Your Path to Program Success: Expert Advice

New Rules, New Challenges Amidst an Already Complex Healthcare Environment

Ryan Graver, Vice President for Market Access at Terumo Business Edge

Mark Domyahn, Partner, JD LYMON

Ryan Graver, Vice President for Market Access at Terumo Business Edge

Mark Domyahn, Partner, JD LYMON

Note for readers: The online version of Tables 1-2 for this article differ from the print version. The numbers in Tables 1-2 have been updated as of Jan 12, 2021. 

Table 2 is a large-size table. We encourage readers interested in a detailed review of Table 2 to download the pdf of the article (above). The online Table 2 image can also be downloaded (open the image, then right click on the image to save) and enlarged.

The Medicare Physician Fee Schedule (PFS) and hospital outpatient prospective payment system and ambulatory surgical center (OPPS/ASC) final rules have been published and once again, these changes will likely have a significant impact on the healthcare landscape as we move forward through these unpredictable times. Ryan Graver, Vice President for Market Access at Terumo Business Edge, talked recently with Mark Domyahn, partner at JD LYMON, a market access consulting firm, regarding these rules. We think you will find Mark’s observations enlightening and a glimpse into what we can anticipate in the coming year(s). There is little question that these changes will further challenge hospitals and thus create an ever-increasing burden as they seek to improve upon the delivery of efficient, cost-effective care. — Gary Clifton, Vice President, Terumo Business Edge

Ryan Graver, Vice President for Market Access at Terumo Business Edge: Mark, thanks for taking time to connect with us and for agreeing to provide your perspectives on recent Medicare policy changes. Can you provide readers some brief background on yourself and your experience related to reimbursement policy?

Mark Domyahn, Partner, JD LYMON: There is a lot to discuss as we prepare to enter 2021. As for my background, I received my MBA from The Wharton Business School, began my healthcare experience over 25 years ago with Deloitte Consulting, and am now a partner at JD LYMON, a consulting firm that provides strategic U.S. market access support to MedTech and biopharmaceutical companies. Over my career, I focused on providing strategic guidance and options on reimbursement and health economics to medical device executives to help organizations maximize commercialization for a myriad of technologies. I’ve had the opportunity to develop integrated reimbursement strategies for a broad range of medical technologies, including cardiovascular, movement disorders, chronic pain, spine, orthopedics, and others. My experience in establishing positive coverage, new coding, and incremental payments for various technologies has required me to work at a very detailed level across reimbursement policy and to work very closely with the Centers for Medicare and Medicaid Services (CMS). This detailed understanding of CMS policy was also incredibly helpful as I worked with the Cardiovascular Advocacy Alliance for several years prior to their merger with the American College of Cardiology on multiple policy initiatives supporting thousands of cardiologists across the United States.  

Ryan: As we prepare to wind down 2020 and welcome the new year, it goes without saying that this year has certainly been unique from many perspectives, from COVID-19 to an Administration change. Tell me where we ended the year in terms of CMS policy announcements?

Mark: In early December, CMS published both the calendar year (CY) 2021 Hospital Outpatient (OPPS)/Ambulatory Surgery Center (ASC) and Physician Rules, and both contained a number of important and significant policy changes. Specific to the OPPS/ASC final rule, I think one of the major policy changes is that CMS will officially be eliminating the “Inpatient Only” list over the next three years. In the rule just released, CMS started by adding almost 270 musculoskeletal procedures that will be payable in the hospital outpatient setting starting January 1, 2021, and this will continue until the list is eliminated on January 1, 2024. It will be important for providers to note that physician clinical decision-making will be critical in determining whether a patient requires an inpatient admission, and clinical documentation and coding will be key in terms of driving appropriate reimbursement when it is medically reasonable and necessary for a patient to be admitted to the hospital.  

As it relates to vascular and cardiology procedures, CMS continued forward with its efforts to increase the number of procedures that will be paid for outside of the hospital. For example, CMS will now pay for coronary atherectomy and drug-eluting stent (DES) placement (C9602-C9605) in the ASC effective January 1, 2021. Other vascular procedures that will become payable in the ASC as well include placement of vena cava filters, some additional thrombolysis and embolization procedures, and intravascular lithotripsy. Given CMS’ policy changes, more and more procedures will become payable in the ASC setting moving forward.

Ryan: Of course, percutaneous coronary intervention (PCI) was added to the ASC list beginning in 2020. What do you think is driving Medicare’s efforts to move procedures out of the hospital into ASCs?

Mark: It’s a good question. As stated previously, we are going to see more procedures in the ASC being payable by Medicare as CMS changed its criteria when determining if procedures can safely be performed in the ASC setting.  This change in criteria is because CMS understands that technology, the practice of medicine, and ASC capabilities have evolved, as well as recognizes the need for more healthcare access points throughout the country.

Ryan: Were there significant changes finalized in the Physician Rule for 2021?

