DEV SITE     Join/Renew | Online Learning Portal | PM&R Knowledge NOW ® | PhyzForum | PM&R Journal

Medicare Physician Fee Schedule Rule


Medicare Physician Fee Schedule Final Rule

On December 1, 2020, the Centers for Medicare & Medicaid Services (CMS) released the Medicare Physician Fee Schedule Final Rule which finalizes payment rates and policies effective January 1, 2021. Your Academy submitted comments to the proposed rule in early October.

Conversion Factor and Payment Cut Impact

The Consolidated Appropriations Act, signed into law on December 27, 2020, included adjustments to the 2021 conversion factor. These adjustments result in a finalized 2021 conversion factor of $34.89. This is a 3.3% reduction from the 2020 conversion factor of $36.09, which is a far smaller reduction than the one originally finalized in early December 2020.

We developed a code-by-code summary of 2021 payment compared to 2020 payment, available to AAPM&R members here. This summary is updated to reflect the new 2021 conversion factor and other relevant changes resulting from the Consolidated Appropriations Act. The impact of the final rule on payment varies significantly based on the services being provided. 

Overall themes include:

  • Payment for non-facility services will typically be slightly higher than 2020 due to some slight increases to practice expense
  • Payment for facility services will typically be slightly lower than 2020 due to the conversion factor coupled with not receiving the same practice expense increases as non-facility services
  • Outpatient and physician office evaluation and management services will be reimbursed significantly higher this year due to an increase in work RVUs

Office and Outpatient Evaluation and Management Changes

CMS finalized its proposal to adopt the new CPT code descriptors and guidelines for office and outpatient E/M services.  These changes include elimination of code 99201.  Guidelines and code descriptors now reflect that code selection should be based on either medical decision making or time.  For more detailed information regarding the updates to the office and outpatient E/M code set, visit our 2021 E/M webpage

Along with the CPT updates to office and outpatient E/M, CMS has finalized a new HCPCS code for prolonged services when billed with office and outpatient E/M. 

G2212 – Prolonged office or other outpatient evaluation and management service(s) beyond the maximum required time of the primary procedure which has been selected using total time on the date of the primary service: each additional 15 minutes by the physician or qualified healthcare professional, with or without direct patient contact. 

Note: Coding guidelines for prolonged services codes billed with other E/M remain the same.  Further, it is unclear at this time whether other payors will choose to reimburse for G2212. 

Scope of Practice Issues

CMS finalized its proposal to allow NPs, CNSs, PAs, CRNAs and CNMs to supervise diagnostic tests where allowed by state scope of practice laws.  This is a permanent scope of practice expansion of current allowances made under the pandemic.  AAPM&R opposed this scope of practice expansion in our comment letter to CMS. We urged CMS to re-instate physician supervision requirements of diagnostic tests after the PHE.

CMS finalized its proposal to permanently allow teaching physicians to meet requirements to bill for services involving residents through virtual supervision. Through the pandemic, this expansion covers all teaching settings. However, following the pandemic, the permanent expansion is limited to services furnished in residency training sites that are located in rural areas. 

CMS also finalized its proposal to allow a physical therapist (PT) or occupational therapist (OT) who establishes a maintenance program to assign the duties to a physical therapist assistant (PTA) or occupational therapy assistant (OTA), as clinically appropriate, to perform maintenance therapy services.


CMS finalized its proposal to permanently expand the Medicare telehealth list to include:

  • Domiciliary, rest home, or custodial care services, established patients (99334-5)
  • Home visits, established patients (99347-8)
  • Cognitive assessment and care planning services (99483)
  • Visit complexity office and outpatient E/M add on code (G2211)
  • Office and outpatient E/M (G2212)

CMS also temporarily expanded the Medicare telehealth list to include:

  • Home visits, established patients (99349-50)
  • Nursing facility discharge day management (99315-6)
  • Therapy services, physical and occupational therapy (97161-8, 97110, 97112, 97116, 97535, 97750, 97755, 97760-1, 92521-4, 99226)
  • Hospital discharge day management (99238-9)

Visit the CMS website for the complete Medicare telehealth list.

CMS clarified that at the conclusion of the public health emergency (PHE) it will no longer be offering separate payment for audio-only E/M visit codes. Following the PHE, audio-only services will be categorized as bundled. It should also be noted that following the PHE, CMS coverage of telehealth will be restricted to services offered to patients in healthcare professional shortage areas.

Practice Expense for PPE During the Pandemic

Your Academy previously announced CPT finalized a new code, 99072, for additional PPE and clinical staff time associated with services during the pandemic. AAPM&R has urged CMS and other payors to cover this service.  However, CMS has finalized that it will not separately pay for code 99072.  CMS is accepting comments on this issue, and your Academy will continue to advocate for payment to reflect that additional costs associated with supplies and staff time during the pandemic. 

Quality Payment Program

CMS finalized the following provisions for the 2021 Merit-Based Incentive Payment System (MIPS) reporting, which impacts 2023 Medicare Part B payments:

  • In order to avoid a 9% penalty, you must meet or pass the threshold of 60 points for 2021.
  • The exceptional performance threshold remains at 85 points.
  • The Quality category weight will decrease from 45% to 40%.
  • The Cost category will increase from 15% to 20%.
  • Both the Improvement Activities and Promoting Interoperability categories remain at 15% each.

Your Academy will provide additional 2021 QPP education and educational materials in the spring.

Electronic Prescribing for Controlled Substances (EPCS)

Congress passed legislation in 2018 requiring Medicare Part D prescriptions for controlled substances to be electronically prescribed starting in 2021, with some exceptions. In the final rule, CMS reiterated the rationale for its proposal to defer the EPCS mandate until 2022, but also noted that some commenters urged the agency to require EPCS in 2021 even if it declines to enforce the requirement until 2022. As such, CMS finalized that electronic prescribing for controlled substances for Medicare prescriptions will begin in 2021 and compliance will be required beginning in 2022.

More Information

The complete rule is available on the Federal Register website.

A detailed CMS fact sheet is available on the Medicare website.

About MPFS

Medicare payment for physicians, and some non-physician practitioners (NPPs), is based on set rates under Medicare Part B. The system for payment, known as the Medicare Physician Fee Schedule (MPFS), is used when paying for: professional services of physicians and some NPPs; covered services incident to physicians’ services (other than certain drugs covered as incident to services); diagnostic tests (other than clinical laboratory tests); and radiology services. The MPFS also addresses various quality issues, fraud and abuse issues, and other issues that impact physicians. CMS updates the MPFS regulations annually, with comment periods open prior to implementation of the final rule. 

Did you find what you're looking for?

If not, email us at