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What the 2022 Medicare Physician Fee Schedule Means for Your Practice
Changes to physician payments and telehealth services
Every year, the Medicare Physician Fee Schedule (PFS) includes policy changes that have a significant impact on physicians and physician practices, and the recently finalized PFS rule for 2022 is no exception. Officially published in the Federal Register on November 19 and generally effective on January 1, 2022, the 2022 PFS final rule contained many regulatory changes important to physician practices.
While the rule contains updates on a variety of issues, two particularly notable areas addressed by the PFS final rule this year are changes to physician payment rates and reimbursement for telehealth services.
- Reduction in Physician Payments
Physicians in many specialties are likely to face Medicare payment cuts in 2022 under the provisions of the 2022 PFS. The 2022 PFS final rule set the “conversion factor” at $33.5983—a 3.71% decrease from the 2021 level. While this change may seem like just a technical matter, it makes a big difference to physician practices; Medicare payment rates are set by multiplying the Relative Value Units (RVUs) assigned to a physician service by the conversion factor. As a result, a decrease in the conversion factor directly leads to a corresponding reduction in physician payments. In December 2020, Congress appropriated $3 billion to prevent a similar 3.75% reduction from being implemented for this past year, and many physician advocacy organizations (including the American Medical Association and the Medical Group Managers Association) are pressing Congress to restore this funding again for 2022. However, it is unclear if Congress will have the appetite to do so after having potentially already passed two large spending bills in the last few months of 2021.
According to the AMA, the reduced 2022 PFS payment rates, combined with other potential cuts to Medicare physician payments, could produce a combined 9.75% cut for some physicians in 2022. We encourage all Curi members to reach out to their professional associations to learn more about these potential payment reductions.
- Reimbursement for Telehealth Services
The PFS offered practices some good news about reimbursement for telehealth services in the short term, but there continues to be no long-run reimbursement certainty for many services. Notably, the Centers for Medicare and Medicaid Services (CMS) announced that services that had been added to the Medicare telehealth services list temporarily during the COVID-19 public health emergency will continue to be covered until the end of 2023. CMS also added coverage for some additional services during this time period. This extension gives CMS additional time to determine whether these services will be covered on a permanent basis. However, CMS did not permanently add any services to the Medicare telehealth services list in response to requests from the public.
The PFS also implemented provisions of the Consolidated Appropriations Act of 2021 that allow a patient’s home to be a permissible originating site for telehealth services for the diagnosis, evaluation, or treatment of mental health disorders. The rule requires the practitioner providing these services to have an in-person, non-telehealth service with the patient within six months prior to the initial telehealth service and at least once every 12 months, although there can be exceptions. CMS also is permitting the use of audio-only communications technology for telehealth services for the diagnosis, evaluation, or treatment of mental health disorders furnished to established patients in their homes, but only when the practitioner’s communication system can furnish two-way audio-video communications and audio-only is being used because the patient is not capable of, or does not consent to, the use of two-way audio-video technology.
Additional information about these changes to physician payment rates and telehealth reimbursement, as well as about other important changes included in the 2022 PFS—such as payments for vaccine administration services and modifications to the billing requirements for split (or shared) evaluation and management visits—can found in the CMS Fact Sheet on the final rule.
To learn more about how the 2022 PFS may affect your practice, as well as the other ways that Curi Advisory’s Health Policy services can help you, please contact us at sam.cohen@curi.com or 919-878-7602.
