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2022 Medicare Physician Fee Schedule: What You Need to Know

2022 Medicare Physician Fee Schedule: What You Need to Know

The Centers for Medicare and Medicaid Services (CMS) recently published the final rule of the Medicare Physician Fee Schedule (MPFS) 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 $33.60, a $1.29 (or 3.75 percent) decrease from the final CY 2021 PFS conversion factor of $34.89. 

Apart from the conversion factor decreases, physicians’ Medicare income will be negatively impacted even further if the pause in the two-percent sequestration cuts are allowed to expire, as planned, on December 31, 2021, and if the 4 percent Medicare cuts under the Statutory Pay-As-You-Go (PAYGO) Act are allowed to go into effect on January 1, 2022.

In addition to changing the payment rates for 2022, CMS also finalized changes to several payment policies. We’ve highlighted a few of the biggest below.

Split (or Shared) E/M Visits

CMS is refining 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.” Earlier this year, the Split/Shared services section was 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 finalizing:

  • 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” where at least one of the practitioners provides in-person care.
  • Specify that the practitioner who provides the substantive portion of the visit would bill for the visit. For 2022, the “substantive portion” can be one of the three key components (history, exam, or medical decision making [MDM]), or more than half of the total time spent. Beginning in 2023, the substantive portion of the visit will be defined only as more than half of the total time spent. For critical care services, the substantive portion of the visit will be defined only as more than half of the total time spent beginning in 2022.
  • 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.

CMS emphasized that providers can continue to select the visit level for the E/M split (or shared) visit based on MDM, even though the substantive portion of the visit is determined based on time. As well, time will be used to determine the substantive portion of split (or shared) emergency department E/M visits, even though code selection in the ED is not determined based on time. 

CMS also finalized the following list of activities that can count when determining time, regardless of whether or not they involve direct patient contact. This list would also apply within the emergency department setting, though not for critical care services, which has its own list of activities:

  • Preparing to see the patient (for example, review of tests).
  • Obtaining and/or reviewing separately obtained history.
  • Performing a medically appropriate examination and/or evaluation.
  • Counseling and educating the patient/family/caregiver.
  • Ordering medications, tests, or procedures.
  • Referring and communicating with other health care professionals (when not separately reported).
  • Documenting clinical information in the electronic or other health record.
  • Independently interpreting results (not separately reported) and communicating results to the patient/ family/caregiver.
  • Care coordination (not separately reported).

Practitioners would not count time spent on the following:

  • The performance of other services that are reported separately.
  • Teaching that is general and not limited to discussion that is required for the management of a specific patient.

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 finalized:

  • 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.  
  • Allow critical care services to 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 the practitioner documents that the E/M visit was provided prior to the critical care service at a time when the patient did not require critical care, the visit was medically necessary, and the services are separate and distinct, with no duplicative elements from the critical care service provided later in the day. Practitioners must report modifier -25 on the claim when reporting these critical care services. 
  • Allow critical care services to be paid separately in addition to a procedure with a global surgical period if the critical care is unrelated to the surgical procedure. Preoperative and/or postoperative critical care may be paid in addition to the procedure if the patient is critically ill (meets the definition of critical care) and requires the full attention of the physician, and the critical care is above and beyond and unrelated to the specific anatomic injury or general surgical procedure performed (e.g., trauma, burn cases). A new modifier will be created for use on such claims to identify that the critical care is unrelated to the procedure. If care is fully transferred from the surgeon to an intensivist (and the critical care is unrelated), the appropriate modifiers must also be reported to indicate the transfer of care.

Physician Assistant (PA) Services

Beginning January 1, 2022, CMS will allow direct payments to physician assistants (PAs) for professional services, and PAs can bill Medicare directly for their services and reassign payment for their services.

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 have not had the option to reassign payment for their services or to incorporate with other PAs to bill the program for PA services. 

Teaching Physician Services

CMS has clarified that when time is used to determine an office/outpatient E/M visit level for services provided by residents under the supervision of a teaching physician, only the time that a teaching physician spends in qualifying activities, including time that the teaching physician was present with the resident performing those activities, 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.

Also, 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 has now determined that under the primary care exception, only medical decision making (MDM) can be used to select the office/outpatient E/M visit level, “to guard against the possibility of inappropriate coding that reflects residents’ inefficiencies rather than a measure of the total medically necessary time required to furnish the E/M services.”

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. In the 2022 Medicare PFS, CMS has finalized how that guideline will be enacted.

