2022 Proposed Medicare Physician Fee Schedule: What You Need to Know

The Centers for Medicare and Medicaid Services (CMS) recently published the proposed draft of the Medicare Physician Fee Schedule (PFS) for 2022.

At the heart of the MPFS is the annual conversion factor update. After legislatively mandated adjustments, including the expiration of the 3.75 percent payment increase provided for 2021 by the Consolidated Appropriations Act (CAA), the 2022 conversion factor will be $33.58, a $1.31 (or 3.75 percent) decrease from the final 2021 PFS conversion factor of $34.89. As well, physician income will be negatively impacted even further if the pause in the two-percent sequestration cut is allowed to expire, as planned, on December 31, 2021.

In addition to changing the payment rates for 2022, the Proposed Rule also recommends changes to several payment policies. We’ve highlighted a few of the biggest.

Split (or Shared) E/M Visits

CMS is proposing to refine their longstanding policies for split (or shared) evaluation and management (E/M) visits to “better reflect the current practice of medicine, the evolving role of non-physician practitioners (NPPs) as members of the medical team, and to clarify conditions of payment that must be met to bill Medicare for these services.” The Split/Shared services section was recently removed from the Medicare Internet-Only Manual (IOM) in response to a petition to the U.S. Department of Health & Human Services (HHS).

The following are some of the changes CMS is proposing:

Update the definition of split (or shared) E/M visits as “evaluation and management (E/M) visits provided in the facility setting by a physician and an NPP in the same group.”
Specify that the practitioner who provides the substantive portion of the visit (more than half of the total time spent) would bill for the visit.
Allow split (or shared) visits to be reported for new as well as established patients, and initial and subsequent visits, as well as prolonged services.
Require reporting of a modifier on the claim to help ensure program integrity.
Require documentation in the medical record to identify the two individuals who performed the visit. The individual providing the substantive portion must sign and date the medical record.

Critical Care Services

The Critical Care services section also was recently removed from the Medicare Internet-Only Manual (IOM) in response to a petition to HHS, and the following policy changes have been proposed:

Use American Medical Association (AMA) Current Procedural Terminology (CPT) prefatory language as the definition of critical care visits, including bundled services.
Allow critical care services to be furnished concurrently to the same patient on the same day by more than one practitioner representing more than one specialty.
Allow critical care services to be furnished as split (or shared) visits.
Prohibit other E/M visits to be billed for the same patient on the same date as a critical care service when the services are furnished by the same practitioner, or by practitioners in the same specialty and same group to account for overlapping resource costs.
Ban critical care visits from being reported during the same time period as a procedure with a global surgical period.

Physician Assistant (PA) Services

CMS plans to make direct payment to Physician Assistants (PA) for professional services they furnish beginning January 1, 2022.

Currently, PAs cannot bill and be paid directly by Medicare for their professional services, and instead, Medicare makes payments for PA services to their employers or independent contractors. PAs also did not have the option to reassign payment for their services or to incorporate with other PAs to bill the program for PA services.

If the proposal is finalized, beginning January 1, 2022, PAs can bill Medicare directly for their services and reassign payment for their services.

Teaching Physician Services

CMS is proposing that when total time is used to determine an office/outpatient E/M visit level, only the time that a teaching physician was present can be included. Services provided by residents without a teaching physician present are compensated elsewhere within the Medicare program as part of the graduate medical training program under Medicare Part A.

During the COVID-19 public health emergency (PHE), the teaching physician’s timed presence also can include audio/video real-time communications technology. Outside the circumstances of the COVID-19 PHE, the teaching physician presence requirement can be met through audio/video real-time communications technology only in residency training sites that are located outside of a metropolitan statistical area.

In the case of certain primary care centers, Medicare makes PFS payment for certain E/Ms of lower and midlevel complexity furnished by a resident without the physical presence of a teaching physician. CMS is now proposing that under the primary care exception, only medical decision making (MDM) can be used to select the office/outpatient E/M visit level.

“In the context of teaching hospital primary care centers that are staffed by residents and teaching physicians, we believe that MDM would be a more accurate indicator of the complexity of the visit as opposed to time. Because residents are in training, they may need more time than is reflected in the code descriptor to furnish a visit that has a low-level of medical decision making,” CMS says.

