Final Rule on Communications Technology and 2021 Physicians Fee Schedule

by  Christine Woolstenhulme, QCC, QMCS, CPC, CMRS
December 8th, 2020

To create a healthcare system that will benefit providers, as well as Medicare beneficiaries, there have been several new rules issued that begin on or after January 01, 2021. CMS released the final policy and payment provisions on December 01, 2020, which includes the physician fee schedule (PFS) for 2021. The PFS is used to pay for physician and practitioner services in several settings such as the physician's office, hospitals, ambulatory surgical centers, skilled nursing, labs, patient homes, hospice, and dialysis facilities. Technical services furnished in a physician’s office are also paid under the PFS. Payment is based on a full range of resources; we will address a few of them here.

Rate Setting using RVUs

There are several telehealth services eligible for reimbursement reported by a Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS) codes; these codes are assigned relative value units called RVUs. RVUs are used for the pricing of physicians' services and supplies and applied to each service for the physician’s work, the practice expense, and the cost of the physician’s malpractice insurance. Once the cost/value of the service has been considered, CMS assigns a conversion factor that is calculated with the RVUs which then becomes the payment rate.

Conversion Factor for 2021

According to a CMS news release, as required by law, the final policy changes to the Medicare physician fee schedule for the calendar year 2021 reflect the budget neutrality adjustment. The changes in RVUs and the conversion factor include significant increases for E/M visit codes for established patient visits and a decrease for new patient visits. However, the final CY 2021 PFS conversion factor is $32.41 - a decrease of $3.68 from the CY 2020 PFS conversion factor of $36.09.

The PFS conversion factor reflects the statutory update of 0.00 percent and the adjustment necessary to account for changes in relative value units and expenditures that would result from finalized policies.

Communications Technology Categories

In addition to adjusting the fee schedule, each year there are submissions for new services. These submissions are decided upon if they meet certain criteria under a category 1 or Category 2 code.

2021 includes the following in telehealth services.

Category 1 basis - similar to services already on the telehealth list:

In addition to categories 1 and 2, CMS is finalizing category 3, which is a temporary category added to allow for telehealth services to to be provided during the public health emergency (PHE). This list was not proposed to be added on a permanent basis. The category 3 list will remain for the calendar year in which the PHE ends. For example, if it ends in July 2021, it will remain in effect until December 31, 2021.

Category 3 basis:

The interim rule also mentions “the need for audio-only interactions could remain as beneficiaries continue to try to avoid sources of potential infection, such as a doctor’s office.” 

NOTE: The “originating site” is the patient’s location during the time of service, not the physician's or practitioner's office.

Eligible Providers for Telehealth Services

Not all providers are eligible to provide telehealth-delivered services. The list below are eligible professionals for 2021:

Other Important Changes: 

Subsequent Nursing Facility (SNF) Frequency Limitation Changes

The final rule argues that the once every 30-day frequency limitation for subsequent nursing facility (SNF) visits furnished via Medicare telehealth provides an unnecessary burden and limits access to care for Medicare beneficiaries in this setting. CMS is revising the frequency limitation from one visit every 30 days to one visit every 3 days.

Assessment, Management, and Remote Evaluation

Licensed clinical social workers, clinical psychologists, physical therapists (PTs), occupational therapists (OTs), and speech-language pathologists (SLPs) can furnish the brief online assessment and management services as well as virtual check-ins and remote evaluation services. 

Location of Physician or Practitioner Reporting Telehealth Visits

Additionally, CMS stated, “We have also received questions as to whether services should be reported as telehealth when the individual physician or practitioner furnishing the service is in the same location as the beneficiary; for example, if the physician or practitioner furnishing the service is in the same institutional setting but is utilizing telecommunications technology to furnish the service due to exposure risks. We are, therefore, reiterating in this final rule that telehealth rules DO NOT apply when the beneficiary and the practitioner are in the same location even if audio/video technology assists in furnishing a service.”

Read here for more information on the final policy FACT SHEET and the information listed below; 

Remote Physiologic Monitoring Services

Immunization Services

Direct Supervision by Interactive Telecommunications Technology

Payment for Office/Outpatient Evaluation and Management (E/M) and Analogous Visits

Policies Regarding Professional Scope of Practice and Related Issues


Final Rule on Communications Technology and 2021 Physicians Fee Schedule. (2020, December 8). Find-A-Code Articles. Retrieved from

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