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  • Washington Highlights

    CMS Releases 2022 Medicare Physician Fee Schedule Final Rule


    Gayle Lee, Director, Physician Payment & Quality
    Ki Stewart, Senior Policy and Regulatory Analyst

    The Centers for Medicare & Medicaid Services (CMS) released the 2022 Medicare Physician Fee Schedule and Quality Payment Program final rule on Nov. 2. This rule includes updates to payment rates for physicians and other health care professionals for 2022; expands the use of telehealth for mental health; clarifies policies related to split (shared) visits, critical care services, and teaching physicians; makes changes to policies for the 2022 performance year of the Quality Payment Program; among many other provisions. CMS responded to comments submitted by the AAMC and others to the proposed rule [refer to Washington Highlights, Sept. 17].

    Below are of some of the key provisions in the rule.

    Physician Fee Schedule

    In the final rule CMS lowered the conversion factor (CF) from $34.89 in calendar year (CY) 2021 to $33.59 for CY 2022, a decrease of $1.30 (-3.7%). This is due in part to the expiration of the 3.75% payment increase provided for in CY 2021 by the Consolidated Appropriations Act of 2021 (P.L. 116-260) [refer to Washington Highlights, Dec. 23, 2020].

    In addition to this CF reduction, there are several other across-the-board payment cuts for physicians that will go into effect Jan. 1, 2022, unless Congress acts [refer to Washington Highlights, Oct. 22]. These include a 2% cut due to the expiration of the moratorium on sequestration and a 4% cut due to pay-as-you-go legislation that was triggered by the American Rescue Plan. Taken together, these cuts in payment could total 9.75%. CMS also updated clinical labor rates used to calculate practice expense for CY 2022 over a four-year transition period.

    In the final rule, CMS clarifies and refines policies related to split (or shared) evaluation and management (E/M) visits, critical care services, and services furnished by teaching physicians involving residents. Split (or shared) E/M visits are defined as visits provided in a facility setting by a physician and a non-physician provider in the same group. The practitioner who provides the substantive portion of the visit would bill for the visit. For 2022, the substantive portion is determined based on medical history, physical exam, medical decision-making or more than half of the total time. Beginning 2023, the substantive portion will be defined as more than half of the total time spent. The rule states that critical care services may be paid on the same day as other E/M visits by the same practitioner or another practitioner in the same group of the same specialty if provided prior to critical care services at a time when critical care was not required.

    Additionally, critical care services will not be bundled in a global surgical period if unrelated to the surgical procedure. The rule clarifies that when a resident participates in providing a service, only the time the teaching physician was present can be included in determining the E/M visit level. Under the primary care exception, only medical decision-making would be used to select the visit level.

    In the rule, CMS permits certain services added to the Medicare telehealth list to remain on the list until Dec. 31, 2023, to collect data to determine whether services should be permanently added to the telehealth list following the COVID-19 public health emergency (PHE). CMS implemented provisions in the Consolidated Appropriations Act of 2021 that removed geographic location requirements and allowed patients in their homes access to telehealth services for mental health disorders.

    In the rule, CMS clarified that the home could include temporary lodging and locations near the patient’s home. An in-person visit would be required within six months prior to the initial telehealth service and each 12 months thereafter. The in-person requirement may be met by another physician or practitioner of the same specialty and subspecialty in the same group as the physician or practitioner who furnishes the telehealth service. An exception to the subsequent in-person visit requirement is permitted based on a patient’s circumstances. CMS will also allow payment for behavioral health services to patients via audio-only telephone calls from their homes. These changes also apply to rural health clinics and federally qualified health centers, which can receive payment for mental health services provided by telehealth and audio-only technology under the same limitations and restrictions.

    In the rule, the Appropriate Use Criteria program penalty phase is delayed, taking into account the impact that the PHE has had on providers and beneficiaries. The program’s payment penalty will initiate on Jan. 1, 2023, or the Jan. 1 that follows the declared end of the PHE, whichever is later, instead of Jan. 1, 2022.

    For the Medicare Shared Savings Program, CMS established a longer transition for the Accountable Care Organizations to report electronic clinical quality measure/Merit Based Incentive Payment System (MIPS) all payer quality measures. CMS extends the use of the CMS Web Interface as a collection type for an additional three years, through performance year 2024.

    CMS also established exceptions to the requirement for electronic prescribing of controlled substances and extends the start date for compliance actions to Jan. 1, 2023.

    Quality Payment Program

    In the Quality Payment Program section of the rule, CMS finalizes changes to reporting and participation options for providers in the program.

    In 2023, the MIPS Value Pathways (MVPs) will go into effect, beginning with seven measure options. The rule establishes scoring policies for MVPs and subgroups. Beginning in the 2026 performance year, multispecialty groups must form subgroups if they report MVPs. Subgroup reporting enables reporting of information about performance at a more granular level and would be limited only to clinicians reporting through MVPs or Alternative Payment Model Performance Pathway. To allow for a transition, subgroup reporting would be voluntary for the 2023, 2024, and 2025 performance years.

    The rule also makes the following notable changes to MIPS for the 2022 performance year (2024 payment year):

    • Performance Category Weights: For 2022 performance year/2024 payment year, the performance category weights are: 30% for quality, 30% for cost, 15% for improvement activities, and 25% for promoting interoperability.
    • Promoting Interoperability: Revises reporting requirements for promoting interoperability.
    • Cost Performance Category: Adds five new episode cost-measures to the cost category.
    • Performance Threshold: Establishes a performance threshold of 75 points, an increase of 15 points from last year.

    CMS also released a Physician Fee Schedule fact sheet and Quality Payment Program resources along with the rule.