Top 3 Concerns with the 2021 Medicare Physician Fee Schedule Rule

2021 Medicare Physician Fee Schedule Rule

Comments on the 2021 Medicare Physician Fee Schedule proposed rule centered on potential payment cuts, telehealth reimbursement, and quality reporting changes.

Provider groups are concerned that some proposals in the Medicare Physician Fee Schedule rule for 2021 would exacerbate the financial challenges physicians are already facing during the COVID-19 pandemic, including lack of adequate telehealth reimbursement and sustainable practice revenue.

The rule released in early August proposed several changes to Medicare Physician Fee Schedule next year, including steep payment cuts for some specialties, changes to the telehealth coverage list, and new quality reporting requirements.

Commenting on the proposed rule, however, provider groups called on CMS to reconsider the payment changes in order to support providers who saw practice revenue decrease by an average of 50 percent at the start of the pandemic.

“More than anything right now, our members need certainty,” said AMGA President and CEO Jerry Penso, MD, MBA. “CMS’ plan unfortunately would add yet another change into a system that is dealing with an upheaval in how care is provided.”

In order to support providers during the pandemic, AMGA and other provider industry groups made the following recommendations to CMS.


Chief among the rule’s proposals is an increase in relative value units (RVUs) – and reimbursement – for primary care services and chronic disease management. But in order to offset the changes to RVUs for the services, the rule also includes a reduction in the payment conversion factor to $32.26 from $36.09. The reduction would account for the budget neutrality adjustment for changes in relative value units (RVUs) as required by law.

While providers are generally supportive of increased investments in primary care and chronic disease management, the reduction would result in a 5.5 percent cut to physician payment in 2021, bringing total cuts to nearly 11 percent after accounting for other proposals in the rule, the American Medical Association (AMA) reported.

“Payment reductions of this magnitude would be a major problem at any time, but to impose cuts of this magnitude during or immediately after the COVID-19 pandemic, including steep cuts to many of the specialties that have been on the front lines in efforts to treat patients in places with widespread infection, is unconscionable,” the group stated in a comment letter to CMS.

The payment cuts would also impact certain specialties more than others, including those on the frontlines of the pandemic, such as anesthesiologists, critical care and emergency medicine providers, respiratory specialists, radiologists, and lab pathologists, the American Hospital Association (AHA) added in its own comment letter.

The hospital group said the cuts would be “a troubling way to treat those providers who have already sacrificed so much” and could impact private payer reimbursement rates, which are typically tied to the Medicare Physician Fee Schedule.

The groups urged CMS to work with Congress to waive budget neutrality for the upcoming fee schedule or at least mitigate the payment cuts for providers during the public health emergency.


Provider industry groups also urged CMS to strengthen telehealth coverage proposals in the final version of the 2021 Medicare Physician Fee Schedule.

The proposed rule included several policies that would expand telehealth coverage, including the addition of eight codes to the Category 1 list of telehealth services and the creation of a new Category 3 list that would provide temporary coverage expansions.

The consensus is that the proposals are a step in the right direction. However, providers are looking for more permanent flexibilities now that telehealth services have been turned on as a result of the public health emergency (PHE).

“CMS telehealth policy changes during the PHE enabled patients to get much needed care,” the AMA said. “Patients and physicians now understand the value and importance of telehealth. Consequently, the AMA urges CMS to continue to strengthen telehealth policies: making permanent several telehealth services, removing geographic and site of service barriers, and continuing to cover services through the end of the year following the year in which the PHE ends. These services should include audio only visits.”

Including audio-only visits is especially key considering existing telehealth adoption barriers in certain areas, argued several industry groups in comment letters to CMS.

“It has become clear that many patients do not have access to the devices or the broadband services necessary to receive care through video-based technology, such as a smartphone,” AMGA, one of those industry groups, stated. “For some patients, the choice is between an audio-only telephone call and no visit at all. Since then, our members have confirmed the importance of audio-only visit. A large number of patients simply do not have the means to access care if a video component is required.”

RVUs for audio-only codes should be comparable to telehealth and in-person services, the group contended. Meanwhile, America’s Physician Groups (APG) said the reimbursement rate should be higher than the typical communications technology-based service.


Quality reporting changes to the Quality Payment Program and other value-based reimbursement models was another major concern shared by leading provider industry groups. In particular, provider groups overwhelmingly opposed the replacement of the APM Scoring Standard with the new Alternative Payment Model Performance Pathway (APP).

CMS proposed the APP to facilitate the transition from the Merit-Based Incentive Payment System (MIPS) to alternative payment models (APMs). As part of that effort, the agency proposed to score APM participants using a smaller set of standard quality measures and sunset the CMS Web Interface for data collection in 2021.

The switch to the APP, however, would not improve quality care at this time, according to industry groups representing value-based providers.

The groups, which included the National Association of ACOs (NAACOS), Medical Group Management Association (MGMA), and Association of American Medical Colleges, urged CMS to postpone such significant changes to quality reporting during the pandemic.

“The timing of these changes is very concerning as ACOs continue to deal with the uncertainty that the COVID-19 Public Health Emergency (PHE) is bringing to the health care industry,” the groups stated in a joint comment letter. “Additionally, the expected delayed release of the final rule further reduces the amount of time ACOs and other Alternative Payment Models (APMs) will have to implement such changes.”

Industry groups also opposed the removal of the Web Interface reporting option and the new set of quality measures, which they argued would create a one-size-fits-all approach to quality reporting that creates more burden for providers.

“The APP would score MSSP ACOs on six quality measures; ACOs would be required to actively report on three measures. We are especially concerned with the fact that two out of the six of these measures are utilization measures, which raises concerns about the lack of diversification in the measurement set. Further, reducing the number of measures by this drastic an amount could put too much emphasis on any one particular measure,” AMGA added in its own comment letter.

Other concerns

Provider industry groups also raised other concerns with policies in the 1,353-page proposed rule. AMA, for example, also called for an increase in surgical global payments and the implementation and payment of the new CPT code 99072, which accounts for the measures providers have taken to stem the spread of COVID-19.

APG also advocated for the removal of the self-reported data restriction due to the realities of patients’ relationships with technology and the proposed incident-to regulations for pharmacist practice.

Meanwhile, value-based providers urged CMS to not finalize the elimination of the pay-for-reporting year currently provided to ACOs at the start of a Shared Savings Program contract.

As demonstrated by provider feedback, the Medicare Physician Fee Schedule has a wide reach and will significantly impact physician reimbursement. While concerns with the proposed rule for 2021 are equally wide-reaching, providers have agreed that CMS should consider the impact COVID-19 has had on providers before finalizing the fee schedule.

For More Information: top 3 concerns with the 2021 medicare physician fee schedule rule