2021 MPFS and QPP Final Rule: Impact on Value-Based Organizations

On December 1, 2020, the Centers for Medicare & Medicaid Services (CMS) published the Calendar Year (CY) 2021 Final Rule for the Medicare Physician Fee Schedule. It became effective as of January 1, 2021. As we begin the new year, I wanted to take a few minutes to discuss the impact of these changes on value-based care organizations. For a summary of these changes, please click here.

Significant Updates to the Quality Payment Program (QPP)

The intent of change to the quality measure submission was brought about to “reduce burden and enhance further alignment across CMS programs.”[1] While it sounds like it will be easier to report on fewer measures, please note that this is not necessarily the case. Organizations will need to review their current processes to begin fully reporting on all patients on quality measures. In previous years, the CMS Web Interface limited reporting to only a sample of Medicare patients, whereby ACOs could manually collect data for a small sample set for each measure. However, pulling charts for all patients appears to be an impossible task. This means that practices will need to revise their processes to be able to extract, aggregate, and submit data for quality measures, likely from their EHR. This will be a heavy lift for organizations to properly comply.

ACOs will also need to meet new quality performance standards across their entire population for shared savings. While most ACOs have high performance on their quality metrics, this may present a challenge to any organization that is either new to value-based contracting or has a new quality reporting process.

  • “For performance years 2021 and 2022, the ACO achieves a quality performance score that is equivalent to or higher than the 30th percentile across all MIPS Quality performance category scores”
  • “For the 2023 performance year and subsequent performance years, the ACO achieves a quality performance score that is equivalent to or higher than the 40th percentile across all MIPS Quality performance category scores.”[2]

Reimbursement Changes

Changes to Relative Value Units(RVU) and compensation

Many physicians are compensated based on base pay plus bonuses for meeting work relative value unit(wRVU) thresholds or some physicians are solely compensated based on wRVU’s. With the 2021 changes, physicians can expect to receive more RVUs, however, reimbursement will potentially decline for these RVUs, compared to previous years. Hospital systems or organizations that compensate physicians based on wRVU’s should re-evaluate their contracts to determine whether compensation based on the new rates still represent fair market value.

The reimbursement for telehealth services will hopefully expand access to care for patients, and it should also spark innovation among providers. The expansion of behavioral health and home care services will undoubtedly increase care for patients that need it the most.

Value-based organizations will need to re-evaluate compensation models to align incentives with risk contracts. Physician compensation may start to shift away from a strictly RVU model to a value-based model, and organizations may start to build in compensation design based on value rather than volume to align incentives between organizations and providers for increased quality of care.

Care Management Services 

I am hopeful that the expansion of the Principal Care Management (PCM) code to Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs) will increase the use of these necessary services and programs, however, I expect program uptake will be relatively slow in the beginning. Patients that suffer from chronic conditions require more than a checkup once a year, and PCM help to extend physician services beyond the office visit while receiving fee-for-service (FFS) revenue. The FFS revenue from these programs aligns with the vision for value-based payment programs by improving patient care and access, reducing hospitalizations, and preventing exacerbations. The implementation of a PCM program requires significant technological and workflow implementations, and many practices are simply not ready to tackle these challenges, especially given the pandemic environment.  Organizations will overcome these challenges by implementing care management systems with integration. These systems need to decrease physician burden by providing them with the data they need to properly make decisions.

Updates for Remote Physiologic Monitoring (RPM) Services

There has been a significant increase in RPM interest and uptake in 2020—especially, during the pandemic. RPM is a necessary service, that is used by both traditional primary care providers and specialists. Overall, RPM data provides real-time updates to the physician on how the patient is doing, which aligns with the goals of value-based care models to ensure the physician catches warning signs before they lead to an exacerbation or hospital admission. However, many practices are still very reluctant to implement RPM technologies because of the ambiguity in language around what constitutes “continuous” monitoring. I am sure we will continue to see further clarifications, and expansion, of RPM services in years to come.

After the way 2020 turned out, I am sure everyone couldn’t wait until the clock struck midnight on December 31, 2020. That being said, don’t forget that as we turn the calendar page, Salient Healthcare continues to proudly be a value-based care resource to you. 2021 looks like it will hold similarities to 2020, continuing to push VBP in the right direction with alignment of patient-centered codes and decreasing physician burden. Stay tuned for more policy updates and impacts from the Salient team.


[1] 2021 MPFS and QPP Final Rule Impact on Value-Based Organizations Summary Sheet

[2] 2021 Quality Payment Program Final Rule FAQs

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