2021 Medicare Physician Fee Schedule Update: What Providers Need to Know

January 2021

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CMS has announced changes to the physician fee schedule for 2021.


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On December 2, 2020, the Centers for Medicare and Medicaid Services (CMS) published its final rules for the Part B fee schedule, referred to as the Physician Fee Schedule (PFS). Substantial changes were made, with some providers benefiting more than others, and a number of specialties had a significantly negative impact.

However, President Trump’s signing of the Omnibus and COVID Relief bill on December 27, 2020, has alleviated much of the negative changes to physician reimbursement. Though our healthcare system is still grappling with the COVID-19 pandemic, it is crucial providers stay abreast of updates to payment regulations and rates.

Here’s what all Part B providers need to know about changes to the annual fee schedule updates:
 

Snapshot of Fee Schedule Updates

Calculation Updates

CMS uses a formula to derive the annual physician fee schedules and the “work-time” relative value units have increased significantly for select evaluation and management codes (e.g. office visits). These now reflect a global period related to office visits, including incremental calls and prescription refill times. In order for this change to be revenue neutral, a known regulatory challenge, CMS had to reduce the “conversion factor” significantly. However, with the signing of the Omnibus and Covid Relief bill, this issue has significantly been reduced while maintaining the other, positive changes made to office visit reimbursement levels.


 

Evaluation and Management (E/M) Office Visits Coding Updates

On Nov. 1, 2019, CMS finalized revisions to the evaluation and management (E/M) office visit CPT codes 99201-99215. These revisions will go into effect on Jan. 1, 2021. They build on the goals of CMS and providers to reduce administrative burden and put “patients over paperwork” thereby improving the health system.


 

Medicare Telehealth

In the 2021 Final Rule, CMS made additions to the telehealth services offered and continued the list of services available in response to the ongoing COVID-19 public health emergency (PHE).


 

Quality Payment Program (QPP)

2020 has been a difficult year for virtually all providers. With that in mind, CMS has provided an extension for the “extreme and uncontrollable circumstances exception” until February 21, 2021. QPP was a result of the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015, which represents CMS’s move towards a value-based reimbursement program. As a result, depending on physician performance within this program, Medicare reimbursements can be enhanced or penalized by up to 9%, although there is a two-year delay in this application (e.g. provider performance in 2021 will lead to the enhancement or penalty in 2023).


 

Calculation Updates

Conversion Factor: The 2021 conversion factor (CF) had originally been set at $32.41, which was a decrease of 10% or $3.68 from the CY 2020 PFS CF of $36.09. This change was necessary due to the re-evaluation of the work relative value units (RVUs) for evaluation and management services. Due to the passage of the Omnibus and COVID Relief bill on December 27, 2020, the conversion factor has been readjusted to $34.89.

Work Relative Value Units (wRVU) Re-evaluation: In collaboration with guidance from the American Medical Association (AMA), CMS has updated evaluation and management (E&M) services. The “work time” for these services was updated to more accurately reflect the minimum time providers devoted to each service in order to consider non-face-to-face duties and care-coordination activities.

The following exhibit has been prepared by the American Medical Society (AMA) and reflects their estimates to the impact of the various specialties using CMS claims data:
 
Specialty

Allowed Charges (mil)
(as displayed in CY2021 MPFS Final Rule)

