CY 2021 Physician Fee Schedule Proposed Rule Summary

Physician Fee Schedule Proposed Rule for 2021 Summary

Medicare Program: 2021 Revisions to Payment Policies under the Physician Fee Schedule and Other Changes to Part B Payment Policies; Medicare Shared Savings Program Requirements; Medicaid Promoting Interoperability Program Requirements for Eligible Professionals; Updates to the Quality Payment Program; Medicare Coverage of Opioid Use Disorder Services Furnished

by Opioid Treatment Programs; Medicare Enrollment of Opioid Treatment Programs; Requirements for Electronic Prescribing for Controlled Substance for a Covered Part D Drug under a Prescription Drug Plan or an MA-PD plan; Payment for Office/Outpatient Evaluation and Management Services; Hospital IQR Program; Proposal to Establish New Code Categories;

and Medicare Diabetes Prevention Program (MDPP) Expanded Model Emergency Policy Proposed Rule [CMS-1734-P]

On August 4, 2020, the Centers for Medicare & Medicaid Services (CMS) placed on public display a proposed rule relating to the Medicare physician fee schedule (PFS) for CY 20211 and other revisions to Medicare Part B policies. The proposed rule is scheduled to be published in the August 17, 2020 issue of the Federal Register. If finalized, policies in the proposed rule generally would take effect on January 1, 2021. The 60-day comment period ends at close of business on October 5, 2020.

The final rule would normally be published by November 2, 2020 to allow for a 60-day delay in the effective date in accord with the Congressional Review Act. CMS is waiving the 60-day delay because of the COVID-19 public health emergency (PHE). CMS expects to provide a 30day delay which means that the final rule would likely be published no later than December 2, 2020.

Table of Contents

I. Introduction

2

II. Provisions of the Proposed Rule for PFS

3

A. Background

3

B. Determination of Practice Expense (PE) Relative Value Units (RVUs)

4

C. Potentially Misvalued Services

9

D. Telehealth and Other Services Involving Communications Technology

10

E. Care Management Services and Remote Physiologic Monitoring Services

20

F. Refinements to Values for Certain Services to Reflect Revisions to Payment for Evaluation and Management (E/M) Visits

25

G. Scope of Practice and Related Issues

34

H. Valuation of Specific Codes

38

I. Modifications Related to Coverage for Opioid Use Disorder Treatment Services Furnished by Opioid Treatment Programs

46

1 Henceforth in this document, a year is a calendar year unless otherwise indicated.

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III. Other Provisions

50

A. Clinical Laboratory Fee Schedule (CLFS): Revised Data Reporting and Phase-in of Payment Reductions

50

B. Opioid Treatment Program Provider Enrollment Regulation Updates

51

C. Payment for Principal Care Management Services in Rural Health Centers (RHCs) and Federally Qualified Health Centers (FQHCs)

53

D. Changes to the Federally Qualified Health Center Prospective Payment System

54

E. Comprehensive Screenings for Seniors for Substance Use Disorders

57

F. Medicaid Promoting Interoperability Program Requirements

57

G. Medicare Shared Savings Program

59

H. Notification of Infusion Therapy Options

68

I. Modifications to Quality Reporting Requirements on the Extreme and Uncontrollable Circumstances Policy for Performance Year 2020

69

J. Proposal to Remove Selected National Coverage Determinations

70

K. Requirement for Electronic Prescribing for a Controlled Substance for a Covered Part D Drug under a Prescription Drug Plan of an MA-PD plan

