2021 Physician Fee Schedule Raises Smiles, Frowns, Among Doctors

Primary care physicians are pleased they will be rewarded for the time and energy spent on evaluating and managing their patients, especially those with chronic conditions, per the 2021 Medicare Physician Fee Schedule (PFS), which became effective Jan. 1. But doctors who bill more surgical and procedural services and fewer E/M services have less to smile about.

The Centers for Medicare & Medicaid Services says the new fee schedule reflects the agency’s investment in primary care and chronic disease management and will cut some of the red tape traditionally associated with reimbursement. The rule also addresses telehealth and remote patient monitoring, and nails down new responsibilities for non-physician practitioners.

Under the schedule, some physician specialties will likely see a rise in Medicare reimbursement, including endocrinology, rheumatology, family practice and hematology/oncology. Other specialties, including anesthesia, emergency and surgery, won’t.

“The payment improvements will go a long way to helping physician practices over the next year as we continue to deal with COVID-19, and in the future,” said Jacqueline W. Fincher, M.D., MACP, president of the American College of Physicians, in a statement issued on Dec. 2, one day after CMS released the final schedule. “We need to ensure that practices across the country are able to continue to operate and provide frontline care in their communities.”

On the other hand, the American College of Surgeons said the new fee schedule “will harm patients and further destabilize a healthcare system already under severe strain from the COVID-19 pandemic.” The organization said that a survey it conducted in September showed that proposed payment cuts would harm patients by forcing doctors to make extremely difficult decisions, such as reducing Medicare patient intake, laying off nurses and administrative staff, and delaying investment in technology.

Since 1992, Medicare has paid for the services of physicians and other billing professionals under the Physician Fee Schedule. Payments are based on the relative resources typically used to furnish the service. Relative value units (RVUs) are applied to each service for physician work, practice expense, and malpractice. These RVUs become payment rates through the application of a conversion factor. Payment rates are calculated to include an overall payment update specified by statute.

To account for the increase in RVUs for E/M services and still maintain compliance with a budget neutrality adjustment, CMS decreased the 2021 conversion factor to $34.89, down $1.20 from the previous year’s conversion factor of $36.09.

Projected winners, losers from 2021 Medicare Physician Fee Schedule


Specialty                                            Impact

Endocrinology                                     14%

Rheumatology                                    13%

Hematology/oncology                      12%

Family medicine                                  12%

Nephrology                                         11%

Clinical social worker                          9%

Physician assistant                              9%

Nurse practitioner                               9%

General practice                                  8%

Psychiatry                                             8%

Interventional pain mgmt.                 8%

Clinical psychologist                           8%

Allergy/immunology                          8%

Urology                                                8%


Specialty                                            Impact

Anesthesiology                                   -1%

Vascular surgery                                  -1%

Cardiac surgery                                   -2%

Chiropractor                                        -2%

Interventional radiology                     -2%

Physical/occupational therapy          -2%

Pathology                                             -2%

Radiology                                              -3%

Nurse anesthetist/assistant                 -3%

Somewhere in between

Specialty                                            Impact

Obstetrics/gynecology                      7%

Pediatrics                                              7%

Internal medicine                                6%

Geriatrics                                              6%

Otolaryngology                                   6%

Podiatry                                                6%

Dermatology                                       5%

Cardiology                                           4%

Pulmonary disease                              4%

Gastroenterology                                2%

General surgery                                   0%

Source: American Medical Association. (For a complete list of specialties, see: American Medical Association)

Telehealth Expansion is Part of 2021 Fee Schedule

What COVID-19 kick-started, the Centers for Medicare & Medicaid Services endorsed in the 2021 Medicare Physician Fee Schedule, adding a list of reimbursable telehealth services.

“The American College of Physicians is pleased that CMS has made the expansion of telehealth a priority in the physician fee schedule,” says Brian Outland, the College’s director of regulatory affairs. “The flexibilities that were put in place earlier in the COVID-19 pandemic have been important for patients to access care, and important for physicians to keep their practices open and operating. Many physician practices have faced dire financial situations while we have been dealing with the COVID-19 pandemic. While telehealth visits won’t make up for that entirely, they do help to keep practices open and help patients who would avoid in-person visits to access care.”

Before the COVID-19 public health emergency (PHE), only 15,000 fee-for-service beneficiaries each week received a Medicare telemedicine service, according to CMS. Under a special waiver for the PHE in March 2020, Medicare was authorized to pay for office, hospital, and other visits furnished via telehealth, including those originating in patients’ places of residence. Preliminary data shows that between mid-March and mid-October 2020, over 24.5 million out of 63 million beneficiaries and enrollees received a Medicare telemedicine service.

Services added to the Medicare telehealth list in the 2021 Physician Fee Schedule include “domiciliary, rest home or custodial care services,” home visits with established patients, “cognitive assessment and care planning services,” and “visit complexity inherent to certain office/outpatient evaluation and management (E/M).” Additionally, CMS created a temporary category of criteria – called Category 3 – for services added to the Medicare telehealth list during the public health emergency that will remain on the list through the calendar year in which the PHE ends.

Despite some disappointment around CMS’ decisions regarding remote patient monitoring, the American Telemedicine Association believes that overall, the final rule is a positive step, says Kyle Zebley, director of public policy. “CMS has gone out of its way to think creatively.” Still, some roadblocks to fuller implementation of telehealth exist, he says. For example, CMS lacks the authority to permanently permit reimbursement for home-based telehealth. “As it stands, you have to be at a provider’s location in order to have reimbursable telehealth,” says Zebley. “That is an outdated law written decades ago, and it needs to be changed.” But only Congress, through legislation, can make that happen. Likewise, only Congress can change existing law that (but for the public health emergency) restricts reimbursable telehealth services to patients in defined rural geographic locations, he says. “Of course, we believe telehealth should be available to those in rural areas, but we also think the law should cover telehealth services for Medicare reci

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