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CMS Issues CY 2022 Physician Fee Schedule Final Rule

The Centers for Medicare & Medicaid Services (CMS) calendar year (CY) 2022 Medicare Physician Fee Schedule (PFS) final rule adjusts the conversion factor used to determine physician payment rates for specific services to $33.59 — a decrease of $1.30 from CY 2021. The PFS final rule also includes provisions important to essential hospitals related to Medicare reimbursement for telehealth services, vaccine payment rates, the Quality Payment Program (QPP), and the Medicare Shared Savings Program.

Appropriate Use Criteria

CMS finalized its proposal to delay the penalty phase of the new appropriate use criteria (AUC) to the later of Jan. 1, 2023, or Jan. 1 following the end of the COVID-19 public health emergency (PHE). Pursuant to the Protecting Access to Medicare Act, CMS previously finalized a policy requiring practitioners to consult AUC when ordering applicable imaging services, with an effective date of Jan. 1, 2021.

Last year, due to the COVID-19 PHE, CMS delayed the effective date of penalties for noncompliance to CY 2022. CMS is now further delaying the penalty phase to allow the agency and providers additional time to prepare for the AUC requirements.

Telehealth

Medicare reimburses practitioners under the PFS for a list of telehealth services updated through annual rulemaking. CMS does not permanently add any new services to the list of reimbursable telehealth services. However, CMS finalized its proposal to extend the duration for which it will reimburse for category 3 telehealth services — certain services that were added during the COVID-19 PHE and will be reimbursed temporarily by Medicare while it examines utilization data. CMS will pay for these for category 3 telehealth services until the end of CY 2023. In last year’s rule, CMS finalized a policy to pay for category 3 services until the end of the year in which the COVID-19 PHE ends.

In accordance with the Consolidated Appropriations Act of 2021, CMS implements policies to lift the geographic restrictions on telehealth services, including by allowing a beneficiary to receive a service while at home when the service is for the diagnosis, evaluation, or treatment of a mental health disorder. Typically, Medicare pays for a telehealth service only when the beneficiary is in a specified rural originating site at the time of the service.

As urged by the association, CMS is changing the frequency of the required in-person visit between each telehealth visit for a mental health disorder from six to 12 months. CMS also finalized its proposal to permit audio-only visits for mental health telehealth services furnished to beneficiaries in their home.

Payment for Vaccine Administration

In the proposed rule, CMS solicited comments on payment for the administration of the COVID-19 vaccine and other Part B vaccines. CMS finalized a payment rate of $30 per dose for administering influenza, pneumococcal, and hepatitis B virus vaccines. The agency will continue to reimburse $40 for the administration of the COVID-19 vaccines through the end of the calendar year in which the COVID-19 PHE ends, after which it will align the payment rate for the administration of COVID-19 vaccines with payment for administration of other Part B vaccines. CMS also finalized its proposal to continue paying the added $35.50 it pays for administering the COVID-19 vaccine in a beneficiary’s home through the end of the calendar year in which the PHE ends.

Additionally, in the proposed rule, CMS requested comments on payment for monoclonal antibody treatments and whether they should be reimbursed similar to other physician-administered drugs and biologicals under Medicare Part B. Through the end of the calendar year in which the PHE ends, CMS will continue to pay for monoclonal antibody treatments under the Part B vaccine benefit at $450 for administration in a health care setting and $750 for administration in the beneficiary’s home. Beginning in the year after the PHE expires, CMS will pay for monoclonal antibody treatment as biological products under the applicable payment system of the Medicare statute.

Quality Payment Program

Provisions under the QPP focus on the new Merit-based Incentive Payment System (MIPS) Value Pathways (MVPs), in addition to updates to the traditional MIPS program.

MIPS Value Pathways

The MVP framework compares the performance of similar clinicians who report on the same MVP relevant to a specialty, medical condition, or episode of care. CMS finalized its proposal to begin transitioning to MVPs in the 2023 MIPS performance year, with a goal of sunsetting traditional MIPS after the end of the 2027 performance and data submission periods.

CMS finalized seven MVPs available beginning the 2023 performance period in seven topic areas:

  • rheumatology;
  • stroke care and prevention;
  • heart disease;
  • chronic disease management;
  • emergency medicine;
  • lower extremity joint repair; and
  • anesthesia.

MVP scoring policies will align with those in traditional MIPS across all performance categories, with few exceptions.

Traditional MIPS Program

The final rule includes updates across the four MIPS performance categories: quality, cost, improvement activities, and promoting interoperability. Notably, additions to the improvement activities inventory include new activities related to promoting health equity. CMS also revised the definition of a MIPS-eligible clinician to include clinical social workers and certified nurse midwives.

For MIPS-eligible clinicians, CMS finalized a performance threshold set at 75 points (an increase of 15 points from the previous year). The agency also updated the formula for the complex patient bonus to standardize the two risk indicators used (medical complexity and social complexity) so that the policy can target clinicians who have a higher share of complex patients. The cap for the complex patient bonus will remain at 10 points.

Due to the COVID-19 pandemic, CMS was unable to reliably calculate cost measure scores for the 2020 MIPS performance year, so the agency assigned a weight of zero percent to the cost performance category.

CMS did not finalize its proposal to use a different baseline period, such as CY 2019, for scoring quality measures in the 2022 performance period. The agency believes it can create reliable historical benchmarks using 2020 performance period data.

Medicare Shared Savings Program

In the CY 2021 PFS final rule, CMS finalized a requirement that accountable care organizations (ACOs) report quality data via a new Alternative Payment Model (APM) Performance Pathway (APP) that requires submission of all-payer quality data. In response to continued concerns about the transition to reporting quality measures under the APP, CMS finalized a longer transition to this new reporting mechanism by extending the CMS Web Interface as a reporting option for three years through performance year 2024.

CMS is also delaying for an additional year the increase in the quality performance standard ACOs must meet in order to share in savings. The agency is maintaining the 30th percentile quality performance threshold for 2023 performance year.

Electronic Prescribing of Controlled Substances

CMS finalized its proposal to delay implementation of the electronic prescribing of certain controlled substances covered under Medicare Part D by one year to Jan. 1, 2023, and to Jan. 1, 2025, for beneficiaries in long-term care facilities. Additionally, CMS finalized certain exceptions to the e-prescribing requirements, including:

  • when the prescriber and dispensing pharmacy are the same entity;
  • for prescribers who issue 100 or fewer controlled substance prescriptions for Part D drugs in a calendar year;
  • for prescribers who are in the geographic area of a natural disaster as declared by a federal, state, or local government; or
  • when a prescriber is granted a waiver based on extraordinary circumstances, such as cybersecurity attacks, technological failures, or other emergencies.

Closing the Health Equity Gap

In the proposed rule, CMS sought information from stakeholders about ways to address health equity through improved data collection to better measure and analyze disparities across its programs. Specifically, the potential stratification of quality measure results by race and ethnicity and improving demographic data collection. CMS will consider feedback it received to inform future rulemaking.

America’s Essential Hospitals is analyzing the final rule and will send members a detailed Action Update in the coming days.

Contact Senior Director of Policy Erin O’Malley at eomalley@essentialhospitals.org or 202.585.0127 with questions.

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About the Author

Maryellen Guinan is a principal policy analyst at America's Essential Hospitals.

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