CMS Releases CY 2021 Physician and Hospital Outpatient/Ambulatory Surgical Center Final Rules

On Tuesday, December 1, the Centers for Medicare and Medicaid Services (CMS) released the CY 2021 Medicare Physician Fee Schedule (PFS) and Quality Payment Program (QPP) final rule [CMS-1734-F, 1734-IFC] and on Wednesday, December 2, CMS released the CY 2021 Changes to Hospital Outpatient Prospective Payment and Ambulatory Surgical Center Payment Systems final rule [1736-FC, 1736-IFC].

CY 2021 PFS Final Rule

CMS finalized a 10% payment cut and expanded telehealth services in the CY 2021 PFS final rule. The final rule includes a significant payment increase for office/outpatient Evaluation and Management (E/M) services, typically delivered by primary care providers and certain specialty physicians. To offset the increased spending resulting from these payment increases, the rule finalizes an unusually large and controversial budget neutrality adjustment, resulting in a physician conversion factor (CF) of $32.4085 for CY 2021, a 10.20% decrease from the 2020 CF of $36.0896. In 2021, MIPS participants will also be subject to a payment adjustment ranging from +1.79 to -7% based on their performance 2019 performance in MIPS.

The impact of this policy varies significantly across specialties depending on their utilization of office visits. Physician specialty societies and other healthcare stakeholders are vigorously pressing Congress to act to avert the cuts. Currently, bills are pending in Congress that could avert this payment cut. Days after the final rule was released, a letter expressing support for addressing the upcoming physician cuts signed by 50 senators was issued. Resolution of this issue, like many others this year, will be an uphill battle.

This final rule will be effective January 1, 2021, unless otherwise noted.

A more detailed summary of the final rule is available HERE.

CY 2021 OPPS/ASC Final Rule

For CY 2021, CMS increased payment rates under the Hospital Outpatient Prospective Payment System (OPPS) and the ASC Payment Systems by a factor of 2.4%. Hospitals and ASCs that fail to meet quality reporting program requirements are subject to a 2.0% reduction to the update factor. CMS estimates, based on the finalized policy changes, that total payments to hospitals and ASCs will be approximately $83.9 billion and $5.42 billion, respectively, for an increase of approximately $7.5 billion and $120 million, respectively, over CY 2020 program payments.

While CMS finalized these slightly higher payment rates, several other policies will be of concern for hospitals and surgery centers. For example, this rule finalizes policies that seek to eliminate the site of service barriers for surgical procedures and continues to address site neutrality reforms and payments under the 340B drug discount program.

This final rule will be effective January 1, 2021, unless otherwise noted.

A more detailed summary of the final rule is available HERE.

 


For more information, contact Jennifer Archer, Paul Gerrard, Deborah Godes, Kelsey Haag, Sheila Madhani, Mara McDermott, Kristen O’Brien, Jessica Roth and Christine Song.