Physician Fee Schedule: Proposed Rule for CY 2021

AHA Regulatory Advisory
August 25, 2020

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Medicare Physician Fee Schedule: Proposed Rule for CY 2021


The Centers for Medicare & Medicaid Services (CMS) Aug. 3 issued a proposed rule that would update physician fee schedule (PFS) payments for calendar year (CY) 2021. The rule also includes several proposals to implement year five of the quality payment program (QPP) created by the Medicare Access and CHIP Reauthorization Act (MACRA) of 2015.

Our Take:
We are pleased that the agency includes several proposals that would increase telehealth and scope of practice flexibilities. We also appreciate the flexibility in the opioid treatment program (OTP) benefit and delay of the next Clinical Laboratory Fee Schedule (CLFS) data reporting period, given that the COVID-19 pandemic has already greatly stretched the resources of hospitals and health systems. However, we continue to have concerns regarding the pricing methodology for drugs administered as part of the OTPs. Moreover, we are concerned about the redistributive effect of CMS’s budget-neutral proposed increases in the payment rates for office/outpatient evaluation and management (E/M) visits.

Key Takeaways

The proposed rule would:

  • Payment Update: Reduce the PFS conversion factor by 10.61% for CY 2021.
  • E/M Visits: Increase payment rates for office/outpatient E/M visits.
  • Telehealth: Add services to the Medicare telehealth list of services and make other changes to retain certain COVID-19 telehealth flexibilities.
  • Scope of Practice: Implement changes to enable health care professionals to practice at the top of their licenses.
  • Clinical Lab: Delay the next CLFS data reporting period for hospital outreach laboratories to report private payer data, and also eliminate cuts to CLFS payment in 2021.
  • SUPPORT Act: Implement provisions of the SUPPORT Act, including Medicare coverage for OTPs, screening for substance use disorder in Medicare physicals, and electronic prescribing of controlled substances.
  • MIPS Value Pathways: Defer implementing specific MIPS Value Pathways until at least 2022.
  • MIPS APM Performance Pathway: Implement a new MIPS APM Performance Pathway requiring all APMs to report the same six quality measures.
  • MSSP: Increase the minimum MSSP quality standard, align MSSP measures with APM Performance Pathways, and modify the definition of primary care used for beneficiary assignment.

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