Changes to Beneficiary Coinsurance When Colorectal Cancer Screening Become Diagnostic

Section 122 of the CAA includes a special coinsurance rule for procedures that are planned as colorectal cancer screening tests (“flexible screening sigmoidoscopies” and “screening colonoscopies, including anesthesia furnished in conjunction with the service”) but become diagnostic tests when the practitioner identifies the need for additional services (e.g., removal of polyps).

At present, the addition of any procedure beyond the planned colorectal screening (for which there is no coinsurance) results in the beneficiary having to pay coinsurance. However, Section 122 of the CAA reduces, over time, the amount of coinsurance a beneficiary will pay for such services, and in the 2022 Proposed Rule, CMS has proposed how that guideline might be enacted.

For services furnished on or after January 1, 2022, the coinsurance amount paid for planned colorectal cancer screening tests that require additional related procedures shall be equal to a specified percent (i.e., 20% for CY 2022, 15% for CYs 2023 through 2026, 10% for CYs 2027 through 2029, and zero percent beginning CY 2030) of the lesser of the actual charge for the service or the amount determined under the fee schedule that applies to the test.

According to CMS, the reduction of the coinsurance percentage over time will hold true regardless of the code that is billed, for diagnosis, removal of tissue or other matter, or another procedure furnished in the same encounter as the screening.

Telehealth

CMS has proposed several modifications to telehealth in the 2022 PFS.

First, CMS is proposing to allow certain services added to the Medicare telehealth list under the COVID-19 PHE to remain on the list to the end of December 31, 2023, so that “there is a glide path to evaluate whether the services should be permanently added to the telehealth list following the COVID-19 PHE.”

The CAA made several changes to telehealth services when used for the purposes of diagnosis, evaluation, or treatment of a mental health disorder. First, geographic restrictions were removed and the beneficiary’s home was added as a permissible originating site for telehealth such services. The CAA also added a requirement that there be an in-person, non-telehealth service with the physician or practitioner within six months prior to the initial telehealth service, and thereafter, at intervals as specified by the Secretary.

To meet that requirement, CMS is proposing to require an in-person, non-telehealth service be provided by the physician or practitioner furnishing mental health telehealth services within six months prior to the initial telehealth service, and at least once every six months thereafter.

CMS also is proposing to amend the current requirement for interactive telecommunications systems, defined as multimedia communications equipment that includes, at a minimum, audio and video equipment permitting two-way, real-time interactive communication, to include audio-only communication technology when used for telehealth services for the diagnosis, evaluation, or treatment of mental health disorders furnished to established patients in their homes.

That amendment would also stipulate that such use of audio-only interactive telecommunications would be limited to practitioners who have the capability to furnish two-way, audio/video communications, but where the beneficiary is not capable of using, or does not consent to, the use of two-way, audio/video technology. A new modifier also is proposed to indicate when audio-only interactive telecommunications are used.

Appropriate Use Criteria (AUC) Program

CMS is proposing to delay the payment penalty phase of the AUC program on the later of January 1, 2023, or the January 1 that follows the declared end of the PHE for COVID-19. According to CMS, “This flexible effective date is intended to take into account the impact that the PHE for COVID-19 has had and may continue to have on practitioners, providers and beneficiaries.”

Currently, the payment penalty phase of the AUC program is set to begin January 1, 2022.

MIPS

The Quality Payment Program enters is sixth year in 2022, and according to CMS, by fulfilling certain statutory requirements set forth in the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA), “we anticipate clinicians will start to see greater returns on their investment in the program as we see higher payment adjustments as well as begin to see a more equitable distribution within our scoring system and small practices no longer bearing the greatest share of the negative payment adjustments.”

MIPS Value Pathways

The biggest change to the program will be the MIPS Value Pathways (MVPs), which allow for a more cohesive participation experience by connecting activities and measures from the four MIPS performance categories that are relevant to a specialty, medical condition, or episode of care. According to CMS, the MVPs include the Promoting Interoperability performance category and population health claims-based measures as foundational elements, along with relevant measures and activities for the quality, cost, and improvement activities performance categories.

