The proposed rule was published in the Federal Register on August 17 and the deadline to submit comments was October 5. To view the proposed rule, please click HERE. CMS filed the final rule with the Office of the Federal Register on December 2, and it is scheduled for official publication on December 28. To view the final rule as filed by CMS, please click HERE.

The OrthoForum submitted a comment letter to CMS on September 30. To view the comment letter, please click HERE. The letter (signed by Dr. Richard Bruch) provided comments focused on the proposed payment cuts under the physician fee schedule (PFS) for orthopaedic surgery, physical therapy, and occupational therapy. The letter also provided comments concerning the proposal to make permanent some of the telehealth flexibilities that have been authorized during the coronavirus public health emergency. These telehealth-related comments, as well as certain comments concerning the proposed payment cuts for physical therapy and occupational therapy, are discussed in the physical therapy section.

The payment cuts proposed for CY 2021 flow largely from the decision of CMS to increase payments for evaluation and management (E/M) office/outpatient visits for primary care and certain other specialties. CMS, however, believes that this increase alone is insufficient and therefore provided for an additional increase through an add-on code (GPC1X).

The OrthoForum comment letter noted that CMS did not follow the AMA RUC recommendation on RVU changes for E/M visits included in the global surgical package (which would have been beneficial), even though the agency did make the recommended changes for some global codes, such as monthly end-stage renal disease and bundled maternity care. The letter stated that this action by CMS, and the decision to provide the add-on code, may be inconsistent with the “no variation” provision of the Medicare statute because it would result in some physicians being paid less than others for E/M visits.

The payment increase for primary care and certain other specialties come at the expense of most other specialties, as their payments would be cut because of PFS budget-neutrality requirements. The comment letter stated that the proposed cut in the conversion factor is 10.6 percent, which will result in substantial payment reductions for most specialties. The letter continued, “In fact, the 2021 conversion factor may be the lowest one ever. For example, the 1994 conversion factor was higher. It was $32.9050, although that dollar amount does not indicate the true scope of what CMS is proposing, as that 1994 conversion factor would be $58.02 in today’s dollars. Therefore, adjusted for inflation, the proposed 2021 conversion factor [of $32.2605] is about 56 percent of the 1994 conversion factor. . . . Orthopaedic surgery will face an estimated cut of 5 percent, and physical therapy/occupational therapy will face an estimated cut of 9 percent. According to Table 90 [in the proposed rule], approximately 61 percent of specialties will face cuts.”

The letter forcefully criticized CMS for these proposed cuts, quoting an AMA-led letter of more than 100 medical organizations that was sent to HHS Secretary Alex Azar on July 1: “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 OrthoForum letter also quoted bipartisan letters from Members of Congress to the House leadership that the proposed cuts are “reckless” and “drastic”.

The letter concluded that “it is the leadership [of CMS] who is accountable to the public for this decision and will be held responsible for the negative consequences” and that “we urge CMS to set an implementation schedule that will minimize negative effects on medical professionals and their patients.”

Turning to the final rule filed on December 2, it made no significant changes on these issues despite intense opposition to the proposed cuts from many medical organizations and a significant number of Members of Congress. The final rule kept the cuts for most providers and the increases for primary care and certain other specialties, including the add-on code (GPC1X). Table 106 in the final rule provides an updated estimate of the payment changes. The estimated cut for orthopaedic surgery is 4 percent (down from 5 percent), and the estimated cut for physical therapy and occupational therapy continues to be 9 percent. The conversion factor was increased slightly from the proposed rule—32.2605 to 32.4085—but this is still a 10.2 percent reduction from the 2020 conversion factor of 36.0896.

The final rule kept the provisions of the proposed rule that increased payment for some global codes on the basis of their E/M components but did not provide such an increase for the global surgical codes. The final rule apparently does not directly address the issue that it may be inconsistent with the Medicare statute to pay some physicians less than others for E/M visits.

The CMS Administrator, Seema Verma, reportedly stated that the cuts made by the final rule are routine, as every year there are pluses and minuses. She also indicated that the coronavirus emergency is unrelated to the payment changes, saying that the emergency is a short-term issue being addressed by the Provider Relief Fund under the CARES Act, while the payment changes made by the final rule will have a long term effect on the entire health system.

