After considerable debate and uncertainty about proposed regulations put forth by the Centers for Medicare & Medicaid Services, CMS has released the 2022 Medicare Physician Fee Schedule Final Rule. Some of the concerns we have addressed in previous posts, such as the expected fee schedule changes and shared visit definitions we laid out here, have been recognized, and in this article, we’re going to detail all of the final implementations that will affect the industry going forward.
First, let’s cover the fee schedule changes. In our previous post, we noted that the proposed ruling said the Physician Fee Schedule conversion factor would go down from $34.89 in 2021 to a projected $33.58 in 2022, also noting that the 3.75% payment increase provided for CY 2021 by the Consolidated Appropriations Act will have expired. In the final rule, this has remained largely the same; CMS is setting the 2022 MPFS conversion factor (CF) at $33.5983, only a slight change from the proposed $33.58. The Anesthesia CF, which is calculated separately, is finalized at $20.93, a 2.90% decrease from the 2021 CF of $21.56.
So what does this mean for revenue? Overall, depending on the field, CMS estimates that this final rule will change allowed charges by anywhere from -5% to +6%, with most listed fields shifting by only one percentage point or remaining steady. However, this does not account for the expiration of the 2021 3.75% boost to the MPFS CF. If Congress does not intervene, there will be decreases across the board for 2022 — not only from the 3.75% impact, but from additional reductions that require Congressional action. For example, the -2% sequestration suspended during the Public Health Emergency is expected to be reinstated, and there is an additional -4% sequestration (PAYGO) due to the $1.9 Trillion American Rescue Plan.
Moving away from the topic of the Physician Fee Schedule, our previous posts about the proposed CMS rules addressed the future of telehealth coverage, something that became widespread in the early days of the pandemic. While all telehealth services are still being evaluated for permanent inclusion, CMS now says that services added to the Medicare telehealth services list that would have formerly expired at the end of this year will stay on said list through the end of 2023. Coding and payment for a longer virtual check-in service has been added permanently.
Along with telehealth, some readers may have held concerns about the start of the payment penalty phase of the Appropriate Use Criteria (AUC) Program, which was proposed to begin on January 1, 2022. In the final CMS rule, this start date has been pushed back to January 1, 2023 — or alternatively, the January 1 that follows the declared end of the COVID-19 public health emergency. This added flexibility is given to take into account the possible unforeseen impact of a continuing PHE on practitioners, providers and beneficiaries.
The topic of split (or shared) Evaluation & Management Visits, also known as E/M visits, is also addressed in the fee schedule changes. The final CMS rule seeks to update its policies in this area to better reflect current medical care, taking into account things like the changing role of non-physician practitioners (NPPs). While doing this, it also lays out what conditions must be met before Medicare can be billed for certain services. Here’s how that is explained in the text of the rule.
To start, the final rule defines split (or shared) E/M visits as E/M visits provided by a physician and an NPP in the same group in a facility setting. The visit is billed by whoever provides the substantive portion of the visit. For 2022, the definition of “substantive portion” can include medical decision-making, history, or physical exams, or can simply be defined as more than half of the total time (this does not apply for critical care, which is determined solely by who provides more than half of the total time). By 2023, “substantive portion” will be solidified as meaning more than half of total time spent. Of note, for 2022 and going forward, the “substantive portion” does not necessarily require a face-to-face component.
To close out our overview of the CMS final rule, we address the topic of vaccines. Vaccines have understandably been on the forefront of everyone’s minds as of late; waning vaccine efficacy over time and continuing COVID variants means that more people are, or will be, seeking booster shots. With regards to all COVID-19 vaccines, the final CMS rule maintains the current rate of $40 per dose of COVID-19 vaccine. This rate will be consistent through the end of the calendar year in which the COVID-19 Public Health Emergency ends; thereafter, the rate for COVID-19 vaccine administration will be set in alignment with the administration of other Part B preventive vaccines. For administration of influenza, pneumococcal, and hepatitis B virus vaccines, CMS will pay $30 per dose beginning on January 1, 2022.
Overall, some of our original concerns about the CMS final rule from previous articles remain. Nonetheless, we will continue to monitor the implementation of this final rule and will keep you updated accordingly.