CMS on Tuesday released its final rule to update the Medicare Physician Fee Schedule (MPFS) for calendar year (CY) 2022. The MPFS will, among other things, boost payments for some physicians, reduce payments for others, and expand the list of telehealth services that Medicare covers.

Read on for Advisory Board's initial takeaways from the CY 2022 MPFS final rule.

Dec. 2 webinar: What the final outpatient and physician payment rules mean for health care

CMS finalizes cut to conversion factor

CMS finalized a CY 2022 Physician Conversion Factor of $33.59, down $1.30, or 3.71%, from the 2021 Physician Conversion Factor. The conversion factor reflects a budget neutrality adjustment that accounts for changes in relative value units (RVUs) that are converted into PFS payments rates, as required by federal law.

The conversion factor reduction is largely a result of the expiration of a 3.75% payment bump for CY 2021 included in the Consolidated Appropriations Act (CAA) of 2021 to help physiciansimpacted by the Covid-19 pandemic.

This combination of reduced conversion factor and RVU changes means primary care providers and medical specialists will see payment increases, while surgeons and proceduralists will see decreases—but not as steep as originally expected under the CY 2021 final rule. (Some surgical specialties were facing a cut of almost 10% of their Medicare reimbursement under that final rule, while other medical specialties—such as endocrinology—were slated to see an increase of 15% or more.) However, without congressional intervention, physicians face several additional payment cuts, including a 2% sequester cut set to resume January 1, 2022, and a 4% PayGo cut triggered by the American Rescue Plan.

Like in 2020, physician stakeholders are urging Congress to alleviate at least some of these cuts in light of the lingering pandemic via the end-of-the-year reconciliation package.

CMS continues redistribution of physician payment

CMS in the final rule said it is "engaged in an ongoing review of payment for E/M visit code sets," suggesting the Biden administration is taking more time to consider the impacts of—and possible adjustments to—Trump-era changes.

However, the overall effect of this final rule suggests the Biden administration is continuing the previous administration's path of rewarding upstream services and decreasing reimbursement for costly procedures.

Clinical labor pricing updates follow physician payment swings

CMS in the 2022 Medicare Physician Fee Schedule final rule noted that it has not updated clinical labor pricing since CY 2002, and that stakeholders in the past have raised concerns about the "long delay." CMS also noted that CY 2022 marks the final year of the supply and equipment pricing update. Therefore, the agency is updating the clinical labor pricing over a four-year period to ensure it remains relevant and up to date. The updates varied across labor description, ranging from 0% for behavioral health care manager to 105% for orthoptist.

CMS said that, as a result of the updates, some specialties—such as portable X-ray, family practice, endocrinology, hand surgery, and general practice—will see payment increases. Other specialties—including interventional radiology, vascular surgery, radiation oncology, and oral/maxillofacial surgery—will see payment decreases.

Advanced practice providers continue to grow in stature

CMS' final rule included policy changes that benefit advanced practice providers (APPs). For example, CMS adjusted the definition of split (or shared) E/M visits to include services provided by non-physician practitioners in the same group. In addition, beginning January 1, 2022, physician assistants will be able to bill Medicare directly for services they provide under Part B.

These changes reflect the evolving status of NPs and PAs as autonomous providers—a shift that has been helped by the role they played during the pandemic and the loosening of state scope-of-practice laws.

CMS continues incremental expansion of telehealth services, particularly for behavioral health

CMS finalized that certain telehealth services—including certain cardiac and intensive cardiac rehabilitation codes—will be added to Medicare's approved telehealth list until the end of 2023. This will allow Medicare to reimburse those services as policymakers gather more data to determine whether these services should be permanently added. CMS also clarified that mental health services can include services for treatment of substance use disorders (SUDs).

CMS added audio-only communication technology to the approved list of interactive telecommunications systems when used for diagnosing, evaluating, or treating mental health disorder patients at home. However, CMS said providers must have the capability to conduct two-way audio-video communication. CMS said it will allow audio-only if the patient does not have a video option—a policy change that makes it easier for all patients to access care, especially those affected by digital inequities like poor broadband in their communities and limited digital literacy skills.

Under the final rule, a patient's home will be a permissible place for mental health services, making it more convenient and easier for patients to access this care. However, CMS finalized a requirement for any mental health telehealth services to be preceded by an in-person service at least six months before the telehealth service. Instead of requiring at least one in-person visit every six months after the initial telehealth visit as proposed, CMS is requiring the HHS Secretary to establish a frequency for subsequent in-person visits.

The Quality Payment Program is getting harder—and MIPS is headed for an overhaul

When we look at finalized updates to the Quality Payment Program (QPP), we see that CMS is moving to expand the Merit-Based Incentive Payment System (MIPS) track. Starting with performance year (PY) 2022, certified nurse midwives and clinical social workers will be included as MIPS-eligible clinicians.

As mandated by statute, CMS is also raising the bar for MIPS participants to earn incentives. MIPS performance thresholds will increase in 2022, with the minimum performance threshold to avoid a penalty rising from 60 points in 2021 to 75 points in 2022, and the exceptional performance threshold rising from 85 points to 89 points.

At the same time, CMS made many incremental updates within each MIPS performance category. One noteworthy change, given the ongoing pandemic, is CMS’ effort to incorporate a greater emphasis on public health reporting. Starting with PY 2022, the Promoting Interoperability (PI) performance category requires participants to invest in reporting the electronic case reporting (eCR) measure—much like the new requirement CMS recently finalized for the hospital PI program. But CMS unexpectedly broke from the hospital PI requirement by adding a fourth available exclusion for this MIPS measure that is not available under hospital PI. MIPS participants will be able to claim this new exclusion if they use certified electronic health record technology (CEHRT) that isn't certified to eCR certification criteria prior to the start of their selected performance period for 2022.

The most significant change for MIPS will come in PY 2023, when CMS launches MVPs—the agency's largest overhaul of the MIPS track since the QPP’s launch. CMS finalized most of the requirements, scoring details, and the transition timeline for MVPs that the agency outlined earlier this year in the 2022 MPFS proposed rule. For example, CMS finalized its plan to kick off the new pathway in PY 2023 with voluntary reporting through seven specialty-focused MVPs. CMS also said it still aims to sunset traditional MIPS and replace it with MVPs starting with PY 2028. But CMS finalized one key change to its MVP timeline that’s good news for multispecialty groups: CMS had proposed requiring multispecialty groups that voluntarily participate in MVPs to report via subgroup starting with PY 2025, but the agency delayed that requirement to PY 2026.

Medicare Shared Savings Program (MSSP) Accountable Care Organizations (ACOs) also got some welcome news with the final rule: CMS is slowing its pace when it comes to implementing the QPP's new APM Performance Pathway. MSSP ACOs historically have used the CMS Web Interface to report quality measures under both their ACO contract and for MIPS. With the APM Performance Pathway's launch, CMS originally had intended to sunset the Web Interface at the end of PY 2021. However, in recognition of the burden that transition could place on ACOs, CMS earlier this year proposed permitting ACOs to continue using the Web Interface through PY 2023. But now, with the MPFS final rule, ACOs can continue using the Web Interface through PY 2024.

We'll continue to provide additional commentary and analysis as we read through the final rule. Be sure to join our webinar on December 2 for a deep dive into the proposals.