House Bills Would Address PFS Payment Cuts

Two House bills are of interest. One would offset the PFS payments cuts for two years. This bipartisan legislation is the Holding Providers Harmless From Medicare Cuts During COVID–19 Act of 2020 (H.R. 8702). The bill, introduced on October 30, 2020, by Reps. Ami Bera (D-CA) and Larry Bucshon (R-IN) (both physicians), currently has 97 cosponsors (50 Democrats and 47 Republicans). These include Rep. Fred Upton (R-MI), the former Republican chair of the Energy & Commerce Committee (2011-2017), and Rep. Diana DeGette (D-CO), the current chair of that Committee’s oversight subcommittee. The bill appears to have some momentum, as the majority of cosponsors signed on during the last half of November and more than 40 have signed on thus far in December.

The OrthoForum Advocacy Committee is coordinating with AAOS to support the bill. For 2021 and 2022, it provides supplemental payments to providers whose Medicare reimbursement would be cut under the PFS final rule, including orthopaedic surgeons, physical therapists, and occupational therapists. The supplemental payments would be the amount necessary to offset the cuts. In other words, the bill would ensure that the 2020 payment level is maintained. Certain E/M codes would be excluded. These exclusions, however, concern codes for which payment would be increased somewhat for 2021; therefore, excluding these codes, together with the supplemental payments, maintains the 2020 payment level for the relevant providers. Importantly, the exclusions also provide for a lower budget score from the Congressional Budget Office.

The excluded codes are as follows:

• The new add-on code GPC1X (which is only for primary care and certain other specialties);
• New patient codes 99202-99205, and established patient code 99211, when billed along with the new add-on code; and
• Established patient codes 99212-99215 (whether or not billed along with the new add-on code).

It must be emphasized that this bill would not have any effect on the provisions of the PFS final rule that would increase E/M payments for primary care and certain other specialties, and that would also provide the add-on code GPC1X. In other words, if the bill is enacted, those providers would still receive the same payment level as provided for under the PFS final rule. Under that rule, those providers will see significant increases above the 2020 payment level. Again, the bill is intended to assist providers whose payment level would otherwise be lower than the 2020 level.

The other bill is H.R. 8505, which would waive the PFS budget-neutrality requirements for one year. This bipartisan bill, introduced on October 2, 2020, by Reps. Michael Burgess (R-TX) and Bobby Rush (D-IL), currently has 8 cosponsors (four Democrats and four Republicans). Rep. Burgess is a physician and one of the top Republicans on the Energy & Commerce Committee. Rep. Rush is one of the top Democrats on that Committee, and he was a leader in putting together the bipartisan letters to the House leadership urging action to stop the cuts. In the weeks following the release of the PFS proposed rule, waiving the budget-neutrality requirements was a temporary solution often mentioned in discussions about how to respond to the cuts. This Burgess-Rush bill was introduced approximately a month before the Bera-Buchson bill (H.R. 8702). Of the seven cosponsors of the Burgess-Rush bill who signed on after the bill’s introduction on October 2, only one cosponsor signed on during November and none have signed on thus far in December.

The proposed rule was published in the Federal Register on August 12 and the deadline to submit comments was October 5. To view the proposed rule, please click HERE. CMS filed the final rule with the Office of the Federal Register on December 4, and it is scheduled for official publication on December 29. To view the final rule as filed by CMS, please click HERE.

The proposed rule raised a number of very important issues, which are worth discussing in some detail. The OrthoForum submitted a comment letter to CMS on October 5. To view the comment letter, please click HERE. The letter (signed by Dr. Richard Bruch) provided comments concerning the proposal to eliminate the inpatient only list, the proposal to create additional prior-authorization requirements, and the proposal to allow certain physician-owned hospitals more flexibility under the Stark Law.

The portions of the comment letter concerning the elimination of the inpatient only list are discussed below in this section (other than the portions specifically concerning ASCs), as are the portions concerning additional prior-authorization requirements. The portions of the letter concerning ASCs are discussed in the ASC section, and the portions concerning physician-owned hospitals (POHs) are discussed in the POH section.

Regarding the proposal to eliminate the inpatient only (IPO) list, the OrthoForum comment letter quoted from the proposed rule that the intention of CMS is that the physician’s “clinical knowledge and judgment, together with consideration of the beneficiary’s specific needs” should be the controlling factor. The letter stated, however, that the OrthoForum is concerned this may be aspirational to some extent, given the dynamics that exist in actual practice. Specifically, the elimination of the IPO list means that the two-midnight rule (TMR) will apply to all surgeries. The letter continued that “the TMR in actual practice means that outpatient status is the default position because hospitals want to avoid the risk of audits. Our concerns are supported by experience with the removal of total knee arthroplasty (TKA) from the IPO list. . . . CMS apparently will remove all 266 musculoskeletal procedures at once, on January 1, 2021. This mass shift from the inpatient setting to the outpatient setting will likely cause widespread confusion for physicians and patients. . . . The fundamental point is that, to the extent physicians do not in actual practice have full authority to decide whether their patients should undergo procedures on an inpatient basis, there is a potential that patients undergoing complicated procedures will experience outpatient status when there is not sufficient data to support that this is in their best interest.”

