Each year, the Medicare program updates and publishes final rules governing reimbursement for the Part B fee schedule (typically referred to as the “Physician Fee Schedule”) which becomes effective on January 1st of the following year.
The final rule for FY 2022 was published at the Federal Register on November 19, 2021 and because of previous legislation expiring, the Conversion Factor (part of a complex formula) was set to decrease by 3.73% which would then lead to declining reimbursements overall. Like previous years, Congress “acted,” and the President signed into law on December 10, 2021 the “Protecting Medicare and American Farmers Sequester Cuts Act.” In the end this has resulted in:
- Most specialties reimbursement will remain flat in 2022. Most specialties will receive increases/decreases between -1% and 1%
- Other than 5% reductions to both Interventional Radiology and Vascular Surgery.
- The following cuts associated with Sequestration will be minimized (legislation from several years ago) and will require similar legislation next year to avoid future cuts (Sequestration has had the impact of reducing the Medicare fee schedule by about 1.6%– this reduction will be reduced in 2022):
- Relief from 2% Medicare Sequester by not beginning it until April 1, 2022 and then reducing it to 1% until June 30, 2022.
- Halting Statutory PAYGO Sequester for 2022 by adding it to the 2023 scorecard. While this does not remove it completely, Congress will need to take action in late 2022 to eliminate these cuts.
Snapshot of Related Highlights
Related highlights pertaining to additional updates include:
Calculation Updates to CMS’ Formula
CMS utilizes a formula to derive the annual physician fee schedules and the relative value units for work (w), practice expense (pe) and malpractice (mp) have been updated. For this change to meet its regulatory challenge to be revenue neutral, CMS had reduced the “Conversion Factor (CF)” significantly. This reduction was offset by the President signing the “Protecting Medicare and American Farmers from Sequester Cuts Act” on December 10, 2021.
- Based on RVU changes alone, the majority of specialties are either seeing no overall change or a 1% increase or decrease. However, Interventional Radiology and Vascular Surgery are both seeing a drastic decrease this year of approximately 5%. We have included a summary by specialty later within this report.
Evaluation and Management (E/M), Critical Care and Teaching Physician Updates
In the 2022 Final Rule, CMS made several refinements to the current policies for split (or shared) E/M visits, critical care services, and services furnished by teaching physicians involving residents.
- These refinements reflect the changing dynamics of medicine with the increasing use of Non-Physician Providers (NPPs), use of Critical Care Services, and clarification of Teaching Physician Services to guard against the possibility of inappropriate coding.
CMS continues to evaluate Telehealth Services and in the 2022 Final Rule, extended through 2023 the additions to the Medicare telehealth services list added temporarily due to the Covid 19 PHE. These services were set to be removed; however, CMS wants the additional time to review data and input to decide on whether these services should be made a permanent part of the Medicare Telehealth List.
- Telehealth services have been around for several years but with the Covid pandemic driving a dramatic increase in these services, it appears that these services are here to stay. Providers had to quickly ramp up their ability to provide these services during the pandemic and with that ability now in place, it is likely patients will continue to want/need access to care remotely going forward.
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