73

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

74

M. Updates to the Certified Electronic Health Record Technology

76

N. Proposal to Establish New Code Categories

80

O. Medicare Diabetes Prevention Program Expanded Model Emergency Policy

80

IV. Updates to the Quality Payment Program

82

A. Introduction and Background

82

B. Summary of the Major Proposals for Quality Payment Program Year 5

84

C. Merit-based Incentive Payment System (MIPS) Structural Changes

85

D. MIPS Performance Category Reporting and Scoring Updates

91

E. MIPS Final Scoring Methodology and Payments Adjustments

101

F. Third Party Intermediaries

109

G. Physician Compare

115

H. APM Incentive Payments

115

V. Planned 30-day Delayed Effective Date for the Final Rule

119

VI. Regulatory Impact Analysis

120

A. RVU Impacts

120

B. Impacts of Other Proposals

124

C. Changes Due to the Quality Payment Program

124

D. Impact on Beneficiaries

127

E. Estimating Regulatory Costs

127

I. Introduction

The proposed rule would update the PFS payment policies that apply to services furnished in all sites by physicians and other practitioners. In addition to physicians, the PFS is used to pay a variety of practitioners and entities including nurse practitioners, physician assistants, physical therapists, radiation therapy centers, and independent diagnostic testing facilities (IDTFs). The

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proposed rule includes proposals for refining the E/M coding and documentation policies finalized in 2020 for implementation January 1, 2021 including proposals to revalue code sets that rely upon are analogous to office/outpatient evaluation and management (E/M) visits commensurate with the increases in values for office/outpatient E/M visits for 2021. CMS continues to make proposals to expand the use of care management services and remote physiologic monitoring services. The rule also contains proposals designed to address the expansion of telehealth services covered during the COVID-19 PHE.

To promote stability during the COVID-19 PHE, CMS limits the number of proposals in 2021 for the Quality Payment Program (QPP). CMS continues to develop the MIPS Value Pathways (MVPs) but defers proposing an initial set of MVPs and policies for their implementation. CMS proposes eliminating the Alternate Payment Model (APM) scoring standard and establishing the APM Performance Pathway (APP).

The proposed conversion factor for 2021 is $32.2605, which reflects a 0.00 percent update adjustment factor and a budget neutrality adjustment of -10.61 percent (2020 conversion factor of $36.0896*1.000*0.8939). This unusually large budget neutrality adjustment results from the revaluation of the E/M codes and proposed revalue of certain codes analogous to E/M codes. This budget neutrality adjustment reflects the fact that office/outpatient E/M visits are approximately 20 percent of the PFS allowed charges.

Specialty-specific payments impacts vary based on the use and mix of E/M services. Specialties where E/M services represent a greater share of total allowed charges, such as endocrinology (+17%), rheumatology (+16%), hematology/oncology (+14%), and family practice (+13%) would receive the largest increases. In contrast, specialties that have a low use of E/M services such as radiology (-11%), nurse anesthetists (-11%), chiropractor (-10%), pathology (-9%) and physical/occupational therapy (-9%) would receive the largest decrease.

II. Provisions of the Proposed Rule for PFS

A. Background

Since January 1, 1992, Medicare has paid for physician services under section 1848 of the Act, "Payment for Physicians' Services." The PFS relies on national relative values that are established for work, practice expense (PE), and malpractice (MP) for each service. These relative values are adjusted for geographic cost variations, as measured by geographic practice cost indices (GPCIs). The summation of these relative values or relative value units (RVUs) are multiplied by a conversion factor (CF) to convert them into a payment rate. This background section discusses the historical development of work, practice expense, and malpractice RVUs, and how the geographic adjustment and conversion factor are used to determine payment. The basic formula is the following:

Payment = [(RVU work x GPCI work) + (RVU PE x GPCI PE) + (RVU MP x GPCI MP)] x CF

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B. Determinations of Practice Expense (PE) Relative Value Units (RVUs)

1. Practice Expense Methodology

CMS summarizes the history of the development of PE RVUs, the steps involved in calculating direct and indirect cost PE RVUs, and other related matters.

For 2021, CMS makes note of several issues in this section.

Stakeholders have raised concerns about the specialty crosswalk used for home Prothrombin Time (PT)/ International Normalized Ratio (INR) monitoring services used by physicians to determine the time it takes for a person's blood plasma to clot. These services are currently classified under the independent diagnostic testing facilities (IDTF) specialty for PE/HR purposes, but stakeholder do not believe this adequately reflect the indirect costs associated with furnishing these services. CMS seeks comments regarding the most accurate specialty crosswalk to use for indirect PE when it comes to home PT/INR monitoring services. It also welcomes information on any additional costs associated with these services not currently reflected in its assigned crosswalk.