CY2021 MPFS Final Rule Combined Impact Legislative Impact – CY2021 Combined Impact without G2211 in CF & with an additional 3.75% CF Increase
Allergy/Immunology $247 9% 10%
Anesthesiology $2,020 -8% -2%
Audiologist $75 -6% 0%
Cardiac Surgery $266 -8% -2%
Cardiology $6,871 1% 3%
Chiropractor $765 -10% -4%
Clinical Psychologist $832 0% 7%
Clinical Social Worker $857 1% 8%
Colon And Rectal Surgery $168 -5% 1%
Critical Care $378 -7% -1%
Dermatology $3,767 -1% 5%
Diagnostic Testing Facility $748 -3% 3%
Emergency Medicine $3,077 -6% 0%
Endocrinology $508 16% 13%
Family Medicine $6,020 13% 11%
Gastroenterology $1,757 -4% 2%
General Practice $412 7% 8%
General Surgery $2,057 -6% 0%
Geriatrics $192 3% 5%
Hand Surgery $246 -3% 3%
Hematology/Oncology $1,707 14% 13%
Independent Laboratory $645 -5% 1%
Infectious Disease $656 -4% 0%
Internal Medicine $10,730 4% 6%
Interventional Pain Mgmt $936 7% 8%
Interventional Radiology $499 -8% -2%
Multispecialty Clinic/Other Phys $153 -3% 3%
Nephrology $2,225 6% 11%
Neurology $1,522 6% 7%
Neurosurgery $811 -6% 0%
Nuclear Medicine $56 -8% -2%
Nurse Anes / Anes Asst $1,321 -10% -4%
Nurse Practitioner $5,100 7% 8%
Obstetrics/Gynecology $636 7% 8%
Ophthalmology $5,343 -6% 0%
Optometry $1,359 -4% 2%
Oral/Maxillofacial Surgery $79 -4% 2%
Orthopedic Surgery $3,812 -4% 2%
Other $48 -5% 1%
Otolarngology $1,271 7% 8%
Pathology $1,265 -9% -3%
Pediatrics $67 6% 7%
Physical Medicine $1,164 -3% 3%
Physical/Occupational Therapy $4,973 -9% -3%
Physician Assistant $2,901 8% 9%
Plastic Surgery $382 -7% -1%
Podiatry $2,133 -1% 5%
Portable X-Ray Supplier $95 -6% 0%
Psychiatry $1,112 7% 8%
Pulmonary Disease $1,654 1% 3%
"Radiation Oncology And Radiation
Therapy Centers"
$1,809 -5% 1%
Radiology $5,275 -10% -4%
Rheumatology $548 15% 13%
Thoracic Surgery $352 -8% -2%
Urology $1,810 8% 9%
Vascular Surgery $1,293 -6% 0%
Total $97,008 0% 4%

* Column F may not equal the sum of columns C, D and E due to rounding.
 
