2022 Medicare Physician Fee Schedule: How Will it Affect Your Practice?

New payment policy, coding, and reimbursement changes set forth in the calendar year (CY) 2022 Medicare physician fee schedule (MPFS) final rule took effect January 1. The MPFS, which the Centers for Medicare & Medicaid Services (CMS) updates annually, lists payment rates for Medicare Part B services and introduces or modifies other regulations that affect physician reimbursement and quality measurement.

The American College of Surgeons (ACS) submitted comments September 13, 2021, in response to the CMS MPFS proposed rule issued earlier in the year.* Some provisions in the final rule, released November 2, 2021, incorporate the College’s recommendations. Although the final rule includes important payment and policy decisions that affect all physicians, this article focuses on updates that are particularly relevant to general surgery and its related specialties.

E/M services

CMS refined a number of its policies for split (or shared) evaluation and management (E/M) services, critical care services, and services that teaching physicians furnish.

Split (or shared) services

The agency finalized changes to its policies for split (or shared) E/M visits that a physician furnished in conjunction with a nonphysician practitioner (NPP) to permit the practitioner—either the physician or NPP—who provided the substantive portion of the visit to bill for the services furnished. In 2022, the practitioner who spends more than half of the total time or performs the history, exam, or medical decision-making (MDM) can be considered to have performed the “substantive portion” and can bill for the split (or shared) E/M visit. However, given recent changes in the Current Procedural Terminology (CPT) E/M guidelines, CMS redefined “substantive portion” as more than half of the total time that the physician and NPP spent performing the split (or shared) visit beginning in 2023 (see Table 1).^† The substantive portion may include time spent with or without direct patient contact.

Critical care services

After extensive ACS advocacy efforts—including meetings with agency leaders, discussions with key members of Congress, and collaboration with other surgical specialty societies—CMS rescinded a proposal that would have prohibited critical care visits from being separately reported during the same time period as a procedure with a global surgical period. Instead, the agency maintained its existing policy that allows preoperative and/or postoperative critical care to be paid in addition to a global procedure if the patient is critically ill and the critical care is unrelated to the procedure performed.

To bill for both services, the physician must document that the E/M service was provided before the critical care service at a time when the patient did not require critical care, that the service was medically necessary, and that the service was separate and distinct, with no duplicative elements from the critical care service provided later in the day. In addition, beginning this year, CMS will require reporting of a new modifier for critical care services (CPT codes 99291 and 99292) to identify that the critical care is unrelated to a global procedure. New modifier FT (Unrelated Evaluation and Management (E/M) visit during a postoperative period, or on the same day as a procedure or another E/M visits. Report when an E/M visit is furnished within the global period but is unrelated, or when one or more additional E/M visits furnished on the same day are unrelated.) should be appended to CPT codes 99291 and 99292 instead of modifiers 24 and 25 when critical care is provided within the global period.

Furthermore, if postoperative care is fully transferred from a surgeon to an intensivist, the surgeon must report modifier 54 (surgical care only) and the intensivist must report modifier 55 (postoperative care only) to indicate the transfer of care. In addition, if the intensivist accepting the transfer of postoperative care also performs unrelated critical care, the intensivist must append modifier FT to CPT codes 99291 and 99292.

Teaching physician services

CMS clarified that Medicare will not pay teaching physicians for shared services unless the physician exercises full, personal control over the portion of the case for which the physician is seeking payment. Only the teaching physician’s total time—not including the time the resident spent furnishing care without the presence of the teaching physician—may be counted when total time is used to determine the office/outpatient E/M visit level.

Clinical labor pricing update

This year, CMS will begin updating clinical labor (CL) rates, which are a component of practice expense (PE) relative value units (RVUs) that reflect wages for clinical labor staff. The agency also will complete its update to the prices of supplies and equipment, the other two components of PE RVUs, in 2022. The ACS and other stakeholders expressed concerns to CMS that updates to such payment methodologies based on new data could produce significant—and potentially inappropriate—shifts in physician reimbursement at the CPT code level. In recognition of this feedback, the agency will implement a four-year phase-in of the CL pricing update in an effort to maintain payment stability under the MPFS.

Telehealth and other services involving communications technology

CMS will allow certain services to be added to the Medicare telehealth services list during the coronavirus 2019 (COVID-19) public health emergency (PHE), and these services will remain on the list through the end of 2023 to give the agency and stakeholders more time to evaluate whether such services should be permanently payable under Medicare when furnished via telehealth after the pandemic.

In accordance with the Consolidated Appropriations Act of 2021 (CAA), CMS removed geographic restrictions and added the beneficiary’s home as a permissible originating site for telehealth services when furnished to treat mental health disorders. The agency also will allow audio-only telehealth to be used for mental health care.

Coinsurance for colorectal cancer screening services

CMS finalized implementation of a special coinsurance policy to reduce beneficiary cost-sharing for colorectal cancer screening services that are planned as screening tests but become diagnostic tests when the physician identifies the need for additional treatment (such as removal of polyps) in the same clinical encounter. The agency will gradually increase the Medicare payment percentage for such services over several years, phasing out beneficiary coinsurance requirements by 2030 (see Table 2).

AUC for advanced diagnostic imaging services

Section 218(b) of the Protecting Access to Medicare Act directed CMS to establish a program to promote the use of appropriate use criteria (AUC) for advanced diagnostic imaging services. The program began January 1, 2020, with an educational and operations testing period for the claims-based reporting of AUC consultation information. In response to the COVID-19 pandemic, CMS has delayed implementation of the AUC program claims processing edits and payment penalty phase to begin the latter on January 1, 2023, or the January 1 that follows the declared end of the PHE. Previously, the payment penalty phase of the AUC program was set to begin in 2022.

Conversion factor

The 2022 MPFS conversion factor (CF) is $34.6062, a 0.82 percent decrease from the 2021 MPFS CF of $34.8931. The 2022 CF reflects the expiration of the 3.75 percent increase for services furnished in CY 2021 as provided in the CAA, along with a statutory update factor and budget-neutral adjustment specified under section 1848 of the Social Security Act, as well as the implementation of the Protecting Medicare and American Farmers from Sequester Cuts Act, signed into law on December 10, 2021 (see Table 3).