December 10, 2020

CMS Issues 2021 MPFS and QPP Final Rule

Holland & Knight Alert
Miranda A. Franco


  • The Centers for Medicare & Medicaid Services (CMS) has published the Calendar Year (CY) 2021 Final Rule for the Medicare Physician Fee Schedule (MPFS), which contains updates to the Quality Payment Program (QPP). The MPFS dictates Medicare rates and policies under Part B, while the QPP implements two value-based payment programs: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).
  • Among notable changes, CMS has proposed to make permanent certain telehealth changes that have been implemented in response to the COVID-19 public health emergency (PHE), confirmed the evaluation and management (E/M) documentation guidelines and payment changes finalized in the 2020 MPFS, and delayed the MIPS Value Pathway (MVP) until the 2022 performance period or later.
  • This Holland & Knight alert summarizes a number of key provisions in the MPFS and QPP Final Rule, which will go into effect on Jan. 1, 2021.

The Centers for Medicare & Medicaid Services (CMS) has published the Calendar Year (CY) 2021 Final Rule for the Medicare Physician Fee Schedule (MPFS), which contains updates to the Quality Payment Program (QPP). The MPFS dictates Medicare rates and policies under Part B, while the QPP implements two value-based payment programs: the Merit-Based Incentive Payment System (MIPS) and Alternative Payment Models (APMs).

Among notable changes, CMS has proposed to make permanent certain telehealth changes that have been implemented in response to the COVID-19 public health emergency (PHE), confirmed the evaluation and management (E/M) documentation guidelines and payment changes finalized in the 2020 MPFS, and delayed the MIPS Value Pathway (MVP) until the 2022 performance period or later.

CMS also included two new Interim Final Rules (IFRs): "Coding and Payment of 'Virtual Check-In' Services" and "Coding and Payment for Personal Protective Equipment (PPE)." CMS is soliciting comments on the IFRs for the next 60 days. The IFRs address the following decisions:

  • CMS has established Healthcare Common Procedure Coding System (HCPCS) code G2252 to report extended audio-only assessment services with 11-20 minutes of medical discussion. Coverage is limited to established patients, and services may not originate from a related evaluation and management (E/M) service provided within the previous seven days nor lead to an E/M service within the next 24 hours or soonest available appointment.
  • CMS has adopted price increases for Personal Protective Equipment (PPE) supplies utilized during the public health emergency (PHE) and reported with CPT 99072. Although CMS considers these supplies as "bundled," they will make increased payments for the related services that include the supplies.

To learn more about the MPFS and QPP Final Rule, review the following resources:

The Final Rule takes effect on Jan. 1, 2021.

Below is a summary of highlights of the Final Rule.

Physician Fee Schedule Decreased Conversion Factor (CF)

The CY 2021 physician CF is $32.4085, a 10.2 percent decrease from the 2020 CF of $36.0896. Note the CY 2021 Proposed Rule set the conversation factor at $32.2605, a decrease of 10.61 percent. This negative adjustment results from a statutorily mandated budget neutrality adjustment to account for changes in work relative value units (RVUs). The shift in work RVUs is primarily driven by updates to E/M services that were finalized in the CY 2020 MPFS Final Rule, which were not effective until Jan. 1, 2021, and other proposed changes in work. Congressional action is now required to avoid a reduction in the conversion factor in CY 2021.

Two bills have been introduced to address the situation: Reps. Michael Burgess (R-Texas) and Bobby Rush (D-Ill.) introduced H.R. 8505, which would provide a one-year waiver of budget neutrality adjustments in the physician fee schedule, and Reps. Ami Bera (D-Calif.) and Larry Bucshon (R-Ind.) introduced H.R. 8702, which would hold providers harmless for cuts by giving them an additional payment that would bring their overall reimbursement up to the 2020 physician fee schedule levels for two years. The Senate is also exploring a phase-in approach.

Federally Qualified Health Center (FQHC) Market Basket Update

CMS finalized a proposal to rebase and revise the market basket for FQHCs to a 2017 base year, meaning the proposed FQHC market basket update for 2021 will be 2.4 percent. After accounting for the 2021 multifactor productivity adjustment of 0.7 percent, the payment update for FQHCs is 1.7 percent for 2021.