Turning to the final rule filed by CMS on December 4, CMS finalized its proposal to require prior authorization for cervical fusion with disc removal, and for implanted spinal neurostimulators, in the outpatient setting. The agency also acknowledged that many commenters have concerns about prior-authorization requirements in general, but the agency is not changing is approach. It first clarified that the process it is establishing specifically relates to Medicare Fee-For-Service, not Medicare Advantage. The agency continued:

[W]e believe that we have structured the Medicare Fee-For-Service prior authorization processes to effectively account for concerns associated with processing timeframes, patient care, and other administrative concerns. . . . We recognize apprehension resulting from problems with prior authorization in other settings related to burden, cost, and patient access, but as with our other Medicare Fee-For-Service prior authorization processes, we believe that the Hospital OPD prior authorization process will not have these problems. We have established timeframes for contractors to render decisions on prior authorization requests, as well as an expedited review process when the regular review timeframe could seriously jeopardize the beneficiary’s health, that we believe will enable hospitals to receive timely provisional affirmations. Additionally, we note that our prior authorization policy does not create any new documentation or administrative requirements.

With respect to the IPO list, CMS finalized its decision to eliminate it over a three-year period, and to remove all 266 musculoskeletal procedures as of January 1, 2021. The agency explained:

[We have] acknowledged the seriousness of the concerns regarding patient safety and quality of care that various stakeholders have expressed regarding removing procedures from the IPO list or eliminating the IPO list altogether. . . . However, we stated that we believe that the evolving nature of the practice of medicine, which has allowed more procedures to be performed on an outpatient basis with a shorter recovery time, in addition to physician judgment, state and local licensure requirements, accreditation requirements, hospital conditions of participation (CoPs), medical malpractice laws, and CMS quality and monitoring initiatives and programs will continue to ensure the safety of beneficiaries in both the inpatient and outpatient settings, even in the absence of the IPO list.

Regarding the applicability of the 2-midnight rule, CMS acknowledged concerns about the outpatient setting becoming the default rule, but defended its position:

CMS has repeatedly recognized that the decision regarding the most appropriate care setting for a given surgical procedure is a complex medical judgment made by the physician based on the beneficiary’s individual clinical needs and on the general coverage rules requiring that any procedure be reasonable and necessary. We continue to believe that deference should be given to physicians and medical professionals in these determinations. . . . It is a misinterpretation of CMS payment policy for providers to create policies or guidelines that establish the outpatient setting as the baseline or default site of service for a procedure based on its removal from the IPO list or the elimination of the IPO list.

The agency also declined to issue any guidance on when procedures should be performed in the inpatient setting because, under section 1801 of the Medicare statute, “CMS does not control or supervise the practice of medicine or the manner in which medical services are provided.”

The agency noted that it will continued the policy adopted in CY 2020 to provide an exemption from certain medical review activities related to the 2-midnight rule for procedures that have recently been removed from the IPO list:

Specifically, while inpatient claims for procedures that have been removed from the IPO list may be reviewed by the BFCC-QIOs for purposes of providing education to practitioners and providers on compliance with the 2-midnight rule, those claims identified as noncompliant will not be denied for such noncompliance within the first 2 calendar years of their removal from the IPO list.

As to finalizing the removal of musculoskeletal procedures from the IPO list, CMS noted the reasons it provided in the proposed rule:

[W]e proposed that musculoskeletal services would be the first group of services that would be removed from the IPO list. We stated that we believe it is appropriate to remove this group of services first for several reasons. In recent years, due to new technologies and advances in surgical care protocols, expedited rehabilitation protocols, and significant enhancements to postoperative processes we have removed TKA and THA, which are both musculoskeletal services, from the IPO list.

Therapy Services Virtual Seminar

The OrthoForum held a virtual therapy meeting on November 10. It included a session describing the efforts that have made during 2020 concerning Medicare telemedicine authorities and concerning the proposed payment cuts (see the discussion below on the PFS proposed rule). The virtual meeting discussed how therapists can get involved in our advocacy efforts. It was emphasized during the meeting that no experience is required to get involved—simply write Renee Duncan, the chair of the Physical Therapy Subcommittee (contact information provided at the end of this section).

