CMS signs off on physician fee schedule changes

CMS on Tuesday signed off on Medicare’s 2021 physician fee schedule, giving providers just a month to prepare for the changes.

The final rule permanently allows Medicare providers to use telehealth to carry out home visits for so-called evaluation and management services and some visits for people with cognitive impairments. It also temporarily continues telehealth services for emergency department visits and other services with an eye toward making them permanent, according to a CMS fact sheet.

“Telehealth has long been a priority for the Trump Administration, which is why we started paying for short virtual visits in rural areas long before the pandemic struck. But the pandemic accentuated just how transformative it could be,” CMS Administrator Seema Verma said in a statement.

According to CMS, more than 24.5 million of Medicare’s 63 million beneficiaries and enrollees received a Medicare telemedicine service during the public health emergency. The agency expanded the telehealth services rural enrollees can receive at healthcare facilities. During a call with reporters, Verma reiterated that Congress needs to change federal law to permanently allow non-rural beneficiaries to receive telehealth benefits or for Medicare beneficiaries to receive telehealth services at home. She noted the agency will study the safety, quality and cost of remote patient monitoring and virtual physician supervision.

CMS also lowered the fee schedule’s conversion factor from $36.09 to $32.41, a decrease of $3.68 or 10.2%. It also made several changes to evaluation and management services and codes, including increases in their relative value and changes to coding criteria. Those moves could help clinicians that deliver a lot of those services, but proceduralists will probably see their revenues decline.

“This finalized policy marks the most significant updates to E/M codes in 30 years, reducing burden on doctors imposed by the coding system and rewarding time spent evaluating and managing their patients’ care. In the past, the system has rewarded interventions and procedures over time spent with patients—time taken preventing disease and managing chronic illnesses,” Verma said in a statement.

During a call with reporters, a senior CMS official said the agency lowered the number of providers it expects to bill for spending additional time with patients.

“As a result, the impact on other specialties decreased,” the official said.

But that hasn’t satisfied providers that will see their payments slashed. “The 10% decrease to the conversion factor and resulting reimbursement cuts to many specialties is deeply troubling during a time when COVID-19 cases are skyrocketing and practices are scrambling to stay financially viable. We are disappointed that CMS decided to not provide the stability that physician practices require to meet patient needs during this unprecedented public health emergency,” Anders Gilberg, senior vice president of government affairs at the Medical Group Management Association, said in a statement.

CMS claimed the changes would significantly reduce the documentation burden for all clinicians, allowing them more freedom to choose the best course of treatment and spend more time with patients.

The rule takes effect on Jan. 1. CMS pushed back its final physician fee schedule by a month to tackle urgent problems caused by COVID-19. Now healthcare executives will have to respond to the changes on short notice, even as they are short-staffed thanks to the holiday season and pandemic-induced financial challenges.

Providers are struggling to predict how the payment changes will shake out because nobody knows how the coronavirus outbreak will affect their practices over the next two quarters. Experts say some health systems and medical groups could suffer financially if their revenues decline and compensation costs rise at the same time. Providers argue Medicare enrollees could have more trouble getting care if struggling providers close their doors.

“The (American Medical Association) strongly urges Congress to prevent or postpone the payment reductions resulting from Medicare’s budget neutrality requirement. Physicians are already experiencing substantial economic hardships due to COVID-19, so these payment cuts could not come at a worse time,” AMA President Dr. Susan R. Bailey said in a statement.

But in its comments on the proposed rule, the Medicare Payment Advisory Commission said the changes might improve access because the current fee schedule overvalues most procedures and undervalues evaluation and management services.

“This mispricing may lead to problems with beneficiary access to these services and may influence the pipeline of physicians in specialties that tend to provide a large share of E&M services. By substantially increasing the (relative value of) E&M office/outpatient visits, CMS will help remedy several years of passive devaluation of these services,” MedPAC wrote.

The policy change could help close the massive pay gap between primary care physicians and specialists. According to MedPAC, primary care physicians earned a median income of $243,000 in 2018, while surgeons’ median income was $426,000.

CMS limited Medicare’s costs to taxpayers and beneficiaries by making the changes budget neutral.

“Medicare spending has been growing as a share of federal spending, contributing to the country’s growing debt, and Medicare premiums and cost-sharing have been consuming an increasing share of beneficiaries’ Social Security benefits,” MedPAC wrote.

The advisory panel said there’s no evidence that total physician payments are too low to ensure overall access to care. CMS’ latest Medicare Current Beneficiary Survey found that 92% of Medicare beneficiaries reported no trouble accessing care, and access is best for specialists.

When Medicare enrollees have trouble accessing treatment, “the cost of care is the main barrier—not the availability of clinicians willing to serve them,” MedPAC said.

The agency sewed up several expansions to providers’ scopes of practice. Nurse practitioners, physicians’ assistants and other non-physician clinicians can supervise diagnostic testing if state laws allow it starting next year. CMS made clear that providers can bill Medicare for professional services delivered by pharmacists.

The Trump administration also tweaked the Medicare Shared Savings Program to address problems caused by the coronavirus outbreak, including giving providers full credit for 2020 patient experience surveys automatically. It also aligned the reporting requirements for both tracks of its Quality Payment Program.

Regulators fiddled with national coverage determinations and said they would waive in-person class requirements for the Medicare Diabetes Prevention Program during the pandemic if its necessary.