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Top 5 Facts NACs Need to Know About the CY 2021 Medicare Physician Fee Schedule Final Rule

On Dec. 2, 2020, the Centers for Medicare and Medicaid Services (CMS) released the Calendar Year (CY) 2021 Medicare Physician Fee Schedule (MPFS) Final Rule. However, on Dec. 21, 2020, Congress passed the Consolidated Appropriations Act, 2021 and it was signed into law by the President on Dec. 27, 2020, which modified the previously released final rule. To help dissect this lengthy final rule, AAPACN asked Liz Barlow, RN, CRRN, RAC-CT, DNS-CT, AVP of Clinical Innovation for Paragon Rehabilitation, a contract therapy provider, to share her insights on the most important facts nurse assessment coordinators (NACs) need to know.

Decrease in payments for CPT codes

“In the December 2 release of the final rule, there were changes to Current Procedural Terminology (CPT) codes. Because therapy for Medicare Part B services is paid for by CPT codes, that was the biggest change for skilled nursing facilities (SNFs) in the final rule. The rule caused a big decrease in payment for the way we bill Part B. Originally, it was going to be a cut of about 9%. While there were some CPT codes that received an increase, like PT evaluation codes, most of them received a decrease,” says Barlow, explaining the impact of the early December version of the final rule.

“CMS requires that the fee schedule goes through a balanced budget, and because they bumped up some new evaluation and management (E/M) codes, they had to cut back on other codes. Unfortunately, therapy was part of that cut,” explains Barlow.

However, the situation evolved. “When the Consolidated Appropriations Act, 2021 was passed, it reversed some of the previous decisions in the MPFS Final Rule, including a partial fix to the decline in payment,” says Barlow. “The 2021 conversion factor will be 34.8931, instead of the originally decided conversion factor of 32.41. Although that is still a decrease from the 2020 conversion factor of 36.09, the bottom line from this new Act is that therapy’s average decrease in payment is now only around 3% total.”

“The passage of this Act removed many of the barriers that would negatively impact therapy and added $3 billion into the Physician Fee Schedule. There was a 3.75% overall payment increase across all specialties. They decided not to move forward with one of the big E/M codes (Visit Complexity Inherent to Certain Office/Outpatient Evaluation and Management – HCPCS code G2211) and delayed it until CY 2024, and the two percent payment adjustment (sequestration) is on hold until March 31, 2021,” notes Barlow.

KX modifier threshold adjustment

“For CY 2021, the KX modifier threshold amounts were set at $2,110 for Physical Therapy (PT) and Speech-Language Pathology (SLP) services combined, and $2,110 for Occupational Therapy (OT) services. These thresholds indicate when the KX modifier goes on the bill. The Medical Record (MR) threshold amount remains at $3,000,” says Barlow.

The official instruction from CMS regarding these changes, CR 12014, was issued to MACs on Nov. 13, 2020 and is available here.

“MACs and other audit organizations also look at the MR threshold potentially from a data perspective for future audits,” Barlow explains. “They look at that $3,000 amount to see if a facility had a high number of patients that went over that $3,000 threshold. They may ask why there was a high number and decide to complete some audits based on the data they see. So, from a medical record audit and appeal perspective, that’s important and a good data point to review and track.”

The background and requirements of the KX modifier can be found in the Medicare Claims Processing Manual. In section 10.2, subsection C, CMS states the Section 50202 of the Bipartisan Budget Act of 2018 retained the “cap amounts as a threshold of incurred expenses above which claims must include a modifier as a confirmation that services are medically necessary as justified by appropriate documentation in the medical record. This is termed the KX modifier threshold.”

In section 10.3.1, CMS elaborates, “The KX modifier is added to claim lines to indicate that the clinician attests that services at and above the therapy caps are medically necessary and justification is documented in the medical record.”

Section 10.3.3 outlines the requirements for using the KX modifier:

By appending the KX modifier, the provider is attesting that the services billed:

  • Are reasonable and necessary services that require the skills of a therapist; (See Pub. 100-02, chapter 15, section 220.2); and
  • Are justified by appropriate documentation in the medical record, (See Pub. 100-02, chapter 15, section 220.3); and
  • Qualify for an exception using the automatic process exception.

Finalized policy regarding maintenance therapy

“In the CY 2021 MPFS Final Rule, CMS also finalized the policy regarding maintenance therapy services,” says Barlow. “This allows physical therapists (PTs) and occupational therapists (OTs) to delegate the furnishing of maintenance therapy services (as defined by the Jimmo v. Sebelius Settlement Agreement), as clinically appropriate, to a physical therapy assistant (PTA) or an occupational therapy assistant (OTA).”

“That’s important because they were not able to do that prior to the COVID-19 public health emergency (PHE). For Part B patients, only PTs and OTs could do maintenance therapy. CMS allowed PTAs and OTAs to provide treatment on an interim basis during the PHE, beginning in the May 1, 2020, COVID-19 Interim Final Rule (85 FR 27556). So, this rule finalized the change in who can provide treatment. While PTs and OTs will still need to evaluate patients, they can now delegate the treatment of maintenance therapy services to a PTA or OTA that they use for rehabilitative services,” says Barlow.

Telehealth visit frequency limitation

“The CY 2021 MPFS Final Rule also finalized a frequency limitation for subsequent nursing facility telehealth visits of one visit every 14 days, as allowed,” says Barlow. “Telehealth has become incredibly important with COVID, so this helps clarify how often visits can occur for Medicare beneficiaries without disincentivizing in-person care when it’s needed.”

In the MPFS Final Rule on page 84531, CMS states,

In seeking to find the right balance between providing greater access to care through more telehealth visits and ensuring adequate in-person care, especially given the longer length of stays for NF patients, we believe that one telehealth visit every 30 days may be too infrequent and once every 3 days poses a risk of creating a disincentive for in-person care. Therefore, we believe it is appropriate to revise the frequency limitation for subsequent nursing facility visits to permit one Medicare telehealth visit every 14 days. This limitation provides an appropriate balance between increased access to care through telehealth and maintaining appropriate in-person care. After consideration of the public comments, we are finalizing a policy to allow subsequent nursing visits to be furnished via Medicare telehealth once every 14 days in the NF setting. We are not finalizing any revisions to the frequency limitations on inpatient visits or critical care consultations provided as telehealth services.

Change was possible because of grassroots efforts

“A lesson learned through the process that led to the Consolidated Appropriations Act, 2021, was that there were a lot of grassroots efforts, and they worked. Overturning some aspects of the original MPFS final rule took many people speaking with one voice—but they heard us!” rejoices Barlow. “There were a lot of organizations, including AANAC’s parent association, the American Association of Post-Acute Care Nursing (AAPACN), that impacted this change. To all long-term and post-acute care professionals out there, I want to stress the importance of reaching out to your legislators and saying, ‘I’m in long-term care and this is going to impact the residents we serve.’ That’s how we achieved the wins that we gained in this Act. It took individuals having the courage and making the decision to speak up about an issue that was important and not being sway by doubt that they are just one voice. We are many voices, bringing attention to an important need that impacts those we care for every day.”

Tracey Moorhead, president and CEO of AAPACN, adds, “This issue is a critical example of the power of advocacy coalitions. AAPACN joined a coalition to raise awareness among Members of Congress of the adverse impact these Medicare cuts would have for beneficiaries. Ultimately, the coalition identified champions in the U.S. Senate to advance the issue. More than 80 organizations, including AAPACN, signed onto the final coalition letter in support of the legislation. There was truly strength in numbers.”


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