Policy Playbook: 2022 Medicare Physician Fee Schedule Proposed Rule

Authors: Nicholas Melucci, MS-4 (@n_melucci); Summer Chavez, DO, MPH, MPM (Attending Physician, UT Houston) // Reviewed by: Alex Koyfman, MD (@EMHighAK); Brit Long, MD (@long_brit)

What’s the issue?

On July 13, 2021, The Centers for Medicare and Medicaid Services (CMS) proposed revisions (which are open to public discourse) to policies regulating Medicare payments under the Physician Fee Schedule (PFS) and Quality Payment Program (QPP)^1,3. The PFS and QPP regulation is the major annual regulation that alters Medicare payments for physicians and other health care practitioners in the following calendar year¹.

For context, certain Medicare payments have been made under the PFS since 1992³. In contrast to Medicare payments at a single rate for a full range of resources provided, PFS rates are paid to physicians and billing providers in a fee-for-service model^3,4. These payments are based on the approximate resources (i.e. physician work, practice expense, malpractice expense, etc.) used to provide the service which are then compiled into relative value units (RVUs) ^4,9. To determine the Medicare fee, a service’s RVUs are multiplied by a dollar conversion factor⁹.

The proposed revisions CMS has put forward for deliberation:

2022 Ratesetting and Conversion Factor

CMS has proposed a budget neutrality adjustment to account for changes in RVUs and expiration of the 3.75% payment increase provided for calendar year (CY) 2021 by the Consolidated Appropriations Act of 2021³. The proposed PFS conversion factor is $33.59, a decrease of $1.31 from the CY 2021 conversion factor of $34.89³.

Evaluation and Management (E/M) Visits

CMS has reviewed the recently enacted (January 1, 2021) AMA Current Procedural Terminology (CPT) Codebook to refine payment for E/M code sets³. CMS aims to revise policies regarding split (or shared) E/M visits, critical care services, and services furnished by teaching physicians involving residents³.

• Split (or shared) E/M visits- CMS’s proposed revisions to split (or shared) E/M visits:
  • Alteration of split (or shared) E/M visits definition to include care provided by a physician or NPP in the same group³
  • The practitioner who provides the substantiative portion of the visit (more than half of the total time spent) would bill for the visit³
  • Documentation in the medical record to identify individuals who perform the visit³

• Critical Care Services- CMS proposed revisions to long standing critical care policies:
  • Use of AMA CPT language to define critical care visits, including bundled services³
  • Allow critical care services to be provided to a patient on the same day by more than one practitioner representing more than one specialty³
  • No other E/M visit can be billed for the same patient on the same date as a critical care service when the services are provided by the same practitioner or by practitioners in the same specialty and same group to account for overlapping resource costs³

• Teaching Physician Services- CMS proposes that time when a teaching physician is present can be included when determining E/M visit level³

Telehealth Services under the PFS

CMS placed all emergency department E/M codes, critical care codes, and certain observation codes on the approved telehealth list for the remainder of the year after the COVID-19 public health emergency expires¹.

CMS states it needs more data and evidence about the benefits of providing emergency department E/M, critical care, and observation services via telehealth to permanently add these codes to the list of approved telehealth services¹.

Mental Health Telehealth Services

CMS is implementing a portion of the Consolidated Appropriations Act (CAA) that removes geographic restrictions and adds the home as an originating site for telehealth services specifically when treating patients with a mental health disorder¹.

Additionally, CMS is requiring that an in-person visit take place six months after the initial telehealth visit¹.

Impact for Infectious Disease on Codes and Ratesetting

CMS is looking for input regarding PHE-related costs that could be accounted for by creating new payment rates for new services regarding pandemic response¹

Physician Assistant (PA) Services

CMS is proposing that a portion of the CAA authorizes Medicare to make direct payments to PAs for services they provide under Part B beginning January 1, 2022³.

Appropriate Use Criteria (AUC) Program

The AUC program was created as part of the Protecting Access to Medicare Act¹. It will eventually require physicians ordering advanced imaging for Medicare beneficiaries to first use the AUC’s approved clinical decision support mechanisms for the ordering provider to receive payment¹.

The AUC requirements have been delayed several times, and CMS proposes the delay continues until January 1, 2023¹.

Electronic Prescribing of Controlled Substances– Section 2003 of the SUPPORT Act

CMS is continuing to implement a provision of the SUPPORT Act, which requires that the prescribing of controlled substances under Medicare Part D be done electronically¹.

CMS has proposed certain criteria:

• Certain exemptions to the electronic prescribing of controlled substances (EPCS) requirement¹
• Allow prescribers to be able to request a waiver where circumstances beyond the prescriber’s control prevent the prescriber from being able to electronically prescribe controlled substances covered by Part D¹

Quality Payment Program (QPP) Policies

Health Equity Data Collection Request Information – CMS does not have means of collecting data regarding race and ethnicity, but contractors have developed algorithms to estimate race and ethnicity of Medicare beneficiaries².

