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CMS Releases Proposed Rule for 2021 Physician Fee Schedule

On August 3, 2020, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule that includes proposals to update payment policies and payment rates for services furnished under the Medicare Physician Fee Schedule (PFS) on or after January 1, 2021. While the proposed rule predicts an almost 11% overall reduction in payments, the impact will not affect all physicians and specialties in the same manner. In fact, pain management specialists may realize a 7% increase overall in Medicare payments.

The Basis for the Change in Payment

The Social Security Act, that established Medicare, requires that increases or decreases in relative value units (RVUs) may not cause the amount of expenditures for the year to differ by more than $20 million from what it would have been in the absence of any changes. If the threshold is exceeded, adjustments are made to the dollar conversion factor (CF) to maintain budget neutrality.

For 2021, the primary reason for the adjustments is due to significant increases in the RVUs for the revised Office/Outpatient Evaluation and Management (E/M) services (99202-99215). The proposed rule confirms CMS’s intention to implement these new codes and finalize guidelines and payment rates. The increases are based on recommendations on resource costs from the AMA/Specialty Society RVS Update Committee (RUC), which AAPM participates in and advocates on behalf of its members. Since office/outpatient E/M services account for ~20% of overall expenditures, an increase in the value for these codes makes a substantial impact on the fee schedule. As a result, the proposed rule estimates a conversion factor (CF) of $32.26 which is a $3.83 reduction from the 2020 CF of $36.09.

As a result, pain specialists who provide multimodal care, including a mix of initial and follow up evaluations in addition to the procedures they perform, are likely to see greater reimbursement for the E/M visits and greater overall practice revenue. Nevertheless, despite CMS’ goal of reducing reimbursements for procedures, the AAPM representatives working with RUC will continue to fight for appropriate procedure reimbursement and challenge any and all attempts to reduce these payments in our specialty. 

Impact on Physicians and Specialties

The payment impacts in the proposed rule reflect averages by specialty based on Medicare utilization and classifications. Specialties with a greater proportion of E/M services may see increases in payments while those specialties that are primarily procedural-based may see decreases.

AAPM President Ajay D. Wasan, MD MSc, commented, “For some time, CMS policies and reimbursement decisions have effectively shifted reimbursement from procedures toward more comprehensive care-based services such as E/M services. This is reflected in the current plan to not apply the E/M increases to those E/M services included in surgical procedures with a 10 and 90-day global period. In other words, pain specialists who practice multimodal care and integrate the use of procedures, medications, physical therapy, and other modalities are likely to see an increase in practice revenue from their E/M services. These changes will encourage physicians to review treatment plans, establish long term goals, and focus more on patient engagement.”

Although pain medicine physicians do perform procedures, office visits comprise a significant portion of the typical services offered by comprehensive pain medicine practices. Therefore, the predicted average for pain medicine specialties reflect an increase in Medicare payments. The payment impact for an individual physician could vary from the average and would depend on the mix of services he or she furnishes.

Dr. Wasan continued, “The current trend by pain medicine specialists to offer multimodal services with an appropriate mix of E/M services not only improves patient care, it also supports the financial health of physician practices.”

Budget Neutrality and the Public Health Emergency

The AMA and many specialty societies had proposed to CMS that the budget neutrality adjustment should be waived considering the COVID-19 public health emergency. While the proposed rule did not accept that recommendation, comments on the proposed rule will be accepted until October 5, 2020. In the absence of positive action by CMS, Congress can waive the budget neutrality payment reductions. Historically, Congress has eliminated reductions in physician payments based on the prior formula for neutrality adjustments known as the Sustainable Growth Rate (SGR).

AAPM leadership and staff will continue to review possible actions in collaboration with the AMA and other specialties societies to reduce the financial hardship on physicians imposed by the negative change to the dollar conversion factor.

View text of the proposed rule

Access the CMS fact sheet to learn more. 

CMS Issues Summary of Physician Fee Schedule Policies During the Public Health Emergency (PHE)

The Centers for Medicare and Medicaid Services (CMS) has issued a Medicare Learning Network (MLN) article with an effective date of June 12, 2020. The article summarizes the policy changes impacting the Physician Fee Schedule during the time of this Public Health Emergency (PHE). During the early part of the PHE, numerous changes were made to reimbursement policies associated with telehealth and non-face-to-face services. The article addresses the cumulative changes that occurred over this period. Specifically, the following topics are addressed:

  • Expansion of telehealth services to include certain hospital-based services
  • Outlines the change in requirements for telehealth modalities
  • Expansion of virtual check-in services to new and established patients
  • Direct supervision requirements for services provided by clinical staff
  • Reimbursement of telephone services and expansion of codes to both new and established patients
  • Documentation, code selection and reimbursement of E/M services during the PHE
  • Changes to supervision requirements for diagnostic tests
  • Application of Teaching Physician requirements for residents and expansion of therapy services provided by students
  • Flexibilities for Opioid Treatment Programs to use interactive technology for counseling, therapy and assessments
  • Guidelines for ordering COVID-19 testing

​ The article can be accessed here.

Virtual Services During the Time of COVID-19

Public and private insurers have taken steps to increase telehealth services during the public health emergency due to COVID-19. CMS is expanding its Virtual Services benefits on a temporary and emergency basis. The expanded benefit is retroactive to March 1, 2020 and allows patients to receive care at their place of residence rather than in a physician office or a hospital. The most recent expansion included payment for telephone calls with patients.

Part of the expanded benefits include allowing telehealth services to be reported by a variety of non-public facing technologies. The requirement for synchronous audio/visual requirements remains. Services can be reported for both new and established patients and should be reported using the same code (i.e. 99201-99215) that would have been reported if the patient was seen for an in-person visit. Reimbursement will be the same as if the patient was seen in the office or other appropriate setting. Levels of service for office visit codes can be based on either time or medical decision-making. It is not necessary to meet the documentation requirements related to the key components (history, exam, medical decision-making) when selecting a level of service.

Based on input from the medical community, CMS previously announced that Medicare would pay for certain services conducted by audio-only telephone between beneficiaries and their doctors and other clinicians. Now, CMS is also increasing payments for these telephone visits to match payments for similar office and outpatient visits. This would increase payments for these services from a range of about $14-$41 to about $46-$110. The payments are retroactive to March 1, 2020. The codes for telephone services (99441-99443) are time-based services and have restrictions on reporting when they are provided in conjunction with other patient encounters. It is important to read the CPT instructions for reporting telephone services to understand the requirements and limitations associated with these codes.

AAPM offered a webinar “Coding Services in the Wake of COVID-19” on April 15 that addresses the appropriate coding and reporting of telehealth services and other virtual services covered by Medicare. The webinar can be accessed here.

AAPM also convened a panel of pain medicine experts to present a webinar, “Pain Management Best Practices During the COVID-19 Pandemic and Public Health Crises: A Discussion of the New Guidelines.” This webinar is also available and can be viewed here.

Guidelines are changing as payers attempt to revise policies and adjust their systems to meet policy changes. You should visit your Medicare, Medicaid and private payers’ websites and/or read all payer communications to determine coverage and specific instructions. 

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American Academy of Pain Medicine