CPT
 




 
MOD Description 2020 wRVU Final 2021 wRVU 2020 Medicare Calculation (w/o GPCI) 2021 Medicare Calculation (w/o GPCI) Medicare Calculated Fee % change
11042   Deb subq tissue 20 sq cm/< 1.01 1.01 $128.84 $135.73 5%
11721   Debride nail 6 or more 0.54 0.54 $46.56 $45.71 -2%
12032   Intmd rpr s/a/t/ext 2.6-7.5 2.52 2.52 $310.01 $318.57 3%
20610   Drain/inj joint/bursa w/o us 0.79 0.79 $63.88 $65.95 3%
22551   Neck spine fuse&remov bel c2 25.00 25.00 $1,782.10 $1,762.80 -1%
25609   Treat fx radial 3+ frag 14.38 14.38 $1,092.07 $1,083.43 -1%
27130   Total hip arthroplasty 20.72 19.60 $1,415.07 $1,323.84 -6%
27447   Total knee arthroplasty 20.72 19.60 $1,413.27 $1,322.45 -6%
31500   Insert emergency airway 3.00 3.00 $149.41 $144.81 -3%
33405   Replacement aortic valve opn 41.32 41.32 $2,373.25 $2,328.42 -2%
33533   Cabg arterial single 33.75 33.75 $1,955.70 $1,920.52 -2%
36561   Insert tunneled cv cath 5.79 5.79 $1,104.70 $1,132.28 2%
36903   Intro cath dialysis circuit 6.39 6.39 $5,280.99 $5,288.40 0%
37225   Fem/popl revas w/ather 11.75 11.75 $11,581.87 $1,343.05 -2%
37227   Fem/popl revasc stnt & ather 14.25 14.25 $14,891.29 $14,524.95 -2%
45380   Colonoscopy and biopsy 3.56 3.56 $437.77 $467.57 7%
45385   Colonoscopy w/lesion removal 4.57 4.57 $457.26 $483.62 6%
47562   Laparoscopic cholecystectomy 10.47 10.47 $692.56 $685.30 -1%
50360   Transplantation of kidney 39.88 39.88 $2,538.54 $2,508.46 -1%
52000   Cystoscopy 1.53 1.53 $216.18 $252.28 17%
55700   Biopsy of prostate 2.50 2.50 $255.88 $266.23 4%
59400   Obstetrical care 32.16 36.58 $2,220.59 $2,512.65 13%
63047   Remove spine lamina 1 lmbr 15.37 15.37 $1,151.26 $1,145.19 -1%
64483   Inj foramen epidural l/s 1.90 1.90 $242.88 $263.09 8%
64493   Inj paravert f jnt l/s 1 lev 1.52 1.52 $177.92 $187.72 6%
64635   Destroy lumb/sac facet jnt 3.78 3.78 $426.22 $446.28 5%
64721   Carpal tunnel surgery 4.97 4.97 $452.56 $457.10 1%
66982   Xcapsl ctrc rmvl cplx wo ecp 10.25 10.25 $765.10 $749.15 -2%
66984   Xcapsl ctrc rmvl w/o ecp 7.35 7.35 $557.58 $547.12 -2%
74176   Ct abd & pelvis w/o contrast 1.74 1.74 $203.18 $202.73 0%
74176 26 Ct abd & pelvis w/o contrast 1.74 1.74 $89.14 $84.79 -5%
74177   Ct abd & pelv w/contrast 1.82 1.82 $332.39 $344.74 4%
74177 26 Ct abd & pelv w/contrast 1.82 1.82 $93.47 $88.98 -5%
78452   Ht muscle image spect mult 1.62 1.62 $484.68 $505.60 4%
78452 26 Ht muscle image spect mult 1.62 1.62 $80.84 $78.86 -2%
78815 26 Pet image w/ct skull-thigh 2.44 2.44 $121.62 $116.19 -4%
88305   Tissue exam by pathologist 0.75 0.75 $71.46 $71.88 1%
88307   Tissue exam by pathologist 1.59 1.59 $281.50 $293.80 4%
88342   Immunohisto antb 1st stain 0.70 0.70 $107.19 $107.47 0%
90792   Psych diag eval w/med srvcs 3.25 4.16 $160.96 $202.73 26%
90833   Psytx w pt w e/m 30 min 1.50 1.50 $72.90 $72.23 -1%
92928   Prq card stent w/angio 1 vsl 10.96 10.96 $618.58 $607.84 -2%
93306   Tte w/doppler complete 1.50 1.46 $211.49 $214.59 1%
93458   L hrt artery/ventricle angio 5.60 5.60 $1,097.48 $1,179.39 7%
94010   Breathing capacity test 0.17 0.17 $36.09 $30.01 -17%
95819   Eeg awake and asleep 1.08 1.08 $441.38 $486.41 10%
96413   Chemo iv infusion 1 hr 0.28 0.28 $142.55 $157.37 10%
99202   Office/outpatient visit new 0.93 0.93 $77.23 $74.32 -4%
99203   Office/outpatient visit new 1.42 1.60 $109.35 $114.45 5%
99204   Office/outpatient visit new 2.43 2.60 $167.09 $172.02 3%
99205   Office/outpatient visit new 3.17 3.50 $211.12 $227.15 8%
99211   Office/outpatient visit est 0.18 0.18 $23.46 $23.73 1%
99212   Office/outpatient visit est 0.48 0.70 $46.19 $58.27 26%
99213   Office/outpatient visit est 0.97 1.30 $76.15 $93.51 23%
99214   Office/outpatient visit est 1.50 1.92 $110.43 $132.94 20%
99215   Office/outpatient visit est 2.11 2.80 $148.33 $185.98 25%
99223   Initial hospital care 3.86 3.86 $206.07 $201.68 -2%
99233   Subsequent hospital care 2.00 2.00 $106.10 $103.28 -3%
99285   Emergency dept visit 3.80 4.00 $177.20 $180.05 2%
99291   Critical care first hour 4.50 4.50 $284.75 $285.77 0%
G0439   Ppps, subseq visit 1.50 1.92 $117.29 $136.08 16%
 

Evaluation and Management (E/M) Office Visits Coding Updates

On Nov. 1, 2019, CMS finalized revisions to the Evaluation and Management (E/M) office visit CPT codes 99201-99215. These revisions build on the goals of CMS and the provider community to reduce administrative burden and put “patients over paperwork.” These revisions will be effective Jan. 1, 2021.
 

Summary of Changes

  • Elimination of history and physical for code selection. Code descriptors have been revised to “state providers should perform a medically appropriate history and/or examination.”
  • Physicians can choose whether their documentation is based on medical decision making (MDM) or total time. The three current MDM sub-components have not materially changed. Extensive edits have been made to the elements for code selection as well as clarifying definitions in the E/M guidelines.
  • The definition of time is now minimum time, not typical time. This now represents total physician/qualified health care professional (QHP) time on the date of service. This use of “date-of-service” time aligns with Medicare’s attempt to better recognize work involved with non-face-to-face services like care coordination. These minimum time definitions would only apply when code selection is primarily based on time and not MDM.
  • Modifications to the criteria for MDM include the removal of ambiguous terms like “mild” and improved definitions of previously ambiguous concepts like “acute or chronic illness with systemic symptoms” as well as redefining data elements to focus on tasks that affect the management of the patient (e.g. independent interpretation of a test performed by another provider and/or discussion of test interpretation with an external physician/QHP).
  • Elimination of CPT code 99201 based on its straightforward nature, similar to CPT code 99202.
    • Creation of a shorter prolonged services code to capture time in 15-minute increments. This code would only be reported with 99205 and 99215 and be used when time would be the basis of code selection.
 
