On December 27, President Trump signed into law the Consolidated Appropriations Act, 2021, which was passed by Congress the evening of December 21, after weeks of negotiation. The lengthy legislation, totaling in at 5,593 pages, provides for over $2.3 trillion in funding, $900 billion of which is allocated for COVID-19 relief. The Act contains several key provisions relevant to the healthcare industry.
The Act
The Act allocates additional COVID-19 funding, including $3 billion in the provider relief fund, $8.75 billion in vaccine distribution, and $22.4 billion in COVID-19 testing and tracing. In addition to adding another $3 billion to the $175 billion previously allocated to the Relief Fund by the Coronavirus Aid, Relief, and Economic Security Act and the Paycheck Protection Program and Health Care Enhancement Act, this legislation also clarifies use of Relief Fund payments.
The Act further includes several components relevant to the healthcare industry, some of which are separate from the COVID-19 pandemic. One includes the “No Surprises Act”. This legislation aims to hold patients harmless for surprise medical bills, including by limiting patient financial responsibility and cost sharing amounts to what would be paid to in-network providers and by establishing a dispute resolution process to settle disputes relating to out-of-network claims. The legislation also will also give patients more transparency by, among other things, requiring health plans to include pertinent deductible and out-of-pocket limit information on member ID cards.
The Act additionally delays the mandatory radiation oncology model, which is now set to begin no earlier than January 1, 2022, and extends the Independence at Home demonstration program through December 31, 2023. It also implements a temporary freeze on the current payment and patient count threshold for physicians and other eligible clinicians participating in Advanced Alternative Payment Models.
Regarding telehealth services, the legislation allocates approximately $250 million in additional funding to the Federal Communications Commission’s COVID-19 Telehealth Program, as originally authorized under the CARES Act, and expands access to mental health services furnished through telehealth provided certain conditions are met.
Impact on Providers in Medicare Fee Schedule
As a result of the Act, CMS revised the 2021 conversion factor that determines Part B fees to $34.89. This is a nearly 8% increase from the $32.41 rate that the agency had previously approved in the final 2021 Medicare physician fee schedule in December. The increase will result in significant fee changes in 2021 compared to what providers expected to start the year. Services that were due for major cuts will instead see minor clips, while frequently reported services already in line for a pay raise will go even higher.
Furthermore, E/M services that were largely at the center of the budget neutrality-driven shake-ups ahead of 2021 are in line for an even larger pay increase than expected. Established office visit code 99214, the most-reported E/M service, had been in line for a 12% pay gain at $123.48 per encounter. Now the year-to-year increase accelerates to 19% in the non-facility setting, settling at $131.20. The 2020 rate was $110.43. Fellow established E/M code 99213 goes from a 14% to a 21% boost, pushing to $92.47 per claim in 2021, up from $76.15 in 2020.
Finally, the Act implements a moratorium on payment of a certain add-on code (G2211) for inherently complex evaluation and management visits through January 1, 2024 in order to reduce the budget-neutrality adjustment.