Mark: Absolutely.  First, we estimate the final CY 2021 conversion factor to be decreased by approximately 6.8% compared to 2020 (Table 1). This was driven by legal requirements that physician payment adjustments are budget neutral. One of the other drivers of the conversion factor decrease was due to changes made to Evaluation and Management (E/M) coding. CMS made various policy changes, including reducing to 4 levels of E/M codes for new patients, introducing an add-on code for prolonged visits, and an add-on code for complex visits. The majority of these changes result in increased payment for E/M services. As I mentioned earlier, CMS added a number of procedures to the Telehealth list, during the public health emergency (PHE) and permanently.  Another policy issue that CMS addressed was clarifying how they interpret Current Procedural Terminology (CPT) codes for remote physiologic monitoring services. As technology continues to advance in the monitoring of complex, chronic conditions, it is important to understand what monitoring services may be payable.     

Ryan: The impact to the Conversion Factor seems significant in terms of real dollars. What should providers understand as it relates to their fee schedule and what do you anticipate that these changes could mean relative to providers either seeking employment or pursuing alternative revenue streams to offset these downward payment trends?

Mark: I think the most important thing will be to evaluate the impact at the practice level based on patient utilization patterns. For many interventional cardiology procedures, Medicare payment will decrease in 2021, because of the decrease in the conversion factor. However, this Medicare payment decrease may be offset based on the additional payment for higher level E/M coding. This is why it is important to understand what the potential impact is across the entire practice level based on the procedures performed.

From an employment perspective, it is important to keep in mind that the procedural payment decreases are not due to significant changes in relative value units (RVUs), but in the conversion factor.  The RVUs actually increase for some procedures, but payment goes down because of the change in the conversion factor. Physician employment incentives may not be impacted if they are RVU based, but the actual payment to the hospital for these services will go down. This could affect how hospitals negotiate future contracts with their physicians as well as impact physician employment going forward.

Ryan: If I understand correctly, congressional legislation requiring budget neutrality is driving these payment cuts to physicians; we have certainly seen this before and in the past, Congress has stepped in at the last minute and overruled the mandatory cuts, thus avoiding the downward payment rates. Have you heard much rumbling in Washington over these cuts and do you think Congress will act this year as they have in the past?

Mark: It is interesting that you ask this question, and you are correct that congressional action was required in order to change the final rule that was published. On December 21st, 2020, as part of the COVID relief bill passed by Congress, also known as the Consolidated Appropriations Act, payment cuts were changed, moving provider fees from approximately -10% to a -6.8% for the year. Surprisingly, there has been very little press on this topic thus far, largely because COVID-19 has been dominating our broader policy dialogue, but we will keep an eye on how these policy changes are actually imposed by CMS.

Ryan: In your earlier explanation of the conversion factor changes, you pointed out the differences between the impact of a -6.8% decrease to employed versus independent physicians. What are your thoughts regarding these payment changes for independent physicians that practice in OBLs?

Mark: OBLs should carefully analyze their procedural utilization to determine the potential impact in 2021. For example, Table 2 analyzes the National Medicare Physician Payment rates for 2020 and 2021 for three common procedural areas performed in OBLs. The payment changes for these procedures are more variable than just the conversation factor decrease as CMS also updated the practice expense RVUs for some of these procedures. Understanding the payment changes specific to each practice will be important to understand relative to other payment changes, such as for E/M billing. 

Ryan: The 2021 policy changes appear to be significant and certainly require a deeper understanding of their meaning. The impact will largely depend on the type of practice in operation. What do you recommend to providers?

Mark: You are definitely correct that there are many and, in some cases, significant, changes impacting reimbursement as we come into 2021. I know that Terumo Business Edge helps providers by performing a practice health check and analyzing providers’ performance by CPT. I definitely recommend that providers analyze their practices to understand where they may be most impacted. Make sure that you educate yourself and your staff on the coding and regulation changes in order to ensure that you are able to bill appropriately for services provided in 2021.  

Ryan: Terumo Business Edge is happy to help providers understand these policies and as you mentioned, a practice health check is a great analysis to help baseline a practice and begin to understand historic performance, as well as understand potential impact of these changes you have discussed. 

I have one last question that is a bit outside of our discussion, given that the Department of Justice (DOJ) published a separate set of regulations that have significant context as we move more toward value-based payment models and provider liability. What are your thoughts relative to the Stark and Anti-Kickback final rules that were recently published and what should providers be preparing for in the coming year?

Mark: In my opinion, the changes to Stark and the Anti-Kickback Status (AKS) are long overdue as neither were designed with value-based agreements in mind. The changes to both Stark and the AKS provide exceptions, safe harbors, and guidance that should be helpful for physicians to determine what is permissible. I think these rules are going to allow for more flexibility for physicians to enter various arrangements with the confidence that they are doing everything they can to minimize their legal risk. It is important to note that complete alignment between Stark and the AKS may not be feasible, and it will be imperative that experienced healthcare counsel be consulted prior to entering into any value-based arrangement.

Ryan: Mark, thank you for taking the time to speak with Terumo Business Edge and for your insights into policy changes. 

Providers, if you would like more information or would like to speak with Terumo Business Edge, please contact us at: