CMS Releases Physician Fee Schedule Final Rule for CY2021

On December 1, 2020, about a month later than the normal schedule, CMS released final rulemaking for the Physician Fee Schedule and related policies for CY2021.

The CMS press release focused on expanded telehealth services and better payments for E&M services in primary care.

• See the press release here.
• See the Fact Sheet here.
• See the "inspection copy" or typescript rule here.
• It weighs in at over 2000 pages.
• Look for the Fed Reg final rule here on Dec 28.
• See some missing paragraphs and updates in Fed Reg Jan 2021, here.
• Trade journal Healthcare Dive here.  
• "CMS extends telehealth rules, cuts specialty rates."

The typeset version generally appears in the Federal Register after a delay of 5-10 days.

I'll highlight 3 topics:

1. NCD Deletion
2. Pricing of per click fees for AI software
3. Pricing of the iRhythm service

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NCD DELETION

One offbeat topic was deletion of antiquated NCDs (Section J, typescript page 997).  9 were proposed for deletion; 100 comments were received.  CMS only deleted NCDs for which there was essentially no comment to the contrary; if there was much disagreement, CMS is keeping those NCDs for ongoing review as needed but not for retirement.  Deletions are six:  "Electrosleep," "GI Reflux Devices," "MR Spectroscopy," and "Protein A Columns for Extracorporeal Immunoadsorption" and "Abarelix [drug]."  Also deleted is a section blocking use of PET for diagnosing infection, which will now revert to local discretion.

  

NCDs retained 3 NCDs due to diverse opinions including "Apheresis," "Histocompatibility," and "Cytogenetics."  

Separately, CMS on September 16 published an update on its backlog of NCD requests.  Here.  There are 0 requests under review, 3 on a wait list (diaphragm pacemakers, pulmonary pressure sensor for CHF, ventilators for COPD), 6 NCD requests open, and 2 NCDs finalized in the past 12 months.  CMS also reports NCD activities to Congress, e.g. in 6/2019 they reported on 2018 activities (here).  Related, it looks like CMS held 2 MEDCACs in 2018, 0 in 2019, and 1 in 2020 (here).  There hasn't been an NCD Appeal since 2014 (here).

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ROYALTIES FOR AI-BASED SERVICES (PER CLICK FEES)

An interesting code is on page 489ff (typescript), 92229, imaging of retina with remote point of care automated analysis which "uses artificial intelligence technology."  An image analysis fee (e.g. a per click fee or royalty fee) was proposed as part of the business model for the technology.  CMS declined to value this.  They write, "While we agree that the costs of AI applications should be accounted for in payment, AI applications are not well accounted for in our practice expense methodology."  

They write, in the OPPS final rule for CY2018, CMS considered payment for fractional flow reserve computed tomography (FFRCT) as a separate service from the original CT (e.g. Heartflow technology).  They "established contractor pricing for the service."   (I'm not sure this is quite right. CMS placed the Category III codes for Heartflow, like 0503T, in an APC, which is priced in the OPPS setting; and it IS priced by contractors in the Part B setting, but so are all Category III codes, so it wasn't really a product specific decision to be contractor priced.)    

CMS closes by saying they are looking forward to further conversations on how to price AI based analysis, but are finalizing payment as contractor pricing for 92229.

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PUNT ON PRICING FOR IRHYTHM

Irhythm (and similar vendors) have had some of the most successful Category III codes ever [FN1], which are converted to Category 1 codes (93241ff) for CY2021.  I have argued for years that the RVUs will be hard for CMS to set, although it appeared to propose doing so last summer.  In the final rule, CMS appears to punt and set some of these codes to local contractor pricing.  They write (typescript p 501), "We are unable to identify accurate national pricing for the “extended external ECG patch” (SD339) supply. To allow additional time to receive more pricing information, we are finalizing contractor pricing for CY 2021 for the four codes that include this supply input (CPT codes 93241, 93243, 93245, and 93247)."   CMS faced the problem some 10 years ago in trying to price a reusable, uniquel;y custom manufactured capital equipment device for 30-day telemonitoring (Cardionet), eventually settling on a RVU price that nearly halved prior MAC payment rates.  CMS wrote that "we require an invoice representative of commercial market pricing to establish a national price for a new supply or equipment item."

See iRhythm investor call on the RVU decision here.  I discussed the digital health and RVU issue also on August 4 - here.   

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CMS Summarizes Challenges of DHealth/AI Services Pricing in Transmittal

In public transmittals summarizing the rule, CMS summarized some of its challenges in pricing Dhealth/AI services.  See CR12071/MM12071 here.  Writing:

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Handy MA Citations

The NCD deletion section contains a few handy Medicare Advantage citations, regarding their obligation to cover locally covered services in Parts A/B.  See 42 CFR 422.101(b); see SSA 1852(a)(1)(c), and see 63 FR 34986 at 35077.  See also Medicare Manual, Managed Care, Chapter 4, Section 90.

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These rules are normally released by November 1, to allow 60 days for implementation both at CMS and at providers, prior to January 1.

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FN1

2019 Part B use of iRhythm code 0297T was 240,000 uses at an average dollars allowed of $311 (Part B national data files), around $75M.   This is in contrast to most Category III codes which are very, very little use or payment.   Physicians could bill device patient training code 0296T (132,000 uses at $24) and interpretation code 0298T (212,000 uses at $27).  These Category III codes are replaced in 2021 with codes 93245-23248.  '45 is the holistic code, '46 is initial connection (provision), '47 is scanning analysis, and '48 is physician interpretation.   Connection is newly priced by CMS at $13 and interpretation at $25.