Comment Letter on Proposed Rule for Medicare Physician Fee Schedule for CY 2021

As noted in the section on general policy issues, the proposed rule was published in the Federal Register on August 17 and the deadline to submit comments was October 5. To view the proposed rule, please click HERE. CMS filed the final rule with the Office of the Federal Register on December 2, and it is scheduled for official publication on December 28. To view the final rule as filed by CMS, please click HERE.

The OrthoForum submitted a comment letter to CMS on September 30. To view the comment letter, please click HERE. As noted in the section on general policy issues, the letter (signed by Dr. Richard Bruch) provided comments focused on the proposed payment cuts under the physician fee schedule (PFS) for orthopaedic surgery, physical therapy, and occupational therapy. The letter also provided comments concerning the proposal to make permanent some of the telehealth flexibilities that have been authorized during the coronavirus public health emergency. These telehealth-related comments, as well as certain comments concerning the proposed payment cuts for physical therapy and occupational therapy, are discussed in this section. The other portions of the letter are discussed in the section on general policy issues.

With respect to telemedicine, the comment letter included the following: “The OrthoForum appreciates that the Proposed Rule would make permanent some of the telehealth flexibilities that were authorized under the CARES Act and section 1135(b)(8) of the Social Security Act (SSA). We strongly support making permanent the telehealth flexibilities that were authorized for physical therapists and occupational therapists and their assistants, but we recognize that changes to the Medicare statute are likely necessary to achieve that goal.”

The letter noted that the emergency telehealth flexibilities authorize physical therapists and occupational therapists to provide telehealth services and to delegate maintenance therapy services to their assistants. The letter continued, “Once the Secretary of Health and Human Services terminates the declaration of a coronavirus public health emergency, however, the scope of telehealth services in the Medicare program will once again be governed by SSA section 1834(m). Subsection (m) authorizes telehealth services for physicians and ‘practitioners’, which is defined in a manner that excludes physical therapists and occupational therapists and their assistants.”

Given the need for legislation, the letter concluded, “The OrthoForum supports legislation that would amend section 1834(m) to establish permanent authority for physical therapists and occupational therapists and their assistants to provide telehealth services. This authority would be truly permanent in that it would not be conditioned on the existence of a national emergency or on CMS granting a waiver. The legislation would specify particular Medicare billing codes that apply to physical therapy and occupational therapy and provide that, for those codes, telehealth geographic limitations would not apply.”

Although not expressly mentioned in the comment letter, a bill in Congress supported by the OrthoForum would provide the scope of telemedicine authority described in the letter. This legislation is the Outpatient Therapy Modernization and Stabilization Act (H.R. 7154). This bipartisan House bill, introduced on June 11, 2020, by Reps. Brendan Boyle (D-PA) and Vern Buchanan (R-FL), currently has 14 cosponsors (13 Democrats and 1 Republican). These include Rep. Carolyn Maloney (D-NY), the chair of the House Oversight Committee.

The comment letter stated that the OrthoForum is “concerned about the effects of the proposed cuts on physical therapists and occupational therapists and their assistants, who are integral to orthopaedics. These health professionals are widely utilized within the U.S. healthcare system to address a variety of conditions prevalent in the Medicare patient population, such as post-operative surgical conditions, musculoskeletal conditions, and arthritis, among others. Many OrthoForum physician group practices (PGPs) participate in programs with incentives to provide value-based care, rather than using a procedure-by-procedure, fee-for-service approach. Physical therapists and occupational therapists and their assistants have a central role in value-based care. For example, OrthoForum PGPs know that these therapists, together with patient navigators, can assist physicians in improving outcomes for hip and knee replacements and in achieving saving of approximately $1,000 per episode. Physical therapists and occupational therapists and their assistants work with physicians to optimize patients for surgery (managing weight, blood pressure, nutrition, and other health factors); reducing or eliminating the need for a stay at a rehabilitation facility; and facilitating a more rapid recovery from the surgery.”

With respect to making the new emergency telemedicine flexibilities permanent, the final rule appears to analyze the situation in the same way as the OrthoForum comment letter. Specifically, the final rule states that (1) at the conclusion of the coronavirus public health emergency, the authority of the agency will once again be limited by SSA section 1834(m), and (2) physical therapists and occupational therapists are not “practitioners” within the meaning of that statutory provision; therefore, CMS does not have the authority to add their services to the Medicare telehealth services list.