 

Changes Based on Time as Determining Value

CPT Code Current Typical Time (minutes) 2021 New Time (minutes)
99201 10 99201 has been deleted. To report, use 99202
99202 20 15-29
99203 30 30-44
99204 45 45-59
99205 60 60-74
99211 5 presenting problem(s) are minimal, no time indicated
99212 10 10-19
99213 15 20-29
99214 25 30-39
99215 40 40-54

The AMA has published guides to use in determining the above.
 

Medicare Telehealth

In the 2021 Final Rule, CMS has included several Category 1 Telehealth Service additions as well as the addition of telehealth services, on an interim basis, to those services put in place during COVID-19.

CMS has categorized the request for additional services in three different categories. The explanation of each as well as the additions are as follows:
 

Category 1

Services approved, after a streamlined review, because they are similar to professional consultations, office visits, and office psychiatry services that are currently on the list of telehealth services. CMS has finalized the following services to be added to the Category 1 list:
  • Group psychotherapy (CPT code 90853)
  • Psychological and neuropsychological testing (CPT code 96121)
  • Domiciliary, rest home, or custodial care services, established patient (CPT codes 99334-99335)
  • Home visits, established patient (CPT codes 99347-99348)
  • Cognitive assessment and care planning services (CPT code 99483)
  • Prolonged services (HCPCS code G2212)
 

Category 2

Services that are not similar to the current list of telehealth services. The review of these requests includes an assessment of whether the service is accurately described by the corresponding code when delivered via telehealth and whether the use of a telehealth system to deliver the service produces demonstrated clinical benefit to the patient.
 

Category 3

These describe services added to the Medicare telehealth list during the public health emergency (PHE) for the COVID-19 pandemic that will remain on the list through the calendar year in which the PHE ends. CMS has finalized the following services to be added to the Category 3 list of services:
  • Domiciliary, rest home, or custodial care services, established patient (CPT codes 99336-99337)
  • Home visits, established patient (CPT codes 99349-99350)
  • Emergency department visits, levels 1-5 (CPT codes 99281-99285)
  • Nursing facilities discharge day management (CPT codes 99315-99316)
  • 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; CPT codes 99224-99226)
Coverage of other codes added to the covered list during the PHE not within Category 3 or that have not been permanently added to the covered list will expire at the end of the PHE.
 

Quality Payment Program

This has been a difficult year for all providers and practices, even though all have been impacted differently. CMS rolled out some changes to the Quality Payment Program since the COVID-19 pandemic to provide additional support for clinicians. There is an extension for the extreme and uncontrollable circumstances exception application until February 21, 2021.

This application can be accessed and completed on HCQIS Access Roles and Profile (HARP) account. In addition to exceptions, there are opportunities to help improve merit-based incentive payment (MIPS) scores with new high-weighted COVID-19 clinical trial improvement activities. This may help providers receive credit towards MIPS for care provided to patients during the pandemic.

CMS revised the complex patient bonus to account for challenges in treating patients during the pandemic. There is a possibility to earn up to an additional 10 bonus points toward the 2020 performance year.

There are minimal changes to the actual MIPS scoring for the 2021 performance year. The minimum threshold will increase to 60 points in order to avoid the 9% penalty in 2023. The exceptional performance threshold remains the same at 85 points. Quality will decrease to be worth 40% and cost will increase to be worth 20%.  

MIPS Program for 2021
 

Key Takeaways

With these changes, CMS continues its focus on improving patient care outcomes, reducing costs and administrative time, expanding telehealth and moving towards value-based payments.

These changes will affect physicians and practices differently depending on their size and specialty. For example, primary care physicians, OB-GYNs and others that rely heavily on office visits will stand to benefit from the changes to the work-time relative value units. But select hospital specialties, like radiology and anesthesiology, will be negatively impacted due to the re-basing of the conversion factor.

Telehealth services have been around for years, but the pandemic has accelerated patient demand. For providers to keep up, they need to embrace telehealth, as this is just the beginning of a long-term shift in service delivery and care innovation towards more “digital health.”
 

The 2021 CMS Part B Fee Schedule includes significant changes with both winners and losers. Each health organization must develop a plan specific to their circumstances.