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Final PFS: 2021 conversion factor gets 10% squeeze, E/M revisions remain on track

Physicians are facing a 10.2% drop in the Medicare conversion factor (CF) starting Jan. 1, as an offset to broad new increases in reimbursement rates for E/M office visits and other E/M-like services, according to the final 2021 Medicare physician fee schedule released Dec. 1.
The news caps a year of turbulence for medical practice providers. The CF is one of the primary rate-setting mechanisms for office and outpatient provider services.
CMS finalized the calendar year 2021 CF at $32.41. That marks a slight improvement over the 11% rate cut that CMS had proposed in August. However, the CF drawdown will result in an up-and-down projection in 2021 for medical specialties.
Calculation of the CY 2021 PFS Conversion Factor
CY 2021 Conversion Factor (before adjustments)
Statutory update factor
CY 2021 RVU budget neutrality adjustment
Final proposed CY 2021 Conversion Factor
Source: Final 2021 Medicare physician fee schedule, released Dec. 1
CF cuts balance E/M gains
The steep CF decline is due to Medicare’s budget neutrality mandate, which CMS states it was unable to waive. The cut is needed as a counterweight to the increased fees for E/M office visit codes (99202-99215), which account for 20% of fee schedule spending and have been a longstanding focus of the agency and the wider medical practice industry.
In the final rule, CMS confirmed that it has adopted relative value units (RVU) approved by the AMA for the suite of E/M office visit codes. The new valuations boost total RVUs for nearly all of the office visit codes, and they elevate RVUs for established office codes 99212-99215 – by far the most frequently reported E/M office services – by an average of 28%.
But because of the CF reduction, the E/M codes that were in focus will see a dampened payment increase in 2021. For example, new patient E/M codes 99202-99204 will actually see a pay cut. And instead of pay gains approaching 30% for the core established office visit codes, they will instead see increases in the range of 11% to 15%.
"It is disappointing to all the the payment for three levels of new patient visits will decrease in 2021," says Betsy Nicoletti, president of Medical Practice Consulting in Northampton, Mass.
E/M office visit fee comparison, 2020-2021
2020 Total RVUs
2020 CF
2020 Fee
2021 Total RVUs
2021 CF
2021 Fee
YTY Fee Change
Source: Final 2021 Medicare physician fee schedule
In addition to the impact of the CF change, specialties will feel the effects of shifts to their relative value units that will further change their reimbursement. Big winners, namely those that report a large amount of E/M codes, include endocrinology (+16%), rheumatology (+15%), hematology/oncology (+14%) and family practice (+13%), according to data contained in the final fee schedule.
Specialties that are on pace for net pay cuts include radiology (-10%), chiropractor (-10%), nurse anesthetist (-10%) and physical and occupational therapy (-9%).
Calculation of the CY 2021 Anesthesia Conversion Factor
CY 2021 Conversion Factor (before adjustments)
Statutory update factor
CY 2021 RVU budget neutrality adjustment
CY 2021 practice expense and malpractice adjustment
Final proposed CY 2021 Anesthesia Conversion Factor
Source: Final 2021 Medicare physician fee schedule, released Dec. 1
E/M documentation changes on track
While CMS made some surprise announcements for E/M office visit add-on codes, you won’t find any substantial changes in the final rule pertaining to the E/M office visit documentation guidelines that govern 99202-99215 code level selection starting Jan. 1.
In 2021, you will use either medical decision-making (MDM) or time to choose a level of service for E/M office visit codes, the agency confirmed. That means, for selection purposes, you can eschew the history and exam elements that long defined E/M codes.
“The clinically outdated system for number of body systems/areas reviewed and examined under history and exam will no longer apply, and the history and exam components will only be performed when, and to the extent, reasonable and necessary, and clinically appropriate,” CMS states. “We continue to believe these policies will further our ongoing effort to reduce administrative burden, improve payment accuracy, and update the O/O E/M visit code set to better reflect the current practice of medicine.”
CMS replaces prolonged service code 99417
Yet CMS made the surprising decision to issue a new HCPCS code for prolonged care.
CMS did not agree with the AMA’s final descriptor for 99417, which calls for reporting the prolonged service code when a time-based office E/M visit exceeds the minimum time for 99205 and 99215.
Instead, next year you will report code G2212, which requires the visit to exceed the maximum time for 99205 and 99215. Here’s the descriptor:
  • “Prolonged office or other outpatient evaluation and management service(s) beyond the maximum required time of the primary procedure which has been selected using total time on the date of the primary service; each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact (List separately in addition to CPT codes 99205, 99215 for office or other outpatient evaluation and management services) (Do not report G2212 on the same date of service as 99354, 99355, 99358, 99359, 99415, 99416). (Do not report G2212 for any time unit less than 15 minutes).”
"I understand the AMA and CMS couldn't see eye-to-eye on the use of CPT code 99417 but wish they had tried harder to come to agreement," Nicoletti says. "Adding a HCPCS code for prolonged care is confusing to medical practices."
Keep an eye on private payers that may prefer the G code and reach out to your software vendors for an upgrade that will help the practice track time and assign the correct code.
Visit complexity add-on code arrives
It has taken a couple of years, and there are still many questions about who can use it and when they should use it, but CMS will roll out code G2211 (Visit complexity inherent to evaluation and management associated with medical care services that serve as the continuing focal point for all needed health care services and/or with medical care services that are part of ongoing care related to a patient’s single, serious condition or a complex condition. [Add-on code, list separately in addition to office/outpatient evaluation and management visit, new or established]).
CMS estimates that the new add-on code will be appropriate for 90% of E/M office visit encounters, the agency stated in the final rule.
Note that the code can be reported with new patient visits: In the final rule CMS noted that it had accidentally excluded new patients from the descriptor in the proposed rule released earlier this year.