Principal Care Management (PCM) Services in Rural Health Clinics (RHCs) and FQHCs

CMS finalized the addition of two HCPCS codes: G2064 (Comprehensive care management services for a single high-risk disease, at least 30m of physician or other qualified health care professional time, per calendar month) and G2065 (Comprehensive care management services for a single high-risk disease, at least 30m of clinical staff time directed by a physician or other qualified health care professional, per calendar month). In addition, general care management HCPCS code G0511 (RHC or FQHC only, general care management, 20m or more of clinical staff time, per calendar month) will calculate a new average for the national non-facility PFS rate for PCM cervices furnished by RHCs and FQHCs. When RHCs and FQHCs provide PCM services, they will also be able to bill the services using HCPCS code G0511, either alone or with other payable services on an RHC or FQHC claim.

Evaluation and Management (E/M) Visits

Effective Jan. 1, 2021, CMS will implement payment rate increases for office/outpatient E/M codes and simplified coding and billing requirements for E/M visits. CMS finalized this policy in the CY 2020 MPFS Final Rule, but delayed implementation until 2021. Specialties that do not generally bill office/outpatient E/M visits would experience the most significant decreases, while specialties and practices that bill higher level established patient visits would see the most significant increases. Specialty impact in the final rule ranges from -10 percent for radiology, nurse anesthetists/anesthesiology assistants and chiropractors to +16 percent for endocrinologists. As noted above, congressional action would be required to avoid a reduction in the conversion factor in CY 2021 by suspending the budget neutrality adjustment for E/M changes effective CY 2021.

Revalue Services Similar to E/M Services

CMS finalized as proposed to revalue services that include, or are similar to, E/M services. CMS refined the times used for rate-setting E/M visits by updating work RVUs consistent with recommendations from the American Medical Association's (AMA) Current Procedural Terminology (CPT) Editorial Panel for the following code sets:

  • End-Stage Renal Disease (ESRD) Monthly Capitation Payment (MCP) Services
  • Transitional Care Management (TCM) Services
  • Maternity Services
  • Cognitive Impairment Assessment and Care Planning
  • Initial Preventive Physical Examination (IPPE) and Initial and Subsequent Annual Wellness Visits (AWV)
  • Emergency Department Visits
  • Therapy Evaluations
  • Psychiatric Diagnostic Evaluations and Psychotherapy Services

Telehealth Updates

Through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), CMS temporarily removed the geographic and site of service originating site restrictions for Medicare telehealth services. The Final Rule does not address these provisions because CMS is limited by statute. CMS notes that making these flexibilities permanent requires an act of Congress.

However, CMS did finalize the following telehealth changes:

Permanent Telehealth Services Additions

In the March 2020 interim final rule with comment period (IFC), CMS added services to the Medicare telehealth list for the duration of the COVID-19 PHE. CMS finalized its proposal to make some of these services permanent.

Changes to the Medicare telehealth services list are made with the annual MPFS rulemaking process. When a request to add a service to the list is submitted, Medicare assigns it to one of two categories. Category 1 is for services similar to consultations and office visits currently on the list, and Category 2 is for services that are not similar to those currently on the list. CMS finalized adding the following services to the list on a Category 1 basis:

  • Group Psychotherapy (Common Procedural Technology or CPT code 90853)
  • 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)
  • Visit Complexity Inherent to Certain Office/Outpatient E/Ms (G2211)
  • Prolonged Services (G2212)
  • Psychological and Neuropsychological Testing (CPT code 96121)

Here is the list of services approved for telehealth.

Temporary Telehealth Services Additions

For the services that CMS does not permanently add to the Medicare telehealth list, CMS finalized the creation of a temporary third category (Category 3) of services for the telehealth list. These services were added during the PHE and will remain on the list through the calendar year in which the PHE ends or Dec. 31, 2021.

Temporary Code for Audio-Only Telehealth Services/Virtual Check-In

On an interim basis, CMS created HCPCS code G2252 for extended services delivered via synchronous communications technology, including audio-only service (e.g., virtual check-ins).

  • G2252 (Brief communication technology-based service, e.g., virtual check-in, by a physician or other qualified health care professional who can report evaluation and management services, provided to an established patient, not originating from a related E/M service provided within the previous seven days nor leading to an E/M service or procedure within the next 24 hours or soonest available appointment; 11-20 minutes of medical discussion.)

CMS also finalized a direct crosswalk to CPT code 99442 to most accurately reflect resources associated with audio-only communication. If the audio-only service is performed within seven days of a previous E/M service or results in an E/M service within the following 24 hours, the phone conversation will be bundled into that in-person service.

