ED Coding and Reimbursement Alert

Plus: The government has proposed expanding telehealth into 2021.

You’ll find good news and bad news in the proposed Medicare Physician Fee Schedule (MPFS), but the overall takeaway from the document could mean financial cuts for emergency departments nationwide.

Background: On Aug. 3, CMS issued its Calendar Year (CY) 2021 MPFS proposed rule. Though not as dense as last year’s behemoth, the 2021 proposal — at a hefty 1,350+ pages — is still chock full of surprises. Highlights include finalized updates on the much-anticipated E/M changes and many COVID-19-inspired policies related to telehealth and virtual care options. Plus, CMS also fleshes out past Quality Payment Program (QPP) promises, too. The proposed rule was published in the Federal Register on Aug. 17.

Check out four important details featured in the proposal.

1. Telehealth Expansion Impacts Only Part of the Code Set

The Medicare telehealth expansion has been a real benefit to many emergency departments. CMS published interim final rules in March and May that streamlined telehealth and gave clinicians more care options with a plethora of 1135 waivers in place as part of the public health emergency (PHE).

“Most of these regulatory flexibilities are set to sunset upon the expiration or termination of the PHE,” warns international law firm Dentons in online analysis.

Under the proposal, CMS would maintain an expanded list of Medicare-covered telehealth services and remote service flexibilities until the end of the calendar year in which the COVID-19 PHE ends, or in some cases beyond, and to clarify existing policies for remote services, the Dentons attorneys note.

A few of the telehealth-related proposed rule highlights include:

• Permanently add some services from the Medicare telehealth list.
• Create a temporary addition list through the PHE called “Category 3.”
• Cut frequency limits for skilled nursing facilities (SNFs).
• Permit direct supervision using real-time, interactive audio and video technology (excluding telephone that does not also include video) through Dec. 31, 2021.

Unfortunately for EDs, the proposal would only add some of the ED E/M codes to the list of allowable telehealth services in the future. While codes 99281-99283 (Emergency department visit for the evaluation and management of a patient …) would remain on the approved telehealth list through the end of the year in which the PHE expires, 99284 and 99285 would not.

“We are concerned that the full scope of service elements of these codes cannot be met via two-way, audio/video telecommunications technology as higher levels are indicated by patient characteristics, clinical complexity, urgency for care, and require complex decision-making,” CMS says in the proposal. “We also believe, due to the acuity of the patient described by these codes, that an in-person physical examination is necessary to fulfill the service requirements.”

2. EDs Could See Boost to E/M Pay

ED staff members may recall that last year, CMS boosted the relative value units (RVUs) for E/M codes 99281-99284. However, the agency kept 99285 pay static in 2020, noting that the time associated with the service was reduced.

But this year, that issue could be rectified. The American College of Emergency Physicians (ACEP) had pointed out to the agency that many of the physician office visit codes (99202-99215) will see work RVU boosts in 2021, and asked CMS for equity among ED codes. Fortunately, that request made it into the proposal.

Therefore, for codes 99283-99285, CMS has proposed work RVU increases as follows:

• 99283: 12.68 percent
• 99284: 5.38 percent
• 99285: 5.26 percent

Keep in mind that 2021 changes to the office-based E/M codes won’t affect emergency departments, but will benefit urgent care centers, which utilize the 99202-99215 code set.

3. Expect Lower Conversion Factor

In one of the more surprising CY 2021 proposals, CMS aims to cut the conversion factor (CF) by 10.61 percent. According to the rule, Section 101(a) of MACRA changed the way the CF is calculated; plus, the office/outpatient E/M payment rate changes influenced the agency’s decision to reduce the CF.

“With the budget neutrality adjustment to account for changes in [relative value units] RVUs, as required by law, the proposed CY 2021 PFS conversion factor is $32.26, a decrease of $3.83 from the CY 2020 PFS conversion factor of $36.09,” CMS indicates.

Public outcry: As expected, industry organizations are rattled by the major CF dip, especially in the midst of COVID-19 spikes. Backing up cash-strapped providers, the American Medical Association (AMA) urged Congress to get involved before the final rule is released later this year.

“The AMA appreciates that CMS will implement significant increases to the payment for office visits, based on recommendations on resource costs from the AMA/Specialty Society RVS Update Committee (RUC),” acknowledged AMA President Susan R. Bailey, MD in a statement. “Unfortunately, these office visit payment increases, and a multitude of other new CMS proposed payment increases, are required by statute to be offset by payment reductions to other services, through an unsustainable reduction of nearly 11 percent to the Medicare conversion factor.”

Bailey added “For this reason, the AMA strongly urges Congress to waive Medicare’s budget neutrality requirement for the office visit and other payment increases. Physicians are already experiencing substantial economic hardships due to COVID-19, so these pay cuts could not come at a worse time.”

4. Overall Result Could Hurt EDs

Despite the increases in pay for some of the ED E/M codes, the impact of the lower conversion factor is expected to result in a 6 percent decrease in pay for emergency department providers, according to CMS’ “Estimated Impact on Total Allowed Charges by Specialty” chart, on page 898 of the proposal.

ACEP President William P. Jaquis, MD, sent a letter to Congress on August 4, urging lawmakers to avert these cuts and offer relief to already-struggling emergency departments. “As EDs across the United States continue to bear the brunt of the COVID-19 pandemic, the proposed PFS presents an existential threat for emergency physicians already facing a number of substantial financial challenges,” Jaquis said in the letter. “For many EDs, patient volumes have decreased by more than 40 percent (and as much as 60 percent, in some cases) as patients defer necessary emergency care or avoid the ED altogether due to concerns about contracting the coronavirus.”

Comment period open: CMS will accept comments on the proposed rule until 5 p.m. on Oct. 5, 2020.

Resource: Review the PFS proposals at https://s3.amazonaws.com/public-inspection.federalregister.gov/2020-17127.pdf.