Merit-based Incentive Payment System (MIPS) Value Pathways – Under MIPS, providers earn a payment adjustment for Part B covered professional services based on CMS’s evaluation of their performance across different performance categories^3,6.

• CMS is planning to phase out the original MIPS program by 2027 and switch to MIPS Value Pathways (MVPs) ¹
• The MVPs framework aims to align and connect measures and activities across the quality, cost, and improvement activities performance categories of MIPS for different specialties or conditions^5,6

MIPS Category Weighting – MIPS includes four performance categories: Quality, Cost, Improvement Activities, and Promoting Interoperability. Performance on these four categories (which are weighted) are compiled into an overall score that determines an upward, downward, or neutral payment adjustment that providers receive two years after the performance period¹. Below are the new weights for 2022 which are required by law¹.

• General Performance Category Weights Proposed for 2022¹:
  • Quality: 30% (down from 40% in 2021)
  • Cost: 30% (up from 20% in 2021)
  • Promoting Interoperability: 25%
  • Improvement Activities: 15%

The Performance Threshold – The performance threshold is the score that clinicians need to achieve to avoid a penalty and receive a bonus¹. Starting in 2022, CMS is required by law to set the threshold at the mean or median of prior performance¹.

• CMS is proposing to set the threshold at 75 points in 2022 (the mean score during the 2017 performance period), a significant increase from the 2021 threshold of 60 points¹.
• There is also an additional bonus for exceptional performance¹. CMS is proposing to set that exceptional bonus threshold at 89 points¹.

Other Quality Proposals

Data Completeness- CMS is proposing to maintain the current data completeness threshold (the percentage of applicable patients on which providers must report on for a particular measure) at 70% for the 2022 performance period but is proposing to increase the data completeness threshold to 80% for the 2023 performance period¹.

Why does it matter?

According to a September 15^th article from Medscape, the changes that will affect physicians the most are as follows:

1. The PFS will include a substantial pay cut which equates to 75% for emergency physicians when initial reductions and sequestrations are considered^1,8
2. Sequestration was put on hold, but it is set to return at the beginning of 2022⁸
3. Legislative decision making ultimately lies with Congress. This limits the medical community in making concrete decisions on which proposals of the PFS they agree with or oppose⁸

Additionally, a Deloitte study states that FFS payment is still the norm in the USA. With 97% of physicians still using FFS care models rather than value-based payment models, the changes listed about will still have impact on the majority of physicians⁷.

What can I do about it?

• Familiarize yourself further with CMS Fact Sheet regarding the 2022 PFS Proposals
• Follow the impending vote about CMS judgment coming in early November
• Advocate for your interests through EMRA, ACEP, or your congressional legislators

This post was a collaboration between EM Docs and the EMRA Health Policy Committee

References

1. American College of Emergency Physicians. ACEP Responds to Major Medicare Regulation Impacting Physician Payments. ACEP. https://www.acep.org/federal-advocacy/federal-advocacy-overview/regs–eggs/regs–eggs-articles/regs–eggs—september-16-2021/. Published September 15, 2021. Accessed October 7, 2021.
2. American College of Emergency Physicians. Summary of Comments – acep.org. ACEP. https://www.acep.org/globalassets/new-pdfs/advocacy/acep-response-to-cy-2022-pfs-and-qpp-proposed-rule.pdf. Published September 13, 2021. Accessed October 7, 2021.
3. Centers for Medicare and Medicaid Services. Fact Sheet Calendar Year (CY) 2022 Medicare Physician Fee Schedule Proposed Rule. CMS. https://www.cms.gov/newsroom/fact-sheets/calendar-year-cy-2022-medicare-physician-fee-schedule-proposed-rule. Published July 13, 2021. Accessed October 7, 2021.
4. Centers for Medicare and Medicaid Services. Fee Schedules – General Information. CMS. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/FeeScheduleGenInfo. Accessed October 9, 2021.
5. Centers for Medicare and Medicaid Services. MIPS Value Pathways. Quality Payment Program. https://qpp.cms.gov/mips/mips-value-pathways. Accessed October 9, 2021.
6. Centers for Medicare and Medicaid Services. Reporting Options Overview. Quality Payment Program. https://qpp.cms.gov/mips/reporting-options-overview. Accessed October 9, 2021.
7. Deloitte. Equipping Physicians for Value-Based Care. Deloitte Insights. https://www2.deloitte.com/us/en/insights/industry/health-care/physicians-guide-value-based-care-trends.html. Published October 14, 2020. Accessed October 11, 2021.
8. Medscape. Three ‘Bad News’ Payment Changes Coming Soon for Physicians. Medscape. https://www.medscape.com/viewarticle/958433#vp_1. Published September 15, 2021. Accessed October 11, 2021.
9. National Health Policy Forum. The Basics: Relative Value Units (RVUs) – nhpf.org. National Health Policy Forum. https://www.nhpf.org/library/the-basics/Basics_RVUs_01-12-15.pdf. Published January 12, 2015. Accessed October 7, 2021.