What PALTC Practices Need to Know About The Impact of the Medicare Fee Schedule for 2021

After much anticipation, CMS has released the Medicare Physician Fee Schedule for 2021. While the new fee schedule brings extra support to office-based physician practices, this is not the case for other providers, including PALTC practices and providers.

The finalized fee schedule surprises many post-acute and long-term physicians and nurse practitioners as it reduces key support to those who care for the most vulnerable population in nursing facilities.

Conversion Factor Reduction

This year’s fee schedule does show a decrease in the conversion factor by $3.68, a 10.2% cut in payments for evaluation and management (E&M) services performed in skilled nursing, long term care and assisted living facilities, when compared to this year’s rates. This is the first decrease in conversion factor in 5 years, and, given its timing, has sounded some alarms for PALTC practices, nursing facility practitioners and post-acute physician advocacy groups.

This change, effective Jan 1, 2021, will impact upwards of 17,000 clinicians who practice in nursing homes alone, and more than 50,000 visits in nursing home billed to Medicare. In light of an already worsening pandemic, this cut will likely force many PALTC practices to make “hard choices” and take away from their ongoing efforts to support and provide quality, accessible care despite increased risks.

The Society for Post-Acute and Long Term Care Medicine (AMDA) has expressed its opposition to this decrease in conversion factor, deeming it “unconscionable” in a very critical time. Society Executive Director Christopher E. Laxton, CAE commented on this new fee schedule, “It is inexplicable, in light of the surging COVID-19 crisis, that CMS has chosen to impose this drastic cut on the very clinicians who, at great risk to themselves and their families, have been battling this deadly virus at ground zero for the past 9 months.”

“Far from offering support and encouragement to our dedicated practitioners, this instead delivers a wound that may very well prove to be unsustainable—with tragic consequences for our nation’s nursing home residents and their families,” he added.

Evaluation and Management Codes for Nursing Facilities

Payment reductions to evaluation and management codes used by physicians and practitioners in post-acute settings result from a recent assessment by CMS regarding nursing facility visits. In the fee schedule, CMS asserted that the rule “did not propose to treat and revalue nursing facility visits, domiciliary visits and home visits as analogous to office/outpatient E/M visits.” The Society for Post-Acute and Long Term Medicine disagrees with this assessment.

This, along with the budget neutrality requirement and the significant increase in E/M codes, resulted in a decrease in payments to nursing facility practitioners. As a result, evaluation and management services codes used in the office practice environment have seen a marked increase in payment while the codes designated for use in skilled nursing evaluation and management services have been decreased.

Telehealth and virtual services

CMS has finalized in the 2021 physician fee schedule nearly 60 new telehealth services to be covered after the COVID-19 health emergency ends. This is expected to provide for greater access to virtual services, which is crucial to providing care for some of the most vulnerable populations. The Domiciliary codes (CPTs 99336-99337) and Nursing facilities discharge day management codes (CPTs 99315-99316 have been added to this list.

Additionally, CMS created a new code for audio-only telephone services based on support from industry stakeholders who have leveraged telephonic care during the pandemic. The code accounts for 11 to 20 minutes of medical discussion to determine the necessity of an in-person visit and can be used throughout the calendar year in which the public health emergency ends.

CMS has also added a revision to the frequency requirements for subsequent nursing care services provided via telehealth services in the nursing home. Specifically, the final fee schedule altered the frequency limitation of telehealth visits from once in 30 days to once every 14 days.

Compared to the previous frequency limitation of one every 30 days, this new rule will serve to better manage patient care for those that are most susceptible to exposure to COVID-19. During the public health emergency (PHE), the frequency restrictions have been eliminated; however, they will return when the PHE is lifted. For post-acute long-term care practices, now is the time to begin designing practice workflows and leveraging technology to make the most out of these changes.

What to do next?

Overall, PALTC practices and physicians in post-acute long-term care can experience potentially as much as a 10% reduction to Medicare revenue in 2021. This has brought on grave concerns among the PALTC communities, and understandably a pressing matter coming into 2021. The Society for Post-Acute and Long Term Care Medicine (AMDA) and other advocacy groups have lobbied for Congress to reconsider pay decreases this year and to reevaluate statutory rules of budget neutrality. Meanwhile, PALTC practices can adopt strategic and operational changes to quickly adapt to this new rule and cover any potential revenue gap.

We can help your practice tailor measures to mitigate the negative impact of this new fee schedule and final rule changes. We are anxious to connect with you to start an assessment of your practice today.

Stay tuned for more updates regarding this topic.