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CMS Releases Medicare Physician Fee Schedule Proposed Rule for 2022

By AOA Staff

07.16.21

On July 13, 2021, the Centers for Medicare & Medicaid Services (CMS) issued a proposed rule updating payment and regulatory changes for the Medicare Physician Fee Schedule (PFS) for calendar year (CY) 2022.  The proposed rule includes several new proposals authorized under the Consolidated Appropriations Act of 2021.  It also addresses changes to the Quality Payment Program (QPP) for the 2022 performance year and the Medicare Diabetes Prevention Program. Included among the QPP changes is a proposal for a new MIPS Value Pathway framework for chronic disease management that the AOA co-developed with CMS.

Physician Fee Schedule Highlights

CY 2022 PFS Ratesetting and Conversion Factor

Under the proposed rule, physicians would see an across-the-board $1.31 reduction in PFS services.  For CY 2022, CMS estimates a conversion factor (CF) of $33.58 down from the current CF of $34.89.  The estimated CF reflects a -0.14 percent statutorily mandated budget neutrality adjustment, a 0.00 percent update adjustment factor, and the expiration of the 3.75 percent increase funded by the Consolidated Appropriations Act of 2021.  For anesthesia services, CMS estimates the CY 2022 CF to be $21.04 percent, a $0.52 decrease from the current $21.56 CF.

CMS also proposes a series of standard technical proposals involving practice expenses, including the implementation of the fourth year of the market-based supply and equipment pricing update, changes to the practice expense for many services associated with the proposed update to clinical labor pricing, and standard rate-setting refinements.

Evaluation and Management (E/M) Visits

For CY 2022, CMS is proposing a number of refinements to split (or shared) E/M visits to better reflect the evolving role of non-physician practitioners (NPPs) as members of the medical team, critical care services, and services furnished by teaching physicians involving residents.

Telehealth Services under the PFS

As CMS continues to evaluate the temporary expansion of telehealth services that were added to the Medicare telehealth list during the COVID-19 Public Health Emergency (PHE), CMS proposes maintaining certain services on the list until December 31, 2023, to determine if the services should be adopted permanently after the PHE expires. CMS is further proposing to require an in-person, non-telehealth service for mental health within six months prior to the initial telehealth service, and at least once every six months thereafter, and to allow use of audio-only communication technology for diagnosis, evaluation, or treatment of mental health disorders furnished to established patients in their homes.

Physician Assistant (PA) Services

Beginning January 1, 2022, CMS proposes to directly pay PAs for their professional services as authorized by the Consolidated Appropriations Act.  Currently, Medicare can only make payment to the employer or independent contractor of a PA. Consequently, PAs cannot bill and be paid directly by Medicare, and they do not have the option to reassign payment for their services.

Vaccine Administration Services

The rule solicits information on the COVID-19 PHE may have impacted costs involved in furnishing preventive vaccines (flu, pneumonia and hepatitis B vaccines) to develop more accurate rates for these services. The pandemic has highlighted the importance of access to COVID-19 and other preventive vaccines. Over the last several years, Medicare payment rates for physicians and other providers who furnish vaccines have decreased by roughly 30 percent.  Specifically, CMS is seeking input on a preliminary policy to pay $35 add-on for certain vulnerable patients when they receive a COVID-19 vaccine at home, which settings qualify as the “home” and how to ensure program integrity without compromising patient access. In addition, CMS seeks comment on whether to treat COVID-19 monoclonal antibody products the same as other physician-administered drugs and biologicals under Medicare Part B.

Colorectal Cancer Screening

The Consolidated Appropriations Act authorizes CMS to reduce, over time, the amount of coinsurance a patient will pay for planned colorectal cancer screening tests that require additional related procedures (e.g., removal of polyps) for services furnished on or after January 1, 2022.

Rural Health Clinics (RHCs) and Federally Qualified Health Centers (FQHCs)

To address health disparities in rural and vulnerable populations, CMS is proposing to implement several provisions that would allow RHCs and FQHCs to furnish care to underserved Medicare patients. The Consolidated Appropriations Act authorizes CMS to allow RHCs and FQHCs to conduct mental health visits via telehealth, increase payment limits, and receive payment for hospice services.  CMS also proposes to allow RHCs and FQHCs to concurrently bill for chronic care management and transitional care management services, administer COVID-19 vaccines and amend regulations for tribal organizations.

Part B Drug Payment for Section 505(b)(2) Drugs

CMS is soliciting comment on a decision framework to assign certain Part B drug products to existing multiple source drug codes. This approach would be applied to section 505(b)(2) drug products where a billing code descriptor for an existing multiple source code describes the product and other factors, such as the product’s labeling and uses, are similar to products already assigned to the code. According to CMS, the framework approach is consistent with the concept of paying similar amounts for similar services and is an effort to curb drug prices.

Appropriate Use Criteria (AUC) Program

CMS is proposing to push back the current start of the payment penalty phase of the AUC program from January 1, 2022 to January 1, 2023, or the January 1 that follows the declared end of the PHE for COVID-19 should the PHE be extended beyond January 1, 2023. This flexible effective date is intended to consider the impact the COVID-19 PHE has had and may continue to have on practitioners, providers and patients.

Medicare Provider Enrollment

CMS is proposing several provider enrollment regulatory revisions to support program integrity of the Medicare program. The changes would exempt certain types of independent diagnostic testing facilities (IDTF) from supplier standards, expand the agency’s authority to deny or revoke a provider’s or supplier’s Medicare enrollment under certain circumstances, and establish specific rebuttal procedures in regulation for providers and suppliers whose Medicare billing privileges have been deactivated.

Quality Payment Program Highlights

MIPS Value Pathways

CMS is proposing to implement seven new MIPS Value Pathways (MVPs) beginning with the 2023 MIPS performance period/2025 payment year.  The first round of MVPs includes a framework for chronic disease management that CMS co-developed with the AOA.

The CMS also proposes to extend the Web Interface collection and submission tool for quality measure reporting into the 2022 and 2023 performance years for Medicare Accountable Care Organizations (ACOs), update Cost Measures and Improvement Activities for the MIPS program, and revise the reporting requirements for the Promoting Interoperability performance category.

APM Performance Pathways (APP)

CMS also proposes to allow MIPS eligible clinicians to report the APP as a subgroup beginning with the 2023 performance year.

CMS will accept comments on the proposed rule until September 13, 2021.  The proposed rule will appear in the Federal Register on 07/23/2021.  AOA staff will further analyze the proposed rule and prepare formal comments.