With respect to the formula for calculating equipment cost per minute, CMS proposes to treat equipment life durations of less than 1 year as having a duration of 1 year for the purpose of its equipment price per minute formula. In rare situations where items are replaced every few months, CMS believes it is more accurate to treat these items as disposable supplies with a fractional supply quantity as opposed to equipment items with very short equipment life durations. This issue arose because the RUC, specialty societies, and other commenters suggested a useful life of less than 1 year for several of the new equipment items for 2021 and as low as three months in one case. CMS notes that only 4 out of its 777 equipment codes have a useful life duration of less than 3 years. Moreover, the equipment formula was designed under the assumption that each equipment item would remain in use for a period of several years and is not designed for use when equipment is being replaced multiple times per year.2 CMS seeks suggestions on alternative ways to incorporate these items into its methodology or potential changes to the equipment cost per minute formula more broadly.

CMS also recognizes that that the annual maintenance factor used in the equipment calculation may not be precisely 5 percent for all equipment. In the absence of an auditable, robust data source, CMS does not believe it has sufficient information to propose a variable maintenance factor, though it continues to investigate ways of capturing such information.

2 For example, decreasing the useful life of any equipment item from 5 years to 3 months has the same effect as increasing the price of the equipment 20 times over.

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2. Changes to Direct PE Inputs for Specific Services

a. Standardization of Clinical Labor Tasks

CMS states that it continues to work on revisions to the direct PE input database to provide the number of clinical labor minutes assigned for each task for every code in the database instead of only including the number of clinical labor minutes for the pre-service, service, and post-service periods for each code. CMS believes this will increase the transparency of the information used to set PE RVUs, facilitate the identification of exceptions to the usual values, provide greater consistency among codes that share the same clinical labor tasks, and improve relativity of values among codes. In addition, CMS notes the advantage that as medical practice and technologies change over time, changes in the standards could be updated at once for all codes with the applicable clinical labor tasks, instead of waiting for individual codes to be reviewed.

CMS notes, as in previous years, that it will continue to display two versions of the Labor Task Detail public use file to facilitate rulemaking for 2021: one version with the old listing of clinical labor tasks, and one with the same tasks cross-walked to the new listing of clinical labor activity codes. These lists are available on the CMS website at .

b. Equipment Recommendations for Scope Systems

CMS states that during its routine reviews of direct PE input recommendations, it has regularly found unexplained inconsistencies involving the use of scopes and the video systems associated with them. It has been exploring this issue since 2017 and has repeatedly expressed its desire to standardize the description of scopes and its pricing. In 2019, CMS delayed proposals for any further changes to scope equipment until 2020, so that it could incorporate feedback from a RUC Scope Equipment Reorganization Workgroup. In 2020, incorporating this feedback, CMS finalized its proposal to establish 23 different types of scope equipment (these are listed in Table 5 in the proposed rule). There are seven scope equipment codes that continue to lack invoices and pricing.

For 2021, CMS did not receive any further recommendations from the RUC Scope Equipment Reorganization Workgroup. CMS did receive invoices associated with the pricing of the scope video system (monitor, processor, digital capture, cart, printer, LED light) ES031 equipment item as part of its review of the Esophagogastroduodenoscopy with Biopsy and the Colonoscopy code families. CMS proposes based on submission of invoices to update the price of the ES031 scope video system equipment to $70,673 from $36,306. The total price of $70,673 is based on the sum of component prices of $21,988.89 for the processor, $16,175.87 for the digital capture device, $6,987.56 for the monitor, $7,922.80 for the printer, $4,945.45 for the cart, and $12,652.82 for the LED light. CMS proposes to update this pricing increase over the remaining two years of the market-based supply and equipment pricing transition: for 2021 the equipment price will be $53,490 before moving to its destination price of the $70,673 in 2022.

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