Because it is a communication technology-based service (CTBS), the traditional telehealth location restrictions do not apply, which in part means G2252 can be used regardless of the patient's geographic location and regardless of whether the PHE ends before the end of CY 2021. Thus, this code would extend beyond the PHE. The communication technology must be synchronous and is subject to the same billing requirements as the other virtual check-in codes. CMS will consider whether this interim policy should be adopted permanently.

Removal of Frequency Limitations for Subsequent Skilled Nursing Facility (SNF)

CMS sought comment on whether it would enhance patient access to care to remove frequency limitations for subsequent nursing facility visits furnished via Medicare telehealth altogether, and how best to ensure that patients would continue to receive necessary in-person care. Based on stakeholder comments, the agency finalized a frequency limitation for subsequent SNF telehealth visits from once every 30 days to once every 14 days.

Updates for Remote Physiologic Monitoring (RPM) Services

CMS finalized its clarification of policies related to RPM services and permanently finalized proposed changes. CMS clarified that RPM is the collection and analysis of patient physiologic data used to develop and manage a treatment plan related to a chronic and/or acute health illness or condition with a U.S. Food and Drug Administration (FDA)-approved device. These services are considered E/M services and thus must be provided by healthcare providers who are eligible to furnish E/M services. However, the agency will allow auxiliary personnel, including contracted employees, to furnish RPM services under a physician's supervision. After the PHE, RPM services may be furnished only when an established patient-physician relationship exists, although flexibilities during the PHE allow new patients to receive RPM services. Further, after the PHE ends, 16 days of data must be collected and transmitted every 30 days to qualify as RPM services.

Telehealth Study

CMS announced a study of its telehealth flexibilities provided during the pandemic. The study will explore new opportunities for telehealth services, virtual care supervision and remote monitoring to provide more efficiency and ways for the agency to enhance program integrity.

Updates Related to Scope of Practice

Multiple scope of practice flexibilities have been introduced in response to the COVID-19 PHE. CMS finalized plans to continue the below policies once the PHE ends.

  • Flexibility that allows nurse practitioners, clinical nurse specialists, physician assistants and certified nurse-midwives, in addition to physicians, to supervise the performance of diagnostic tests, subject to applicable state law.
  • Clarification that pharmacists fall within the definition of auxiliary personnel under "incident to" regulations and may provide medication management services incident to the billing physician or nonphysician practitioner (NPP). Pharmacists may not bill for E/M services as they are not considered qualified health professionals as defined in the CPT codebook and thus are ineligible to bill E/M codes; CMS said new coding may be useful.
  • Flexibility that allows physical therapists and occupational therapists to delegate maintenance therapy services to a therapy assistant.
  • Clarification that physicians and NPPs can review and verify documentation of their own services when entered into the medical record by members of the medical team.
  • Flexibility that allows audio/visual real-time supervision of teaching physicians.
  • Expansion of primary care services that may be furnished by residents.

Physician Self-Referral Law

Per Section 1877 of the Social Security Act, physicians are penalized if they refer a Medicare patient to receive a "designated health service" from an entity in which they, or their immediate family, have a financial arrangement. In response to the PHE, CMS finalized revisions to the designated health services code list excluded from the physician self-referral policy to include the current CPT codes for SARS-CoV-2 tests. Additionally, all current and future CPT/HCPCS codes associated with COVID-19 vaccines will be exempt from the physician self-referral prohibition.

Transitional Care Management (TMC) and Chronic Care Management (CCM) Codes

CPT codes 99495 and 99496 describe management of a patient's transition from acute care or certain outpatient stays to a community setting, with a face-to-face visit, once per patient within 30 days post-discharge. CMS maintains a list of 57 codes that cannot be billed concurrently with those codes because of those services' potential duplication. CMS finalized the removal of 14 codes from that list.

CMS also finalized the allowance of the new CCM HCPCS code G2058 (CCM services, each additional 20 minutes of clinical staff time, per calendar month) to be billed concurrently with TCM when reasonable and necessary, and notes that minutes counted for TCM services cannot be counted toward other services.

Medicare Part B Drug Payments for Drugs Approved Through Pathway Established Under Section 505(b)(2) of the Food, Drug, and Cosmetic Act

CMS did not finalize its proposal to codify the agency's current practice of assigning certain 505(b)(2) products to existing HCPCS codes if those products are considered "multiple-source" drugs, as would be consistent with the agency's interpretation of Section 1847A of the Social Security Act. Without finalization, the practice of assigning unique HCPCS codes to 505(b)(2) products will be subject to CMS determination and will likely fall along the therapeutic evidence designation line.

