Medicare Compliance & Reimbursement

Plus: E/M payment and documentation updates finalized.

After Medicare’s epic twists and turns over the past year, it should come as no surprise that the feds’ latest release is chock full of highs and lows. Many longstanding policy promises have been fulfilled, but providers may find their hopes dashed on others — and their bottom lines slashed. Read on for the details.

Context: On Nov. 30, the Centers for Medicare & Medicaid Services (CMS) released its calendar year (CY) 2021 policy and reimbursement opus, the Medicare Physician Fee Schedule (MPFS) final rule. Scheduled for publication in the Federal Register on Dec. 28, the 1,994-page policy behemoth ranges from updates on the COVID-19-inspired telehealth expansion to E/M policy clarifications and everything in between.

Take a Look at Finalized E/M Changes

CMS settled its long-awaited office/outpatient E/M documentation guidelines as well as payment rate increases for these codes. The feds made these changes to address providers’ burdens, streamline services, and boost pay for face-to-face E/M office visits.

“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,” maintains CMS Administrator Seema Verma in a release. “In the past, the system has rewarded interventions and procedures over time spent with patients — time taken preventing disease and managing chronic illnesses.”

Details: In 2021, you’ll use either medical decision-making (MDM) or time to choose a level of service when selecting E/M office visit codes. That means, for code selection purposes, you can ignore the history and exam elements that have long defined E/M codes.“The clinically outdated system for number of body systems/ areas reviewed and examined under history and exam will no longer apply, and the history and exam components will only be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 explains in the rule. “We continue to believe these policies will further our ongoing effort to reduce administrative burden, improve payment accuracy, and update the O/O [office/outpatient] E/M visit code set to better reflect the current practice of medicine.”

Conversion factor: In coordination with the E/M revamp — and to the chagrin of many — CMS decided to follow through on its proposal to chop the conversion factor by a staggering 10.6 percent (see story p.4).

“This negative adjustment results from a statutorily mandated budget neutrality adjustment to account for changes in work relative value units (RVUs),” explains Miranda Franco, senior policy advisor with Holland & Knight LLP in Washington D.C., in online analysis. “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,” she says.

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

Telehealth Remains Front and Center in 2021 Policies

COVID-19 and the expansion of Medicare telehealth services also factored heavily in many of the MPFS’ finalized and future policies. For example, the agency determined which temporary codes it would make permanent from those added during the COVID-19 PHE to the Medicare telehealth services list.

Even before the coronavirus threw healthcare for a loop, telehealth was a Medicare priority, according to Verma. “The pandemic accentuated just how transformative it could be, and several months in, it’s clear that the healthcare system has adapted seamlessly to a historic telehealth expansion that inaugurates a new era in healthcare delivery,” she says.

Here’s a short list of the telehealth services highlights:

New services: The MPFS finalized several new services to the Medicare telehealth services list. “The new services will allow Medicare beneficiaries to have greater access to telehealth, with a particular focus on residents of rural areas, even after the COVID-19 public health emergency ends,” explains partner attorney Eric D. Fader of Rivkin Radler LLP in the Rivkin Rounds health blog.

Category 3: The final rule created “Category 3” to deal with temporary code additions to the Medicare telehealth list added during the COVID-19 PHE and “through the calendar year in which the PHE ends,” a CMS fact sheet notes.