Medicare Payment and Reimbursement

Medicare’s 2022 payment rule for physician services adds to a significant impending cut

November 7, 2021 8:56 pm
  • Medicare payments to physicians will decrease by almost 10% in 2022 in the absence of congressional action.
  • The 2022 rule for physician payments provides a transition period to mitigate the impact of scheduled changes to clinical labor rates.
  • The rule also ensures a wide range of telehealth services will be covered through 2023, makes various updates to E/M billing policies and establishes vaccine payment rates.

CMS used the 2022 final rule for Medicare physician payments to offer accommodations on policies related to telehealth and more, but concerns loom about a large cut that’s in the offing.

The physician fee schedule (PFS) conversion factor will be $33.59, a decrease of $1.30 from 2021. The decrease reflects the expiration of a temporary 3.75% increase and an adjustment to ensure changes to relative value units are budget neutral.

Combined with the scheduled restoration of the 2% Medicare payment sequester and implementation of a 4% cut as a statutory pay-for in the March 2021 COVID-19 legislation, physicians are looking at a 9.75% payment reduction unless Congress acts before the end of the year.

“Now that the decrease in the conversion factor is official, AMGA members need Congress to recognize the gravity of the situation,” Jerry Penso, MD, MBA, president and CEO of the American Medical Group Association, said in a written statement. “The decrease in the Medicare conversion factor, along with the looming sequester and PAYGO cuts, will undermine the ability of AMGA members to care for their patients.”

Clinical labor rates

A scheduled update to clinical labor rates will be implemented over a four-year period, culminating with the new rates taking full effect in 2025, according to a provision in the final rule. That’s a change from the proposed rule, which indicated the full change would be in 2022.

The transition window is meant to serve as an adjustment period for specialties that will be adversely affected by the change. While many specialties will see an increase in payment based on the higher rates for labor, others are in for a reduction.

Services in areas such as radiation oncology (-3%), vascular surgery (-5%) and interventional radiology (-6%) are projected to generate lower payment when the update is complete because of their high equipment and supply costs. Due to budget neutrality provisions, an increase in labor rates must be offset by decreases in payment for supplies and equipment.


A number of telehealth services will continue to be covered by Medicare through 2023 as CMS evaluates whether they should be covered permanently. The services were scheduled to lose eligibility for coverage at the conclusion of the public health emergency. New telehealth codes for cardiac rehabilitation and intensive cardiac rehabilitation also are available (the full list of services can be downloaded).

For services that remain eligible for coverage, an in-person visit must take place at least once per year, with exceptions permissible based on a beneficiary’s circumstances. That’s a change from the 2022 proposed rule, which set a six-month interval for in-person visits.

Audio-only visits can be covered for mental health services in circumstances when the provider has video capability but the beneficiary can’t — or prefers not to — connect by video. A new billing modifier will be used for such claims. The rule also states that mental health services can include treatment of substance-use disorders.

New coding and payment will be made permanently available to cover lengthier virtual check-in services that can be used to assess whether an in-person visit is needed. The relevant code is HCPCS code G2252, with a crosswalk to CPT code 99942. Those codes describe “11–20 minutes of medical discussion when the practitioner may not necessarily be able to visualize the patient, and [are] used when the acuity of the patient’s problem is not necessarily likely to warrant a visit, but when the needs of the particular patient require more assessment time from the practitioner,” CMS states in the rule.

Evaluation and management visits

The new rule establishes a definition for split E/M visits as visits provided in the facility setting by a physician and nonphysician practitioner in the same group. The visit should be billed by the clinician who provides “the substantive portion of the visit.”

Starting in 2023, substantive portion will be defined as more than half of the total time spent for the visit. For 2022, it also can refer to the following activities:

  • History
  • Physical exam
  • Medical decision-making (except for critical care)

A modifier for split visits is required on the claim “to inform policy and help ensure program integrity,” CMS states. Documentation in the medical record must identify the two clinicians who provided services and be signed and dated by the clinician who provided the substantive portion.

The rule also sets new policies for billing of critical care visits, including that such services “may be paid on the same day as other E/M visits by the same practitioner or another practitioner in the same group of the same specialty, if the practitioner documents that the E/M visit was provided prior to the critical care service at a time when the patient did not require critical care, the visit was medically necessary and the services are separate and distinct, with no duplicative elements from the critical care service provided later in the day.” Modifier -25 should be used on the claim when clincians report such services.

The rule also attempts to clarify the circumstances in which teaching activities factor into the time criteria that can be used to select the office/outpatient E/M visit level: “Only time spent by the teaching physician performing qualifying activities listed by CPT (with or without direct patient contact on the date of the encounter), including the time the teaching physician is present when the resident is performing such activities, may be counted for purposes of visit level selection.”

Excluded under that definition is “teaching time that is general and not limited to discussion that is required for the management of a specific patient.”

Vaccine administration

Payment in 2022 will be $30 for influenza, pneumococcal and hepatitis B vaccines and will remain $40 for the COVID-19 vaccine, with the latter rate in effect through the end of the year in which the public health emergency ends. Payment will be $75.50 if administration of the COVID-19 vaccine takes place in a beneficiary’s home.

Payment for administering monoclonal antibodies will remain $450 in a healthcare setting and $750 in a beneficiary’s home.


googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text1' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text2' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text3' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text4' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text5' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text6' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-text7' ); } );
googletag.cmd.push( function () { googletag.display( 'hfma-gpt-leaderboard' ); } );