The final rule, however, does make a change related to the coronavirus emergency that is beneficial. Rather than the telehealth flexibilities for physical therapists and occupational therapists expiring immediately upon the conclusion of the emergency, the flexibilities will continue until the end of the year in which the emergency expires. The final rule accomplishes this policy by creating a new telemedicine “Category 3” for telehealth services that were first allowed during the emergency and for which CMS believes there is likely to be clinical benefit, but for which there is not yet sufficient evidence to include them in Category 1 or 2. These latter two categories concern telehealth services that the public has requested be added to the Medicare telehealth services list (TSL). Category 1 is for requests to add telehealth services that are similar to services already on the TSL and are similar in terms of the telecommunications systems that are used to deliver the services. Category 2 is for requests to add telehealth services that are not similar to those on the TSL, and therefore CMS will consider evidence presented to demonstrate that the requested services provide a clinical benefit. (The final rule provides examples of clinical benefit.) CMS considers these requests and then makes a decision through notice-and-comment rulemaking on whether to add them to the TSL.

The final rule includes a Table 16 of services being added to the TSL. This table includes physical therapy and occupational therapy, although the addition is temporary because they are in Category 3. The specific codes are CPT 97161- 97168; CPT 97110, 97112, 97116, 97535, 97750, 97755, 97760, 97761, 92521- 92524, and 92507.

In addition, the final rule states that CMS is finalizing its interim policy (from the May 8th COVID-19 interim final rule) to allow physical and occupational therapists to delegate maintenance therapy services to therapy assistants as clinically appropriate through the end of the coronavirus public health emergency (but not through the end of the year in which the emergency concludes).

This section of the newsletter has discussed specific comments the OrthoForum made in its letter responding to the Stark proposed rule, and it has discussed the responses of CMS to those comments. The issues discussed in the comment letter are only a subset of the many Stark issues that OrthoForum PGPs will face going forward. For example, the final rule creates, for the first time, a definition of the “volume or value” standard and the “other business generated” standard, and these definitions, at least to some extent, supersede previous guidance. Rather than following the past approach of deeming certain situations as not taking volume or value into account, or not taking other business generated into account, the regulations now specify the particular situations in which volume or value, or other business generated, are considered to have been taken into account. All situations not within the specified situations are considered permissible.

CMS says it is trying to create a “bright line.” The agency states that “only when the mathematical formula used to calculate the amount of the compensation includes referrals or other business generated as a variable, and the amount of the compensation correlates with the number or value of the physician’s referrals to or the physician’s generation of other business for the entity, is the compensation considered to take into account the volume or value of referrals or take into account the volume or value of other business generated.”

Nevertheless, with respect to group practices and special rules for profit shares and productivity bonuses, the final rule states that, per the new group-practice VBA, “a group practice may distribute directly to a physician in the group the profits from designated health services furnished by the group that are derived from the physician’s participation in a value-based enterprise, including profits from designated health services referred by the physician, and such remuneration will be deemed not to be based on (or take into account) the volume or value of the physician’s referrals.”

CMS continued:

Physician #1 could receive a profit distribution that considers his or her referrals to the group that are directly attributable to his or her participation in the value-based enterprise (and its corresponding participation in the model), and Physician #2 could receive a profit distribution that considers his or her referrals to the group that are directly attributable to his or her participation in the value-based enterprise (and its corresponding participation in the model). Neither distribution would jeopardize the group’s ability to qualify as a “group practice . . .”

Discussing the Stark final rule in greater detail is beyond the scope of this particular newsletter, although the Advocacy Committee will work to learn more and inform OrthoForum members. All PGPs will now begin a long learning process concerning the new VBA exceptions, as well as other changes made by this final rule.

Democrats, unlike Republicans, don’t limit the terms of their ranking members. As of now, we don’t expect any changes among the Democratic ranking members relevant to OrthoForum.

Even after the Georgia Senate contests are decided, the Senate will welcome at least one new member. With Kamala Harris moving to the vice-president’s office, California governor Gavin Newsom will appoint a replacement. Dianne Feinstein, the oldest member of the Senate, recently stepped aside as ranking member of the Judiciary Committee, leading to rumors that she will step down and give Newsom a second seat to fill.

On the key House committee, Ways and Means, we expect no changes at the top. Richie Neal (MA-1) and Kevin Brady (TX-8) will remain chairman and ranking member, respectively.

We will continue to monitor the new administration for announcement of appointments and agenda items. We will also watch for leadership and committee membership changes in both the Senate and the House.