Opioid Use Disorder (OUD) Treatment

CMS finalized its proposal to add naloxone to the definition of OUD treatment services to increase access. To account for the additional cost for these drugs, CMS finalized the payment add-on code for nasal naloxone (G2215) but did not finalize an add-on code for auto-injector naloxone. CMS also finalized its proposal to adjust the bundled payment rates using add-on codes to account for instances in which Opioid Treatment Programs (OTPs) provide Medicare beneficiaries with naloxone.

E-Prescribing for Controlled Substances (EPCS) for a Covered Part D Drug Under a Prescription Drug Plan (PDP) or Medicare Advantage Prescription Drug (MA-PD) Plan

CMS finalized a requirement for all electronic prescribing for Schedule II, III, IV and V controlled substances to use a single national standard (i.e., the National Council for Prescription Drug Programs SCRIPT Standard) with an effective date of Jan. 1, 2021, and a compliance date of Jan. 1, 2022.

Removal of National Coverage Determinations (NCDs)

CMS finalized the removal of six NCDs but did not finalize the removal of three NCDs. CMS believes that the removed NCDs may no longer contain pertinent or clinically relevant information and are rarely used by beneficiaries. The NCDs removed are 1) Extracorporeal Immunoadsorption (ECI) using A Columns, 2) Electrosleep Therapy, 3) Implantation of Gastroesophageal Reflux Device, 4) FDG PET for Inflammation and Infection), 5) Abarelix for the Treatment of Prostate Cancer and 6) Magnetic Resonance Spectroscopy. CMS did not finalize the removal of 1) Apheresis, 2) Histocompatibility Testing and 3) Cytogenetic Studies.

Quality Payment Program (QPP)

Under the QPP, eligible clinicians will elect to be subject to payment adjustments based upon performance under the MIPS or to participate in the Advanced Alternative Payment Model (APM) track. The Final Rule includes notable proposed changes to the MIPS and Advanced APM participation options and requirements for 2021. The tenor of these changes is that providers will not recover from COVID-19 overnight and will need support.

Notable changes include:

Changes to Accountable Care Organizations (ACOs)

For Performance Year (PY) 2020, CMS considers all ACOs to be affected by the PHE and will apply the Shared Savings Program's extreme and uncontrollable circumstances policy. As a result, CMS will provide full credit for the Consumer Assessment of Healthcare Providers and Systems (CAHPS) patient experience of care surveys. In addition, the agency will provide financial flexibilities to ACOs in the Medicare Shared Savings Program (MSSP). Finally, beginning in PY 2021, ACO quality reporting requirements will align with the requirements under the APM Performance Pathway (APP) under the QPP.

MIPS Value Pathways (MVP)

In CY 2020, CMS finalized the creation of MIPS Value Pathways (MVPs), which were designed to align activities from the four MIPS performance categories around a specialty, medical condition or patient population. Although CMS intended to begin transitioning to MVPs during the 2021 performance year, the agency is delaying this until at least 2022 in response to the COVID-19 pandemic.

MIPS Category Weights

MIPS includes four performance categories: quality, cost, improvement activities and promoting interoperability. Although CMS proposed to lower the performance threshold to make it easier to avoid a penalty in response to COVID-19, they ultimately decided to keep the performance threshold at 60 points.

The final weights for 2021 are as follows:

  • Quality, 40 percent (5 percent decrease): The CMS Web Interface submission method is no longer available and CMS will use performance year benchmarks, not historical data, to score measures for PY 2021 due to the COVID-19 PHE.
  • Cost, 20 percent (5 percent increase): Update measure specifications to include telehealth services for existing episode-based cost measures and total per capita cost (TPCC) measures.
  • Improvement Activities (IA), 15 percent: Minimal changes focus on the process for nominating new activities.
  • Promoting Interoperability, 25 percent: New optional health information exchange (HIE) bidirectional exchange measure and the query of the Prescription Drug Monitoring Program (PDMP) measure will remain voluntary and worth 10 bonus points.

DISCLAIMER: Please note that the situation surrounding COVID-19 is evolving and that the subject matter discussed in these publications may change on a daily basis. Please contact your responsible Holland & Knight lawyer or the author of this alert for timely advice.

Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.

Related Insights