Telehealth rules under COVID
In good news for providers, CMS finalized 114 Category 2 codes for telehealth – i.e., codes cleared for use outside of the restrictive distant-and-originating-site requirements and eligible for other flexibilities under the public health emergency (PHE). The agency also added a new “Category 3” of codes that “will remain on the list through the calendar year in which the PHE ends.”
The bad news is these codes will eventually go back to the old telehealth rules – reversing the wave of adoption prompted by the PHE – if Congress does not change the law.
In the meantime, CMS reports that it will conduct “a commissioned study, analysis of Medicare claims data or another assessment mechanism, to further study the impacts of this limited permanent expansion of the virtual presence policy to inform potential future rulemaking, and in an effort to prevent possible fraud, waste and abuse.”
New Category 2 telehealth-eligible codes added in this rule are group psychotherapy (90853); psychological and neuropsychological testing (96121); domiciliary, rest home or custodial care services, established patients (99334-99335); home visits, established patients (99347-99348); cognitive assessment and care planning services (99483); visit complexity inherent to certain office/outpatient E/M (G2211); and prolonged services (G2212). 
Telephone visits get a new interim G code
CMS finalized its decision to cease separate payment for CPT telephone E/M codes 99441-99443 once the PHE ends. For the remainder of 2021, CMS is creating an interim code, G2252, for a “brief communication technology-based service (e.g., virtual check-in)” for established patients only. The code would be priced at the same amount as CPT telephone visit code 99442 and would cover an 11-20-minute “medical discussion,” similar to that code.
The code would be used for cases “when the acuity of the patient’s problem is not necessarily likely to warrant a visit, but when the needs of the particular patient require more assessment time from the practitioner,” CMS states in the rule.
For example, the service applies when the patient reports an exacerbation of an ongoing problem and wants to know whether a face-to-face office visit is warranted, CMS states. The agency stated that it does not consider a telephone visit to be a substitute for an E/M service but instead “an assessment to determine the need for one.”
Code G2252 will therefore be considered a communications technology-based service (CTBS) similar to a virtual check-in, not a telehealth service. Like the CPT phone codes, it will not be separately reported if the call occurs within seven days after a previous in-person visit or within 24 hours “or soonest available appointment.”
QPP updates: MVP still delayed and more
The Quality Payment Program (QPP) and the Merit-Based Incentive Program (MIPS) will mostly be what it has been: The MIPS Value Pathways (MVP) overhaul, which was devised in 2019 and originally slated to begin in 2021, is pushed back a year due to COVID-19.
MVP will drastically reduce and streamline the number of reporting measures for participants at implementation – now planned for 2022. 
However, the proposed APM Performance Pathway (APP), an optional reporting and scoring pathway for MIPS-eligible clinicians in MIPS alternative payment model (APM) organizations that meet certain performance standards, is on for 2021.
Similar to the MVP program, APP streamlines reporting. For example, you’ll need to report six quality measures in APP. Approved MIPS APMs and all Shared Savings accountable care organizations (ACO) will report these measures in 2021. 
In a change from the proposed rule, the CMS Web Interface method, which was supposed to go away as a collection type for MIPS in 2021, gets a one-year reprieve. 
The MIPS category weights are the same as proposed – 40% for quality, 20% for cost, 25% for promoting interoperability and 15% for improvement activities. However, note that the overall performance threshold that was going to drop to 50 points instead stays at 60 points for the 2021 reporting period. 
The proposal to double the number of points available for the complex patient bonus to 10 is finalized. And CMS reminds participants that, starting in 2022, there is nothing stopping the statutory requirement that Cost and Quality both be weighted at 30%.
Remote patient monitoring update
CMS also finalized PHE flexibilities in remote patient monitoring codes: For example, while “only physicians and NPPs [non-physician providers] who are eligible to furnish E/M services may bill RPM services,” auxiliary personnel, including contract employees, may provide RPM services incident to under codes 99453 and 99454. Once the PHE ends, many of the current flexibilities will, too: For example, established patient-physician relationship will once again be required to initiate RPM services.
The waiver for direct supervision of NPPs by a physician using real-time, interactive audio and video technology is cleared through “the latter of the end of the calendar year in which the PHE ends or December 31, 2021.” 
There will be some new virtual services that NPPs will be eligible to provide: For example, CMS is adding G2250 (Remote assessment of recorded video and/or images submitted by an established patient) and G2251 (Brief communication technology-based service, e.g. virtual check-in, by a qualified health care professional) for providers that cannot bill E/M services.
Other news and notes
  • Consent requirements for remote physiologic monitoring eased. Clinical staff can obtain patient consent for remote physiologic monitoring cycle when they offer the initial services 99453 (Remote monitoring of physiologic parameter[s] [e.g., weight, blood pressure, pulse oximetry, respiratory flow rate], initial; set-up and patient education on use of equipment) or 99454 (Remote monitoring of physiologic parameter[s] [e.g., weight, blood pressure, pulse oximetry, respiratory flow rate], initial; device[s] supply with daily recording[s] or programmed alert[s] transmission, each 30 days). In addition, CMS will allow clinical staff to report the services when they are under general, rather than direct, supervision.
  • Transitional care management expanded, again. As part of its ongoing quest to boost utilization of transitional care services (99495-99496), CMS will unbundle 14 end-stage renal disease (ESRD) codes and chronic care management (CCM) code G2058 – which will be replaced with 99439 next year – from the service.
This is a breaking news story. Please check back for updates

Editor's note: For a comprehensive review of the final 2021 Medicare physician fee schedule, attend the live webinar on Dec. 16, 2021 Medicare Physician Fee Schedule: Prepare for E/M Shift, Fee Updates, and More.
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