, including many services that are similar to evaluation and management office visits such as maternity care bundles, emergency department visits, end-stage renal disease capitated payment bundles and physical and occupational therapy evaluation services.  
The services for which reimbursement is decreased to maintain budget neutrality include reimbursement for chiropractors, nurse anesthetists and anesthesia assistants, and radiologists, who all saw their reimbursement drop by 10%, while pathologists and physical and occupational therapists received a 9% cut. Anesthesiologists, cardiac surgeons, interventional radiologists, nuclear medicine physicians and thoracic surgeons all received an 8% pay cut.
Since the beginning of the public health emergency for COVID-19, CMS has added 144 telehealth services such as emergency department visits, initial inpatient and nursing facility visits, and discharge day management services, that are covered by Medicare through the end of the public health emergency. In this final rule, CMS is adding more than 60 services to the Medicare telehealth list that will continue to be covered beyond the end of the public health emergency (PHE), and CMS will continue to gather more data and evaluate whether more services should be added in the future. Category 1 services are added permanently; newly-created Category 3 service were added during the PHE for COVID-19  for which there is likely to be clinical benefit when furnished via telehealth, but for which there is not yet sufficient evidence available to consider the services as permanent additions. New Category 1 telehealth codes can be found here;  new Category 3 telehealth codes may be found here.
Several other changes were made in the rule regarding delivery of telehealth services, including a clarification that licensed clinical social workers, clinical psychologists, physical therapists, occupational therapists and speech-language pathologists can furnish brief online assessment and management services as well as virtual check-ins and remote evaluation services.

Quality Payment Program
  • Merit-Based Incentive Payment System (MIPS) Alternative Payment Model (APM) Performance PathwayOne of the more significant changes in the rule’s Quality Payment Program (QPP) provisions is creating a new MIPS APM Performance Pathway (APP). For (CY) 2021, CMS will sunset the MIPS APM scoring standard and replace it with the MIPS APP. To qualify for the APP, clinicians and groups will be required to report on a common set of six quality measures reflecting patient experience, diabetes control, depression screening and hospital admissions and readmissions. This requirement will apply to APP participants regardless of the APM model in which they participate, although WHA opposed provision in our comments to CMS, stating that requiring all MIPS APMs to report on the same six quality measures would be a misguided, “one size fits all” policy that fails to improve upon current policy.
  • Category Weights – For the CY 2021 performance period, CMS will lower the weight of the quality category to 40% and raise the weight of the cost category to 20%. By law, the cost and quality categories must be weighted equally (i.e., 30% each) starting with the CY 2022 performance period.
  • MIPS Value Pathways (MVPs) – Last year, CMS adopted a framework for MVPs. Built over time, MVPs would organize the reporting requirements for each MIPS category around specific specialties (e.g., ophthalmology), treatments (e.g., major surgery) or other priorities (e.g., preventive health). CMS intended to propose specific MVPs in this rule to implement starting in CY 2021. WHA is pleased to note that CMS has deferred the proposals in light of the COVID-19 pandemic.
Medicare Shared Savings Program (MSSP)
  • Quality Measures – CMS finalizes its proposal to require accountable care organizations (ACOs) to report the same six measures used in the new MIPS APP (described above under the QPP). However, ACOs will not be required to report the MIPS APP measures until the CY 2022 performance year. For the CY 2021 performance year, ACOs will have the option of reporting either the MIPS APP measure set or the MSSP’s current measures.
  • Web Interface Reporting Option – As recommended by WHA, CMS will retain the CMS web interface reporting option for CY 2021 to allow ACOs to report the current MSSP measure set if they opt to do so.
  • Extreme and Uncontrollable Circumstances – CMS notes that the MSSP extreme and uncontrollable circumstances policy applies for the CY 2020 performance period due to the COVID-19 pandemic. As a result, CMS is waiving the requirement to field the Consumer Assessment of Healthcare Providers and Systems (CAHPS) survey and will grant all ACOs full credit for the CAHPS measures. In addition, the reporting of other quality measure data is optional for 2020.
For further information on the PFS final rule for CY 2021, contact WHA’s VP for Policy Development Laura Rose.

This story originally appeared in the December 10, 2020 edition of WHA Newsletter