CMS Releases 2021 Medicare Physician Fee Schedule Final Rule

December 3, 2020

2021 Medicare Physician Fee Schedule (PFS) Final Rule
December 1, 2020, the Centers for Medicare & Medicaid Services (CMS) released the 2021 Medicare Physician Fee Schedule (PFS) Final Rule, which includes final policy changes to the Quality Payment Program (QPP) for 2021.

CMS chose to move forward with adoption of the new coding structure for the office/outpatient evaluation and management (E/M) codes as recommended by the AMA, as well as the RUC-recommended values.

Conversion Factor

  • The 2021 MPFS finalized conversion factor is $32.4085, a 10.2% decrease from 2020’s $36.0896.
  • The 2021 Anesthesia conversion factor will be set at $20.0547, a 9.7% decrease from the 2020 conversion factor of $22.2016.

As expected and explained, in the August 2020 Proposed Medicare Rule summary, the significant decrease in the conversion factors is the result of CMS moving forward with the adoption of the new coding structure for the office/outpatient evaluation and management (E/M) codes. In order to maintain budget neutrality with these valuation increases, the Final 2021 conversion factors are significantly reduced.

As CMS did not address the negative reimbursement impact these E/M changes will have on many specialties, Congress must enact legislation if these provider cuts are to be averted.

Zotec Advocacy Efforts to Prevent Reimbursement Cuts
Zotec Partners has been actively lobbying on this issue for months. Since August, we have held numerous meetings, calls with elected officials and officials in the administration, as well as sent out a call to action, which generated 1000 advocates sending over 3100 emails.

On December 1, we sent out a call to action to urge Senators to cosign a letter to Senate leadership urging them to address the proposed deep Medicare cuts that are currently set to take effect on January 1, 2021. That letter goes to Senate leadership today, December 2.

There is still time to have your voice heard! Please go to and take immediate action.

CMS estimates an overall impact to allowed charges from MPFS final changes as follows:

  • Anesthesiology: -8%
  • Diagnostic Radiology: -10%
  • Interventional Radiology: -8%
  • Diagnostic Testing Facility: -3%
  • Emergency Medicine: -6%
  • Critical Care: -7%
  • Nuclear Medicine: -8%
  • Pathology: -9%
  • Radiation Oncology/Therapy Centers: -5%
  • Physician Assistants: +8%
  • Nurse Practitioners: +7%

Sequestration Cuts May Be Restored
In addition to the 2021 Medicare PFS schedule cuts noted above, the -2% sequestration reductions on Medicare expenditures across the board were delayed with the passage of the CARES Act in March 2020 but only until December 31. Without Congressional intervention during the “Lame Duck” Congress, each specialty noted above will incur additional cuts of -2% as of January 1, 2021.

Highlights of the MPFS Final Rule
Payment for Evaluation and Management (E/M) Services – Finalized for 2021:

  • CMS is moving forward to adopt the new coding structure for the office/outpatient evaluation and management (E/M) codes as recommended by the AMA, as well as the RUC-recommended times and work values.
  • Retain 5 levels of coding for established patients, reduce the number of levels to 4 for office/outpatient E/M visits for new patients, and revise the code definitions.
  • Revise the times and medical decision-making process for all the codes and requires performance of history and exam only as medically appropriate.
  • Allow clinicians to choose the E/M visit level based on either medical decision making (MDM) or time.
  • Implementing a single add-on code describing the work associated with visits that are part of ongoing, comprehensive primary care and/or visits that are part of ongoing care related to a patient’s single, serious, or complex chronic condition.
    • That add on code was previously denominated as “GPC1X”; and
    • CMS has now characterized it as “G2211”.

Supervision of Diagnostic Tests by Certain Nonphysician Practitioners (NPPs)

  • CMS is finalizing its proposal to permanently allow nurse practitioners (NPs), clinical nurse specialists (CNSs), physician assistants (PAs) and certified nurse midwives (CNMs) to supervise the performance of diagnostic tests in addition to physicians.
    • CMS will defer to state laws for NPP scope of practice and supervision requirements going forward, as well as;
    • Maintaining required statutory relationships with supervising or collaborating physicians.

Telehealth and Supervision
Due to the public health emergency (PHE), CMS adopted an Interim Final Policy to revise the definition of direct supervision to include virtual presence of the supervising physician or practitioner using audio/video real-time communication technology. CMS finalized their proposal to extend this policy through December 31, 2021 or the end of the calendar year in which the PHE ends, whichever is later.

PFS Payment for Services of Teaching Physicians – CMS is permanently extending a policy instituted during the COVID-19 PHE that allows teaching physicians to supervise residents remotely using telehealth (audio-visual) equipment.

Expanded Telehealth Coverage
CMS finalized their proposal to add 9 services to the Medicare telehealth services list on a Category 1 basis for 2021. CMS finalized their proposal to create a third category of criteria for adding services to the Medicare telehealth services list on a temporary basis:

  • Category 3 will include the services that were added during the PHE for which there is likely to be clinical benefit when furnished via telehealth, but for which there is not yet sufficient evidence available to consider the services as permanent additions under Category 1 or Category 2 criteria.
  • Any service in Category 3 will remain on the telehealth services list through the later of the end of the calendar year in which the PHE ends or December 31, 2021.
  • CMS finalized over 60 services to the Medicare telehealth list under Category 3.

2021 Quality Payment Program MIPS Value Pathways:
While CMS is moving forward with MIPS Value Pathways (MVPs) policy development, proposals for initial MVPs is delayed until at least the 2022 performance year.

  • CMS states that, MVPs will allow for a more ‘cohesive participation experience’ through overarching activities and measures across categories that are relevant to specific conditions or specialties, and that MVP policies will reduce MIPS reporting burden and inefficiencies.
  • CMS also states, MVPs would be incrementally added to the QPP, upon availability. Their intention is to continue to support eligible clinicians’ participation in ‘traditional’ MIPS.

Finalized MIPS Performance Thresholds and Category Weights Performance Thresholds:

  • Performance Threshold – to avoid a penalty, of up to -9%, and attain a 0% Payment Adjustment – 60 points (up from 45 points in 2020). This is an increase from the Threshold in the Proposed Rule of 50 points.
  • Exceptional Performance Threshold – remains at 85 points (same as 2020) to be eligible for the $500 million pool.

Quality Data Completeness Requirements:
The data completeness requirement for quality measures remains at 70 percent. This number defines the minimum subset of patients within a measure denominator that must be reported.

2021 Category Weights:

  • Quality: 40% (5% decrease from PY 2020)
  • Cost: 20% (5% increase from PY 2020)
  • PI: 25% (no change from PY 2020) – For Non-patient Facing Groups (NPF) the PI category will again be reweighted to Quality.
  • IA: 15% (no change from PY 2020)

By law, the Cost and Quality performance categories must become equally weighted at 30% by the 2022 performance period.

2021 Performance Period Scoring
2021 Quality Benchmarks:

In the Proposed Rule CMS stated they planned to use performance period benchmarks rather than historical benchmarks for the 2021 performance year out of concern that the COVID-19 PHE could skew benchmarking results.

  • In the Final Rule CMS decided against this proposal due to pushback received during the comment period.
  • The 2021 performance year will be scored against historical benchmarks as usual.
  • Benchmarks should be published, but no date was given as to when they will be available.

Topped out Measures:
CMS will continue their methodology of capping measures at 7 points (out of a possible 10) if they have been topped out for two or more performance years but will adjust the score if the measure ceases to be topped out upon completion of data submission for the current performance year.

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