For services furnished during calendar year (CY) 2022, the coinsurance amount paid for planned colorectal cancer screening tests that require additional related procedures will be equal to 20 percent of the lesser of the actual charge for the service or the amount determined under the fee schedule that applies to the test. For CYs 2023 through 2026, the amount will be 15 percent. For CYs 2027 through 2029, the amount will be 10 percent. And beginning CY 2030, the amount will be 0 percent.

According to CMS, the reduction of the coinsurance percentage 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 made several modifications to telehealth in the 2022 PFS.

First, CMS will allow certain services added to the Medicare telehealth list under the COVID-19 PHE to remain on the list until the end of December 31, 2023. According to CMS, this extension will allow  “additional time for us to evaluate whether the services should be permanently added to the Medicare telehealth services list.”

Also during 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. For instance, geographic restrictions were removed and the beneficiary’s home was added as a permissible originating site for telehealth 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 requiring 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 12 months thereafter.

CMS also is amending 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 stipulates 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 will be required to indicate when audio-only interactive telecommunications are used.

Vaccine Administration Services

Effective January 1, 2022, CMS will increase payment per dose for the administration of the influenza, pneumococcal and hepatitis B virus vaccines from $17 to $30. In addition, CMS will maintain the current payment rate of $40 per dose for the administration of the COVID-19 vaccines through the end of the calendar year in which the ongoing PHE ends. Effective January 1 of the year following the year in which the PHE ends, the payment rate for COVID-19 vaccine administration will be set at a rate to align with the payment rate for the administration of other Part B preventive vaccines.

CMS also will continue the additional payment of $35.50 for COVID-19 vaccine administration in the home under certain circumstances through the end of the calendar year in which the PHE ends.

Appropriate Use Criteria (AUC) Program

CMS will 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.”

Previously, the payment penalty phase of the AUC program was set to begin January 1, 2022.

MIPS

The Quality Payment Program enters its 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 and ramp up over three performance years, with the traditional MIPS program running concurrently until the MVP program is fully operational.

“We recognize that there are many types of MVPs we need to develop, and that the traditional MIPS framework is needed until we have a sufficient number of MVPs available,” CMS says. “Through the MVP development work, we’ll gradually implement MVPs for more specialties and subspecialties that participate in the program.”

CMS has finalized adoption of seven speciality MVPs with some modifications:

  • Advancing Rheumatology Patient Care
  • Coordinating Stroke Care to Promote Prevention and Cultivate Positive Outcomes
  • Advancing Care for Heart Disease
  • Optimizing Chronic Disease Management
  • Adopting Best Practices and Promoting Patient Safety within Emergency Medicine (finalized with modification)
  • Improving Care for Lower Extremity Joint Repair (finalized with modification)
  • Support of Positive Experiences with Anesthesia (finalized with modification)

Participation options will be made available for individual clinicians, single specialty groups, multispecialty groups, subgroups, and APM entities beginning in 2023. Multispecialty groups would be required to form subgroups in order to report MVPs beginning in 2026.

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, one 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.

Traditional MIPS

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

MIPS Eligible Clinician Definition

CMS has revised the definition of a MIPS eligible clinician to include:

  • Clinical social workers.
  • Certified nurse midwives.

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 from 40% in 2021)
  • Cost = 30% (up from 20% in 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 finalized for the 2022 performance period, the performance threshold will be increased to 75 points, up from 60 in 2021, and the exceptional performance threshold will 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 PeriodPayment YearPerformance ThresholdExceptional Performance BonusPayment Adjustment
20172019370Up to +/- 4%
201820201570Up to +/- 5%
201920213075Up to +/- 7%
202020224585Up to +/- 9%
202120235085Up to +/- 9%
202220247589Up to +/- 9%
20232025TBD0Up to +/- 9%

Performance Category Updates

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

  • Quality: Update quality measure scoring to remove end-to-end electronic reporting and high priority/outcome measure bonus points, beginning with the 2022 performance period; remove the 3-point floor for scoring measures beginning with the 2023 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 so that there will be a total of 200 quality measures available for the 2022 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]); apply case minimums of 20 episodes to these measures, except for melanoma resection, which will have a 10 episode case minimum.
  • Improvement Activities: Add 7 new improvement activities, 3 of which are related to promoting health equity; modify 15 current improvement activities, 11 of which address health equity.
  • Promoting Interoperability: Apply automatic reweighting to clinical social workers and small practices; make some revisions to reporting requirements.

Learn More

For more information about the final rule, including numerous policies that we didn’t have room to highlight, check out the following resources:

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Charity Singleton Craig

Charity Singleton Craig is a freelance writer and editor who provides communications and marketing services for CIPROMS. She is responsible for creating, editing, and managing all content, design, and interaction on the company website and social media channels in order to promote CIPROMS as a thought leader in healthcare billing and management.

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