MVPs will begin in the 2023 MIPS performance year with seven MVPs based on the following topics: Rheumatology, Stroke Care, Ischemic Heart Disease, Chronic Disease Management, Emergency Medicine, Lower Extremity Joint Repair, and Anesthesia. Participation options will be made available for individual clinicians, single specialty groups, multispecialty groups, subgroups, and APM entities. Beginning in the 2025 performance year, we propose that multispecialty groups would be required to form subgroups in order to report MVPs.

MVP Participants would be required to report the following:

Foundational Layer (MVP agnostic): Population Health Measures (MVP Participants would select at the time of MVP Participant registration, 1 population health measure to be calculated on.) AND Promoting Interoperability Performance Category (MVP Participants would report on the same Promoting Interoperability measures required under traditional MIPS, unless they qualified for automatic reweighting or had an approved hardship exception.)
Quality Performance Category: MVP Participants would select 4 quality measures, including one outcome measure.
Improvement Activities Performance Category: MVP Participants would select 2 medium-weighted activities or one high-weighted activity.
Cost Performance Category: CMS would calculate performance exclusively on the cost measures that are included in the MPV using administrative claims data.

CMS will also maintain the traditional MIPS framework until they have a sufficient number of MVPs available.

Traditional MIPS

For 2022, the traditional MIPS framework will be in place for all providers, and the following guidelines have been proposed.

Quality and Cost Performance Category Weighting

Performance categories will be weighted as follows for 2022, representing changes from 2021 (as noted below):

Quality = 30% (down 10% from 2021)
Cost = 30% (up 10% from 2021)
Promoting Interoperability = 25%
Improvement Activities = 15%

By law, the Cost and Quality performance categories must be equally weighted at 30% beginning in the 2022 performance period.

Performance Threshold and Payment Adjustments

Also proposed for the 2022 performance period, the performance threshold would increase to 75 points, up from 50 in 2021, and the exceptional performance threshold would be raised to 89 points, up from 85 in 2021.

Under section 1848(q)(6)(C) of MACRA, the additional MIPS adjustment factors for exceptional performance are available only through the 2022 performance year, making this the last year of the additional performance threshold and the associated additional MIPS adjustment factors for exceptional performance.

As well, in 2020, the MIPS program reached the maximum negative payment adjustment of -9 percent, with positive payment adjustments up to a factor of 9 percent, and those adjustments will remain the same for 2022.

Performance Period	Performance Threshold	Exceptional Performance Bonus	Payment Adjustment
2017	3	70	Up to +/- 4%
2018	15	70	Up to +/- 5%
2019	30	75	Up to +/- 7%
2020	45	85	Up to +/- 9%
2021	50	85	Up to +/- 9%
2022	75	89	Up to +/- 9%

Performance Category Updates

Among the various performance categories, the following updates and changes have been proposed for 2022 and beyond:

Quality: Update quality measure scoring to help move away from the policies established for the transitional period of MIPS; use performance period benchmarks, or a different baseline period, such as calendar year 2019, for scoring quality measures in the 2022 performance period; extend the CMS Web Interface as a quality reporting option for registered groups, virtual groups, or other APM Entities for the 2022 performance period; update the quality measure inventory (a total of 195 proposed for the 2022 performance period); increase the data completeness requirement to 80% beginning with the 2023 performance period.
Cost: Add 5 new episode-based cost measures, including two procedural measures (melanoma resection, colon and rectal resection), one acute inpatient measure (sepsis), and two chronic condition measures (diabetes, asthma/chronic obstructive pulmonary disease [COPD])
Improvement Activities: We’re proposing the addition of 7 new improvement activities, 3 of which are related to promoting health equity, and the modification of 15 current improvement activities, 11 of which address health equity.

Comment

Submit comments about the 2022 Medicare Physician Fee Schedule using one of the methods below, no later than 5 p.m. on September 13, 2022. In commenting, please refer to file code CMS-1751-P.

Electronically: Visit http://www.regulations.gov and follow the “Submit a comment” instructions.

Regular Mail: Send comments to the following address: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1734-P, P.O. Box 8016, Baltimore, MD 21244-8016.

Express or Overnight Mail: Send comments to the following address: Centers for Medicare & Medicaid Services, Department of Health and Human Services, Attention: CMS-1751-P, Mail Stop C4-26-05, 7500 Security Boulevard, Baltimore, MD 21244-1850